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Minister's restructuring plan aims to make SOEs profitable, competitive
The businessman-turned-bureaucrat is planning sweeping reforms that aim to turn SOEs into profitable companies that can compete in the global market.
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State-Owned Enterprises (SOEs) Minister Erick Thohir (left, first row facing camera) attends a hearing on Monday with House of Representatives Commission VI in Jakarta. Accompanying the minister are SOEs Deputy Minister Kartika “Tiko” Wirjoatmodjo (center, first row) and ministerial spokesman Arya Sinulingga. (Antara/Galih Pradipta)
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tate-Owned Enterprises (SOEs) Minister Erick Thohir announced his plans to overhaul the country’s SOEs at a House of Representatives hearing on Monday that included several new initiatives but excluded his predecessor’s plan to establish a “super" SOEs holding company.
At the hearing with House Commission VI overseeing SOEs, trade, investment, industry, cooperatives and small-and-medium enterprises (SMEs), Erick said that he was dropping former minister Rini Soemarno’s plan to create a super SOEs holding company and instead establish subholding companies that would oversee SOEs in the same business sector.
The minister said that he would also continue debt restructuring as part of his SOEs reform plans, including restructuring the debts of PT Krakatau Steel. He also planned to improve the role of SOEs in contributing to the nation's food, energy and health security through cooperation with global companies.
“This will enable our SOEs to go global, have bigger markets and be more competitive [alongside] foreign companies,” he said.
Among his new SOEs reform initiatives were to issue stricter requirements for setting up subsidiaries.
“I will not prevent SOEs from creating new subsidiaries, but they must present a clear purpose as to why they [want to] create them,” said Erick, underlining that stricter requirements were needed to ensure that SOEs focused on their core businesses and did not venture outside their domain.
He cited PT Pengembangan Armada Niaga Nasional (PANN) as an example, pointing out that the state-owned ship leasing company owned a subsidiary that managed two hotels.
