Indonesia Pushes State-Owned Industry Consolidation and IPO Plans
BUMNINC.COM I From food and tourism to crude oil and geothermal energy, Indonesia’s Ministry of State Owned-Enterprises is pushing consolidation and initial public offering plans this year, highlighting national priorities in driving post-pandemic recovery in Southeast Asia’s largest economy.
The government last week launched two new state holding entities, InJourney and ID Food. The former now oversees state-owned enterprises in tourism-related businesses including airport operators Angkasa Pura I and II, as well as a network of 120 hotels nationwide. The latter includes several companies in the food sector.
InJourney was initially planned to include flag carrier Garuda Indonesia as well, but that has reportedly been put on hold due to the airline’s financial troubles.
“This restructuring … is a must because there are many SOEs with their subsidiaries and sub-subsidiaries running tourism [businesses], but they have been walking on their own, unconsolidated and therefore weak,” President Joko Widodo said at InJourney’s launch. “With consolidation through the holding [entity], they can emerge as a big power. The holding must make its SOE members more agile and professional.”
Widodo added that the international motorbike circuit MotoGP race, as well as the Group of 20 Summit and related meetings that Indonesia is hosting this year, are “a golden moment” that tourism-related SOEs must take advantage of to accelerate consolidation.