Indonesia Pushes State-Owned Industry Consolidation and IPO Plans
The ministry is also planning rights issues for some other SOEs this year — including publicly-listed lenders Bank Negara Indonesia and Bank Tabungan Negara — to increase their working capital.
Toto Pranoto, associate partner at the University of Indonesia’s BUMN Research Group, which focuses on studies of SOEs, said improving market conditions and growing demand for renewable energy mean that this year would be good timing for Pertamina Geothermal’s IPO.
Regarding consolidation, he said that while on paper it would be good to improve synergies, reduce overlap and support value creation among SOEs operating in the same sectors, the problem could lie in “execution … of post-merger integration,” citing improving results of companies under mining holding company Mind ID but lackluster performance of plantation holding Perkebunan Nusantara III.
On the new food holding specifically, Pranoto said the government should not stop at consolidation alone, citing the state food companies’ aging production and storage facilities requiring the government’s “commitment to capital injections.”
