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Erick will consolidate state-owned enterprises into 30 entities in 11 clusters – Companies
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Erick will consolidate state-owned enterprises into 30 entities in 11 clusters – Companies

State-Owned Enterprises (SOE) Minister Erick Thohir announced on Monday a plan to reduce the number of state-owned enterprises from the current 47 to just 30 companies, organized into 11 clusters.

“The large number of state-owned enterprises does not reflect the health of business. In fact, it can even hinder the synergy between regional entrepreneurs and the private sector,” Erick said in a meeting with the House of Representatives on Monday, quoted by Detik.com.

“We still need to figure out how to synchronize this open market and define the role that state-owned enterprises will play,” he added, noting that strengthening state-owned enterprises by sector would help improve efficiency to achieve self-sufficiency.

The Minister also provided a brief overview of the restructuring process. The country initially had 114 SOEs grouped into 24 clusters, which were reduced to 47 companies in 12 clusters by 2024. The new plan would further reduce this figure by consolidating to just 30 SOEs in 11 clusters.

Several significant mergers are in the works to achieve this goal, including the planned merger of the two energy giants, oil and gas holding PT Pertamina and state electricity company PLN.

In the food sector, state plantation company PT Perkebunan Nusantara, fertilizer producer PT Pupuk Indonesia and logistics firm Perum Bulog are set to merge. Meanwhile, state pharmaceutical company PT Bio Farma is slated to play a central role in developing a more integrated public health system.

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“We are exploring the possibility of moving the merged hospitals under the umbrella of Bio Farma. This will create a comprehensive healthcare system that connects pharmacies, manufacturing and hospitals, ensuring that all our hospitals use domestic drugs instead of relying on imports,” said Erick.

Currently, Pertamina’s hospital management subsidiary, PT Pertamina Bina Medika, acts as a holding company for hospitals that were previously subsidiaries of other state-owned enterprises.

The minerals and coal sector is to be consolidated under the state holding company Mining Industry Indonesia (MIND ID).

Erick said the PSI Ministry will meet Public Works Minister Dody Hanggodo on Wednesday to discuss the planned consolidation in the construction and real estate development sector.

“One of the issues is getting approval for state-owned enterprises (in that sector) to go from seven to three construction firms, so that we can do restructuring, rehabilitation, but also build expertise in each state-owned enterprise,” he said Erick Luni, quoted by Bisnis.com.

After the consolidation, construction firms PT Adhi Karya, PT Hutama Karya and PT Pembangunan Perumahan (PP) and property developer PT Perumnas will remain as surviving entities, with PT Brantas Abipraya and PT Nindya Karya under Adhi Karya, PT Wijaya Karya under PP. and PT Waskita Karya are part of Hutama Karya.

In the financial sector, the four major banks Bank Mandiri, BRI, BNI and BTN are to continue to operate as part of a single cluster, while Indonesia Financial Group (IFG) will manage the insurance and pension fund sectors.

State holding company Defense Industry Indonesia (Defend ID) will lead the defense sector, while PT Aviasi Pariwisata Indonesia (InJourney) will oversee an optimized tourism ecosystem that includes flag carrier Garuda Indonesia and Pertamina Group’s Pelita Air.

The logistics cluster comprises rail operator PT Kereta Api Indonesia, postal company Pos Indonesia and port operator PT Pelabuhan Indonesia (Pelindo), with a plan to merge shipping company PT Pelni and ferry operator PT ASDP Indonesia Ferry to strengthen maritime logistics .

PT Telkom will lead the telecommunications sector, while the technology sector is consolidated under the banknote printing company Perum Peruri.

Technicians prepare a Garuda Indonesia Boeing 737-800 aircraft at Soekarno-Hatta International Airport on October 27, 2023, for a test flight using sustainable aviation fuel.