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Tate-Owned Enterprises (SOEs) Minister Erick Thohir on Monday announced a plan to reduce the number of state-owned enterprises from 47 currently to just 30 companies, organized into 11 clusters.
“The large number of state-owned enterprises does not reflect the health of the business community. In fact, it may even hinder synergy between regional entrepreneurs and the private sector,” Erick said Monday during a meeting with the House of Representatives, as 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, emphasizing that consolidating state-owned enterprises by sector would help improve efficiency toward achieving self-sufficiency.
The minister also provided a brief overview of the restructuring process. The country initially had 114 state-owned enterprises, grouped into 24 clusters, but by 2024 this had been reduced to 47 companies in 12 clusters. The new plan would further reduce this number through consolidation to just 30 state-owned enterprises in 11 clusters.
Several major mergers are in the works to achieve this goal, including the planned merger of the two energy giants, the oil and gas holding company PT Pertamina and the state-owned electricity company PLN.
In the food sector, state-owned plantation company PT Perkebunan Nusantara, fertilizer producer PT Pupuk Indonesia and logistics company Perum Bulog are about to merge. Meanwhile, state-owned pharmaceutical company PT Bio Farma will play a central role in developing a more integrated public health system.
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“We are exploring the possibility of bringing merged hospitals under the Bio Farma umbrella. This will create a comprehensive healthcare system that connects pharmacies, manufacturing and hospitals so that all our hospitals use domestic medicines instead of depending 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 companies.
The mineral and coal sector will be consolidated under the state-owned Mining Industry Indonesia (MIND ID).
Erick said the Ministry of State Enterprises would meet with Public Works Minister Dody Hanggodo on Wednesday to discuss the planned consolidation in the construction and real estate sectors.
“One of the issues is getting approval that state-owned enterprises (in that sector) will go from seven to three construction companies so that we can carry out restructuring and rehabilitation, but also build expertise in each state-owned enterprise,” Erick said on Monday, as quoted by Bisnis.com.
After the consolidation, construction companies PT Adhi Karya, PT Hutama Karya and PT Pembangunan Perumahan (PP) and real estate developer PT Perumnas would remain the remaining entities, with PT Brantas Abipraya and PT Nindya Karya under Adhi Karya, PT Wijaya Karya under PP and PT Waskita Karya part by Hutama Karya.
In the financial sector, the four major banks Bank Mandiri, BRI, BNI and BTN will continue to operate as part of one cluster, while the Indonesia Financial Group (IFG) will manage the insurance and pension fund sector.
State holding company Defense Industry Indonesia (Defend ID) is to lead the defense sector, while PT Aviasi Pariwisata Indonesia (InJourney) is to oversee a streamlined tourism ecosystem that includes national carrier Garuda Indonesia and Pertamina Group’s Pelita Air.
The logistics cluster consists of railway company PT Kereta Api Indonesia, postal company Pos Indonesia and port operator PT Pelabuhan Indonesia (Pelindo), with the plan to merge shipping company PT Pelni and ferry company PT ASDP Indonesia Ferry to strengthen maritime logistics.
PT Telkom will lead the telecommunications sector, while the technology sector will be consolidated under 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.