Indonesia Sets State Holding Company Managing 14 Plantation Firms With $5.19n in Assets

Sep 24, 2014

The Jakarta Globe. Jakarta. State-owned plantation company Perkebunan Nusantara III, known as PTPN III, is set to become the holding company of 14 state-plantation companies, pulling together a total of Rp 65.22 trillion ($5.2 billion) worth of assets from these companies, a government official said on Tuesday.

Muhammad Zamkhani, the Ministry of State Enterprises deputy in charge of agricultural and strategic industry said the appointment of PTPN III as the holding company that supervises 13 other fellow companies has been legalized by a government regulation.

The government will transfer the control of its stakes in 13 state plantation companies into PTPN III, he said. The 14 state-plantation companies run various agri-businesses, including palm oil and rubber, Indonesia’s main exporting commodities. They operate in different parts of Indonesia.

For long, PTPN III had been dubbed to lead the other fellow state-plantation companies as it was considered the most performing among the others.

Zamkhani said the government has yet decided a new name for PTPN III. On Tuesday, directors from the 14 state-plantation companies were called to Jakarta to discuss about the holding company’s establishment.

“All the related executives and government officials met today [on Tuesday]. From PTPN directors, officials from the State-Enterprise Ministry and the finance ministry,” he said.

State Owned Enterprise Minister Dahlan Iskan said he was relieved the holding company is finally established. He recalled the lengthy process to establish such holding. Dahlan is the last SOE Minister to finish the relay race under President Susilo Bambang Yudhoyono’s administration. Previous minister Sofyan Djalil did not complete the homework on the matter.

“Thanks god it finally comes into realization,” he said, adding the holding company can leverage the assets of its subsidiaries, deal better with buyers and compete better with the private sector players.

The plan to established a plantation holding company in Indonesia had been touted before Yudhoyono started his second term in 2009.

Political interests within the government and competitions among the state-plantation companies, though, have prevented the plan from happening. These state-plantation companies compete with the private sector players, including the big crude palm oil producers like Astra Agro Lestari, Sinar Mas Agro Resources and Technology and many more.

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