23 Mei 2008
Krakatau Steel not for foreigners Juwono

State steel company PT Krakatau Steel should be privatized through an initial public offering (IPO) rather than by being sold to a foreign-owned company,

Defense Minister Juwono Sudarsono said Thursday.After meeting with President Susilo Bambang Yudhoyono at the presidential office, Juwono said the countrys largest steel producer should remain under Indonesian control because of its strategic role in supporting the national defense industry.

"Ive met with Krakataus directors, and we agreed the company should be privatized through an DPO," he said.

Juwono said foreign acquisi- tion of Krakatau Steel could result in the massive layoffs of existing employees. "Its good the company will have increased profits, but 700 to 1,000 people could lose their jobs."

The worlds largest steel-maker ArcelorMittal is among the foreign-owned companies that have expressed interest in acquiring Krakatau Steel, whose annual capacity stands at 2.5 million tons.

Juwono said the case for an IPO was supported by Krakataus improved financial and managerial performance during the past 18 months.

The company is on course to increase its total production to 5 million tons per year.

The debate about Krakataus future stems from bids by Indian companies ArcelorMittal, Tata Steel and Essar and Australian company BlueScope Steel to acquire up to 49 percent of the national steel company.

Top officials at the Defense Ministry, the State Ministrj for State Enterprises, the Finance Ministry and the Industry Ministry have yet to meet to decide how Krakatau will be privatized. - JP

Source : The Jakarta Post, Page : 9

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