GOVT STILL STUDYING TO MERGE SEMEN KUPANG WITH SEMEN GRESIK

Gresik, Feb 16 (ANTARA) - The state enterprises ministry is still studying the merging of PT Semen Kupang with PT Semen Gresik to save the company, Mustafa Abubakar said.

"The merger plan still has to be studied again as there are still problems to be solved," the state enterprises minister said here on Tuesday after visiting PT Semen Gresik.

He said it was still too early to merge the two state-owned companies as PT Perusahaan Pengelola Aset (PPA) is still restructuring PT Semen Kupang.

The PPA earlier suggested four options for PT Semen Kupang namely liquidation, restructuring, operational cooperation with investors and corporate action.

"We cannot as yet decide the result of the study on saving the assets of PT Semen Kupang, whether it will be a capital injection, a merger or an acquisition," he said.

Although the annual results of evaluation on PT Semen Gresik's performance showed quite a significant increase, this would not make a merger automatically a solution for saving PT Semen Kupang.

Abubakar said what was urgent now was increasing the production capacity of PT Semen Gresik to meet domestic demands which are predicted to continue to increase until 2014.

PT Semen Gresik can still meet the national demand until 2014 with its production capacity of 47 million tons and growth in demand of 38 to 39 percent a year, in addition to around 10 million tons of additional production a year and an annual cement consumption growth of around six to seven percent, he said.

PT Semen Gresik's president director Dwi Soetjipto said the company would not only see assets but also liquidity and debts that should be restructured.

He said unless PT Semen Kupang would not restructure its debts PT Semen Gresik would not get a benefit by merging with the company. "It would even be better for us to build a new plant (rather than merging with it)," he said.