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Home > India > Business > PTI > Report

ArcelorMittal's Indonesian deal draws flak

April 21, 2008 18:23 IST

Indonesia's state-run enterprise BUMN Watch has opposed its government's plan to sell the country's steel giant P T Krakatau to ArcelorMittal saying the world's biggest steelmaker's record in running a plant in Surabaya province 'is not quite good'.

"If the government was to privatise P T Krakatau, it should opt for an Initial Public Offering to prevent foreign control of the company's shares and avoid internal conflicts in the company," the state-run Antara news agency quoted BUMN Watch chief Naldy Nazar Haroen as saying.

Naldy said foreign control of strategic state enterprises shares would not only harm the interests of the state and nation but also cause conflicts within the companies in question.

"The track record of Lakshmi Mittal (owner of ArcelorMittal) in Surabaya is not quite good. During 30 years of its presence in Surabaya, it has made no significant progress. In fact its nail factory in Surabaya has even collapsed," it quoted Haroen as saying.

Earlier, state enterprises minister Sofyan Djalil said privatisation of P T Krakatau would help the company improve its performance.

The steel company's Chief Commissioner Taufiequrachman Ruki feared that if the privatisation plan was realised, P T Krakatau "would turn into an Indian company", Antara said.

Mittal had said during a recent meeting with Indonesian President Susilo Bambang Yudhoyono that he was eager to cooperate with P T Aneka Tambang and Krakatau Steel in increasing production capacity of his steel company P T Ispat Indo in East Java, the news agency added.

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