Govt should reconsider plan to sell Krakatau shares to foreign firm

"We must be wary of the relevant partner`s wish (to buy Krakatau shares) because its track record is not so good. It has laid off many of its workers," he said at the Presidential Palace here on Thursday.

Juwono said the government had better support any proposal for the privatization of the company through an initial public offering (IPO).

Earlier, Juwono met with PT Krakatau Steel President Director Fazwar Bujang and Chief Commissioner Zaky Anwar Makararim at his office. The three agreed to ask the government to reconsider the plan.

Fazwar said the company was ready to float 20 percent of its shares to the public if the government agreed to the IPO.

He said PT Krakatau Steel was a sound state firm so that the government did not need to sell it to a foreign investor under a strategic partnership scheme.

Last year, the company posted a net profit of around Rp370 billion. In the first quarter of 2008 alone, the figure already reached Rp400 billion, he said.

"The figure suggests that this year PT Krakatau Steel will be able to book a net profit of around Rp1 trillion, which is higher than our projected Rp800 billion," he said.

The company currently produced 2.5 million tons of steel per annum. Nearly 20 percent of it was exported and the rest sold at home, he said.

Earlier, ...