Estananto (Researcher at
PIKIR Institute, Jakarta. This is my personal view)
The State Minister for
SOE Dahlan Iskan in many occasions has announced that Plantation Holding will be
conducted in this year. The PTPN III has been appointed as holding company.
Megananda, former Deputy of SOE Ministry for Primary Industry Business, has
been appointed as President Director of PTPN III. The asset of newly founded
holding company is approximately IDR 50 trillion; its book total revenue is
prognosed to be IDR 45 trillion. It is seeking for bank loan and equity at
least IDR 5 trillion in the first year for expansion within the holding (Bisnis
Indonesia, March 2, 2012). It is poised to be a tough competitor for big
regional plantations like Singapore’s Wilmar or Malaysia’s Sime Darby (Kontan
Online, February 6, 2012).
The holding company of
plantation was actually expected to be formed before the end of 2007. The
plantation holding company would aim at value creation by improving capital
structure and enhancing financial capacity through the synergy effect of a
holding company. One issue was the lack of legal basis for the holding company
(Wicaksono, 2008). There were heavy critics on this plan, for example economist
Faisal Basri who argued that the plantation holding company would not be
effective in improving PTPN’s competitiveness because the plantations are
scattered across the archipelago (Basri, 2007).
SOE Holding Experiences
It seems that the
appointment of PTPN III as operating holding company is following model of
previous SOE’s holdingization process already took place since 1990s. It was a
very long story involving many stakeholders. Cement producer holding model by
placing Semen Gresik as holding company and fertilizer producer holding model
with Pupuk Indonesia as holding company are good examples of this.
Irnanda Laksanawan, a
deputy at Ministry of SOE said that the holding process is already ongoing. The
first phase is that Semen Gresik is the Operating Holding and Semen Padang and
Semen Tonasa are units under the holding. Now they run marketing activities
together. The second phase is a Functional Holding, where marketing, procurement,
and project activities of the companies are under one roof. The third phase is
that the three companies are placed under a new holding company named Semen
Indonesia (Fajar Online, October 5, 2011). The last issue concerning Semen
Gresik holding plan was the local government of Padang wanted to be a
shareholder of Semen Padang whose shares are owned 99.9% by PT. Semen Gresik,
Tbk. The holding company said it is no problem as long as the intention is
approved by its shareholders (Bisnis Indonesia, January 20, 2012). The holding
currently occupies 43% Indonesian cement market.
The holding process of Pupuk Sriwidjaja
(now Pupuk Indonesia) was also not without question; the South Sumatra
provincial parliament had even asked the government to “delay” the holding
process. They discussed local shares problem of the provincial government in
Pusri. Some Pusri’s retirees even rejected the plan because by rooting out the
holding, it will be taxed in Jakarta instead in Palembang (Republika Online,
October 28, 2008).
Challenges and Prospects
of Plantation Holding
The state-owned
plantations roots could be traced back to 1958, when nationalization of Dutch
plantations took place. Through some long reorganization processes they were
becoming 14 state plantations in 1996. The potential is high. The total landbank
size is very big, approximately one million hectares, the plantations have good
know how and human resources, the future prospect is very good, and the
domestic and international market is still developing. Study shows that the
best holding form in this case would be Investment Holding, not Operational
Holding, with one addition that marketing and procurement activities would also
be performed by the holding company (Muluk et. al., 2007).
Goold (1995) warned
that any misinterpretation on how synergy between units under parent should be
done can backfire. Linkage influence is about creating value by
fostering cooperation and synergy between the parent’s business units. For
instance, a global consulting company can endorse a sharing back-office system
such as client billing and data processing for its newly acquired consulting
services, or a sharing brand name, or even client managers for a whole client
activities in the group. However, the intention to make a synergy might result
anergy, a term coined by Guy Jillings, Head of Strategic Planning of Shell
International Petroleum. Anergy emerges when sharing effort backfires because,
for instance, the sharing billing system becomes complicated because the needs
of each business units are different. Such thing may force the managers to
prefer to do business with outsiders rather than insiders to avoid parental
intervention.
In term of the ongoing
plantation holding, it is very important to learn extensively from Semen Gresik
and Pupuk Indonesia’s experiences. Given the fact that the plantation locations
scatter across archipelago and even each plantation has its own regional characteristics,
there should be careful holding process in order not to even overcomplicate the
linkage between units or overburden the budget. In era of regional autonomy in
Indonesia, some local aspects should be also adhered; it is not only about
Corporate Social Responsibility (CSR), but also about how to maintain the
holding’s business sustainable. Sometimes numbers are not enough, but whatever
underlying those numbers are the most important.
