Highlighting Krakatau Steel, Erick Thohir Reminds SOEs Not From Business Expansion

SOE Minister Erick Thohir/PHOTO VIA ANTARA

PALEMBANG - Minister of State-Owned Enterprises Erick Thohir reminded SOEs not to just make a business expansion plan, because if it stalls, it will not hesitate to investigate.

Erick Thohir said he appreciated the desire of SOEs to develop their business, but the plan had to be accepted in terms of business.

“How was the project plan drawn up? Why can it stall? Is it because there is only the director's desire, which is important for them to have a project? This must be observed," said Erick Thohir, quoted by Antara, Sunday, October 24.

He looked at the case at PT Krakatau Steel, which has invested up to 850 million dollars (Rp 12 trillion) for the construction of a blast furnace factory.

The construction of the project, which required a large investment cost, was stalled for four years and burdened the company with mounting debt.

Erick Thohir has ordered an investigation due to allegations of corruption.

For this incident, Erick reminded SOEs to support the business transformation process carried out by the Ministry of SOEs by setting five foundations as a reference.

The five foundations are improving corporate and public services, focusing on core business, digitalization-based innovation, good business processes and starting with the transformation of human resources.

This application must also adhere to the core values that have been jointly determined since July 1, 2020, namely AKHLAK, an acronym for Amanah, Competent, Harmonious, Loyal, Adaptive, and Collaborative.

If this basic value is applied, SOEs will contribute a lot to the state. In domestic business, SOEs do not take advantage of the private sector but are market balancers.

“This is difficult if you are not loyal, later you will think that this is a state company. If you lose, the state will help. If this is maintained, SOEs will not meet expectations even though their assets are very large," said Erick.

So far, thanks to the efforts made by the Ministry of SOEs in the last two years, SOEs have been able to contribute to the country worth IDR 377 trillion through taxes, dividends and profit sharing.

Another positive achievement can be seen from the increase in profit of up to 365 percent or in the first semester of 2020 it only reached Rp 6 trillion, while in the same period in 2021 it was able to earn Rp 26 trillion.