Budi Sadikin tipped to lead the holding company for mining

JAKARTA (TheInsiderStories) – Ministry of State Owned Enterprise (SOEs) officially appointed Budi Gunadi Sadikin as Chief Executive Officer aluminium producer company PT Indonesia Asahan Aluminium (Inalum). The inauguration took place in Ministry SOE office on Thursday (14/9).

This means, the former CEO of PT Bank Mandiri Tbk, (IDX: BMRI) lead the parent company for mining sector holding which is currently in the process of finalization. Sadikin is charged with establishing a holding company made out of state-owned mining enterprises to re-do the way the government handles its future stakes in the industry.

He started his banking career when he joined PT Bank Bali as General Manager (GM) Electronic Banking. Furthermore, Sadikin’s career continued to climb by becoming Chief GM Jakarta Region and Chief GM Human Resources until the end of 1999.

He contined a new career in foreign banking by joining PT ABN Amro Bank Indonesia until the end of 2004. After that, he continued his career at PT Bank Danamon Indonesia Tbk as EVP Head of Consumer Banking and Director of Adira Quantum Multi Finance.

He graduated from Civil Engineering of Institut Teknologi Bandung 1980 and took his economics education at Washington University United States. Sadikin is quite famous among state-owned enterprises. After releasing his position as president of Mandiri,  he was rumored to be president of state oil and gas company PT Pertamina.

He was eventually appointed a special staff  of SOEs Minister Rini Soemarno and started his new role in late June 2016, and among other things he is charged with looking at how the government will handle the acquisition of mining assets in the future.

The ministry has decided that Inalum will be the parent company and will have a 60 percent share of coal miner PT Bukit Asam Tbk (IDX: PTBA), tin miner PT Tambang Timah Tbk (IDX: TINS) and gold miner PT Aneka Tambang Tbk (IDX: ANTM). Inalum will also hold the part of 51 percent of the government’s shares in copper and gold producer PT Freeport Indonesia.

Recently, President Joko Widodo has approved the proposal of SOEs Ministry to form six holding companies of mining, oil and gas (oil and gas), housing, toll roads, financial services, and food.

PT Pertamina will serve as holding company or holding company in oil and gas sector. PT Perusahaan Gas Negara Tbk (IDX: PGAS). will become his subsidiary Pertamina’s subsidiary and PT Pertamina Gas will become a subsidiary of PGAS).

In the mining sector, Inalum will be holding of mining. Bulog will be the parent of several state-owned food sectors, such as PT Sang Hyang Seri, PT Pertani, and PT Perdangan Indonesia. Meanwhile PT Danareksa will become the holding of state-owned financial services, including banking.

Housing provider, PT Perum Perumnas becomes the parent company of state-owned housing companies such as PT PP Tbk (IDX: PTPP). and PT Adhi Karya Tbk. For toll road construction sector, toll road operator PT Hutama Karya will be appointed as its holding.

Soemarno targets there are some holding that can be formed this year. Most likely the previously formed holding is oil and gas and mining. The companies that will enter the holding are intensive enough to coordinate.

One of the rules touched upon is Government Regulation Number 44 Year 2005 concerning Procedures of Inclusion and Administration of State Capital in State-Owned Enterprises and Limited Liability Company. There needs to be a revision of the government regulation by entering a holding scheme.

Writing by Elisa Valenta, Email: elisa.valenta@theinsiderstories.com