Executive Summary

Key insights and market outlook

Danantara plans to consolidate state-owned enterprises (SOEs), reducing the current 1,067 entities to around 250. The move aims to address the 52% of SOEs operating at a loss and improve overall profitability. The consolidation will involve restructuring subsidiaries and streamlining management, including directors and commissioners, without layoffs.

Full Analysis

02

Deep Dive Analysis

Danantara to Undergo Major SOE Consolidation

Restructuring Plan Aims to Improve Profitability

Danantara, Indonesia's state-owned enterprise management body, is set to undertake a significant restructuring of the country's SOE landscape. The plan involves reducing the current 1,067 SOEs and their subsidiaries to approximately 250 entities ¹

². This consolidation aims to address the pressing issue of over half (52%) of these entities operating at a financial loss ¹.

Key Objectives and Implementation

The restructuring will focus on creating a more efficient and profitable SOE structure. Key aspects include:

Consolidating subsidiaries and streamlining the corporate structure
Reducing the number of directors and commissioners
Maintaining employment levels, with no layoffs planned ²
Source 2
https://finance.detik.com/berita-ekonomi-bisnis/d-8258390/danantara-pangkas-bumn-hingga-anak-cucu-direksi-komisaris-juga-dikurangi

Rationale Behind the Consolidation

Senior Director Business Performance & Assets Optimization at Danantara, Bhimo Aryanto, emphasized that the current state of SOEs represents a significant challenge for the nation's economic sustainability. The high percentage of loss-making entities underscores the need for comprehensive reform.

Expected Outcomes

The consolidation is expected to enhance the overall performance and contribution of SOEs to Indonesia's economic growth. By focusing on profitability and efficiency, Danantara aims to create a more sustainable and competitive state-owned sector.

References