Govt takeover of Inalum worries employees

The government finally secured approval from the House of Representatives on Wednesday to take over PT Indonesia Asahan Aluminium (Inalum) from Japanese consortium Nippon Asahan Alumunium (NAA) after a pompous political drama. The Jakarta Post’s North Sumatra correspondent Apriadi Gunawan reported on the concerns of local people and Inalum employees in regard to the takeover plan, which will take place on Friday.

Employees of the North Sumatra-based aluminum producer PT Indonesia Asahan Aluminium (Inalum) are reducing their activities ahead of the government’s takeover of the company from the Japanese consortium Nippon.

Most of the 1,340 homes in a housing complex for the company’s employees — located approximately 15 kilometers from the company’s smelting plant in Kuala Tanjung, Batubara regency, on 200 hectares of land — have also been left deserted.

Some Inalum employees said that recently the company’s activities had slowed aside from its factory, which had continued its 24-hour operation.

According to data from the State Owned Enterprises Ministry, the company booked net profits of about US$57 million in the 2011/2012 fiscal year which ended in March. In 2012/2013 fiscal year, net profit declined to $24 million.

In the 2013/2014 fiscal year, Inalum is expected to book total revenues of about $555 million, and net profit of $96 million.

Total assets of the company which employs about 1,900 people, reached $999 million as of September, this year.

Inalum employees said their personal welfare improved along with the company’s profit.

Inalum, established in 1976, is 41.12 percent owned by the government and 58.88 percent owned by NAA, a consortium of 12 Japanese companies, including Sumitomo Chemical Co. Ltd., Sumitomo Shoji Kaisha Ltd., Mitsui Aluminium Co. Ltd. and Mitsubishi Corporation.

The government has decided to take over the Japanese consortium’s shares and firms when the cooperation agreement is scheduled to expire by the end of this month.

The company will then be turned into a state-owned enterprise (SOE) under the supervision of State-Owned Enterprises Ministry. But local governments from several regencies near Kuala Tanjung have also expressed their willingness to take over part of the company’s shares so that the local people would have a say in the operation of the company.

“We have apprehensions about that. Personally, I’m proud and thankful that the government took over Inalum from Japan, but I don’t know how it will affect the company’s financial performance, which affects the employee’s welfare, in the future,” one of the employees said.

Some Inalum managerial board staffers said that they were also anxious about the company’s future after being managed as an SOE. Inalum corporate secretary Deddy P. Tampubolon said the company employed 1,932 permanent staffers and more than 1,000 outsourced workers. Deddy assured the employees that they would not face turmoil in the days leading up to Inalum’s acquisition.