REPUBLIKA.CO.ID, JAKARTA -- State-Owned Enterprises (SOE) Minister Dahlan Iskan has guaranteed that PT Inalum will not face raw material supply problems after it is taken over from Japan by his ministry on November 1, 2013.

"The House of Representatives (DPR) and the government have approved the acquisition of Inalum and state firms are ready to manage it," Dahlan Iskan said after opening an Annual Pertamina Quality Awards 2013 function at the headquarters of state-owned oil and gas firm Pertamina here on Wednesday.

Dahlan Iskan said that based upon the master agreement on its acquisition, Inalum will be 100 percent owned by the Indonesian government.

The minister noted that some have expressed doubts about Inalum facing difficulties in obtaining raw materials because Inalum has been supplied with raw materials from Australia.

"There are also parties who doubted that Inalum would be able to market its products. All these are not true," the minister said.

He added that an agreement had been reached for the purchase of raw materials for one year. The market for Inalum?s production is also guaranteed, as products will be absorbed by the domestic market.

"So far, about 70 percent of its products were exported to Japan. Now, domestic industries need Inalum's products and contracts have been signed with domestic companies," the minister said.

The Indonesian government will acquire 58.8 percent of Inalum from Japan and own 100 percent of the company as of November 1, 2013.

The government has offered a new book value for the takeover of the company's 58.8 percent shares worth Rp558 million US dollars.

"So, there is no need to worry about it. Let's wait for the shareholders' general meeting, which will be held in the next one to two days," the minister added.

Having decided to acquire PT Indonesia Asahan Aluminium (Inalum) from Japan, the government is preparing plans for developing the aluminum producer once the purchase is completed.

"After the government acquires a 100-percent stake in it, the company will become a state-owned enterprise (SOE) and will be managed through a government regulation," Industry Minister MS Hidayat said last week.

Commission VII of the House of Representatives (DPR) on Wednesday last week agreed to the government's plan to purchase Inalum shares by November 1.

In accordance with law No. 19/2012 on State Budget 2013, the government needs the approval of the House of Representatives to pay Japan Rp7 trillion to buy Inalum.

Apart from Commission VII, the House's Commission VI and XI have also agreed to the Inalum acquisition plan.

Of the Rp7 trillion required for the share purchase, Rp2 trillion has been allocated from the revised 2012 state budget and Rp5 trillion from the revised 2013 state budget.

After Inalum's acquisition is completed, the company's aluminum products will be exclusively marketed for domestic consumption, the minister pointed out.

Inalum began operating on January 6, 1976. The aluminum joint venture between Indonesia and Japan was based on an agreement signed on July 7, 1975, which is to expire on October 31, 2013.

The government recently decided not to extend the contract. Indonesia holds a 41.13-percent stake in the company, while Japan controls 58.87-percent of the shares.

Japan, with 12 private Japanese firms in the joint venture, is the majority shareholder through Nippon Asahan Aluminium (NAA).

Inalum has its production facility in Asahan, North Sumatra with an annual production capacity of 230 thousand to 250 thousand tons.

According to MS Hidayat, Inalum's management will be handed over to the SOE Ministry after it is acquired from NAA of Japan.

Its annual production capacity will also be increased from 250 thousand tons to 450 thousand tons over the next two to three years.

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