Ex-rock star is
on a roll with investments in oil, media and communications
SETIAWAN DJODY SETS HIS SIGHTS ON ACQUIRING STATE-OWNED AIRLINE MERPATI AND BUILDING A MONORAIL FROM JAKARTA TO BANDUNG
Chairman of the Setdco Group
is a household name in Indonesia. Once a rock star, he is now an international
businessman and Chairman of the privately-owned Setdco
About 70 percent of Setdcos investments are in the oil business, but it also has interests in the media, agro-industry and telecommunications.
Setdco the groups name is a contraction of its Chairmans is hoping to take over the financially troubled state-owned airline Merpati, the second-largest in the country. Mr. Djody has set up a consortium with Canadian and Australian investors to buy a stake worth between $300 and $500 million.
I am hoping to take control of Merpati by acquiring the majority of shares in the company, he says. We also plan to take over Merpatis debts.
Mr. Djody says the aim is to boost the performance of the airline and add new routes. He has offered assurances that the current management would be retained if the takeover goes through. There wont be any layoffs or a reshuffle.
Finance is sought for a 300,000 bpd oil refinery planned for construction next year
which is 93.5 percent-owned by the government and the remainder by national
flag carrier Garuda Indonesia, has been in financial difficulties since 1998.
It recorded pre-tax losses of $5.6 million in 2001.
It is a strong consortium and the partners have confidence in me to lead the acquisition of Merpati, says Mr. Djody. We are proposing that we take a 90 percent stake and the government 10 percent.
The government is losing at least $2.2 million a month by subsidizing Merpati, which is why the airline should not be in the hands of the state. When we take it over, we will start an ambitious international expansion drive.
Mr. Djody is also planning to improve oil distribution in East Java, where he believes the infrastructure is poor. He hopes to begin building a 300,000 barrels-per-day oil refinery next year, and is looking for finance for the scheme, which will cost an estimated $3 billion.
COMMUNICATIONS interests stem from Mr. Djody’s role in founding mobile company Telkomsel.
Chinese participation in the project is crucial because the country would be
the main buyer of the refinerys products. His goal is to complete construction
of the refinery within two years, to coincide with the liberalization of Indonesias
downstream energy sector.
Mr. Djody has been active in the energy sector for three decades. His business includes running a fleet of tankers, as well as oil trading. He is a major shareholder in an oil exploration and exploitation company in Kazakhstan. Setdco also has interests in fisheries and oil palm plantations.
Another big project in the pipeline is the acquisition of part of the governments majority interest in the Papua Tangguh natural gas project, operated by British Petroleum (BP).
year, a tender by Chinas Guangdong Province for long-term liquefied petroleum
gas supplies prompted BP to begin marketing efforts for the Tangguh gas field.
BP is ready to go ahead with the project and expects to complete construction
Mr. Djody established his company in the late 1970s, focusing on construction and real estate. In 1977, with then Hong Kong Governor Tung Chee Wa, he started a shipping company for oil transportation.
Mr. Djody established an oil production company, Central Asian Petroleum, with
partners in Kazakhstan. The firm produces about 120,000 barrels of oil per day.
Mr. Djody was also one of the founders of mobile company Telkomsel, which was later taken over by the government. I am now negotiating with the government to purchase my former equity, he says, adding that Telkomsel has agreed in principle to sell back 14 percent.
The ambitious Chairman has yet another plan that he hopes will take off a monorail link from Jakarta to Bandung in West Java. He says: We are proposing it as a private development, with the government owning 20 percent of the shares in the new railway company.
The monorail development consortium would comprise the same companies as those in the bid to take over Merpati.
will, of course, be expect-ing to have some financing facilities and assistance
from the government in its capacity as one of the partners in the project. This
is one of the reasons why I think that, once the green light has been given,
the scheme can be achieved in a year to a year-and-a-half at most.
Mr. Djody acknowledges that his family background his great grandfather was Dr. Wahidin, the father of national awakening and pioneer in the movement against colonial rule in the early 19th century has played its part in his career.
I owe a lot to this country and I also have a duty to my country, he says. Although I know the Suharto family well, I have also played music with lyrics with political views.
My approach is multilateral; very cultural and very universal. I act and think globally. This country has everything, the only problem is bad management practise. We need big investment to lead our recovery, he says.
Setdco places special emphasis on promoting music and art, as well as rural development, through several foundations headed by Mr. Djody.
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