50% of WGI stake to be sold to Pennzoil
Thursday, September 7 2000 - 04:00 AM WIB
Shareholders of PT Wiraswasta Gemilang Indonesia (WGI), the producer of Pennzoil lubricating oil, is offering 50 percent of stake at the company to its principal Pennzoil-Quaker International Corp for US$30 million.
WGI Chief Executive Officer A.P. Batubara the sales of the 50 percent stake to Pennzoil aimed to strengthen the company's presence in the domestic lubricant market.
"Negotiation process on the sale of the shares to Pennzoil is under way. I offer them 50 percent stake, so that our production and market share will be strengthened," Batubara said after receiving an ISO 9002 certificate from TUV International of Germany in Jakarta on Wednesday.
WGI becomes the first private lubricating oil company in Indonesia that has secured ISO 9002 quality assurance certificate.
Batubara explained that he was the majority shareholder at WGI, with other stakes held by the Asian Development Bank (ADB).
He noted that some of the proceeds from the sales of the stake would be used to repay the company's debt and for the development and expansion of businesses.
He projected that after the sale of stake to Pennzoil, the company's sales are projected to triple from the current level.
He noted that currently around 450,000 metric tons of lubricants is sold in Indonesia annually, of which WGI controls around 12 percent to 15 percent of the market share.
WGI lubricant refinery plant can process up to 75 million liters of lubricant per annum. All of its products are sold in the domestic market.
Batubara also expressed his disagreement with various proposals for the government to revoke state oil and gas firm Pertamina's monopoly in the importation of lube base oil.
He noted that in any case, Indonesia should not liberalize all of its market, including its lubricant market. (*)