Sovereign Fund Danantara to Consolidate SOEs for Enhanced Efficiency
Danantara plans a major consolidation effort to drastically reduce the number of state-owned enterprises (SOEs) under government control from over 1,000 to approximately 230–340 within the next five years. This strategic initiative is driven by a critical need to enhance the overall efficiency and global competitiveness of Indonesia’s state-owned sector. Rosan Roeslani, the Chief Executive Officer of Danantara, explained that the current SOE ecosystem has become excessively fragmented, spanning 12 diverse sectors and encompassing parent companies, numerous subsidiaries, and sub-subsidiaries. This massive consolidation, he stated, is absolutely essential for strengthening oversight mechanisms and optimizing the business performance of these crucial national assets. Roeslani confirmed during the HIPMI–Danantara Indonesia Business Forum in Jakarta that “In reality, there are nearly 1,044 companies across 12 sectors, from construction to aviation and ports. What’s most important now is consolidation.” The government aims to streamline this complex structure by reducing the total number of operational entities through strategic mergers and carefully managed divestments, ultimately creating a more manageable and competitive portfolio under the stewardship of Danantara.
Streamlining the SOE Ecosystem for Efficiency and Oversight
The impetus for this massive restructuring stems from the sheer scale of the SOE network, which currently comprises about 65 core parent SOEs directly managed under the former State-Owned Enterprises Ministry. However, when factoring in all their subsidiaries and affiliates, the total number of entities balloons to over a thousand. To address this fragmentation, the government recently divided the former SOE Ministry into two distinct entities: Danantara, which functions as the sovereign wealth fund responsible for actively managing the vast portfolio of SOE assets, and the State-Owned Enterprises Regulatory Agency (BPBUMN). The BPBUMN’s role is to act purely as a regulator and hold the state’s crucial “golden share”—a symbolic 1 percent Class A stake—in each enterprise. The remaining 99 percent of the government-held shares have been transferred to Danantara, which now operates the assets with a mandate for commercial performance and strategic growth. Roeslani noted that with total assets under management now around $1 trillion since its establishment in February, Danantara is positioned among the world’s five largest sovereign wealth funds. This expanded capacity will enable the fund to execute a faster, more coordinated, and more effective restructuring of the SOEs. He reiterated the goal: “As we consolidate, we want to make this system effective and efficient. From over a thousand companies, we have reviewed and projected the structure to only around 230 to 340 SOEs in the next five years.”
Strategic Mergers to Strengthen Key National Sectors
The consolidation efforts under Danantara are not merely about reducing numbers but are also focused on creating stronger, more competitive business entities capable of dominating their respective markets. These strategic changes include early moves such as the planned integration of Pelita Air, a subsidiary of the state oil giant Pertamina, into the Garuda Indonesia Group, which serves as the country’s national airline ecosystem. This specific merger is aimed squarely at strengthening Indonesia’s entire aviation sector by generating significant operational and financial synergies across the two carriers. By bringing related entities together under the Danantara management structure, the government expects to eliminate redundant functions, unlock cross-business efficiencies, and increase the overall enterprise value of these vital national assets. This approach positions the newly streamlined SOEs to play a far more impactful role in driving Indonesia’s economic development, particularly in key strategic sectors like transportation, energy, and infrastructure. The reduction to 230–340 core entities will create a much sharper focus for management and greater transparency for investors, ultimately supporting the national ambition for a more robust and globally competitive economy driven by efficient state-owned enterprises.
