CP Prima wins Dipasena for $76m

The Jakarta Post, Jakarta

Local aquaculture firm PT Central Proteinprima (CP Prima) and its parent company, Thai agribusiness giant Charoen Pokphand, both operating under the Neptune consortium banner, have finally won the tender for the sale of Southeast Asia's largest shrimp farming firm, PT Dipasena Citra Darmaja.

State Asset Management Company (PPA) president Syahrial said in a statement released Thursday that the consortium had bid Rp 688.12 billion (US$76 million) for Dipasena, exceeding the minimum bid of $53.5 million set by the government.

The winner is also required to invest Rp 1.7 trillion on developing Dipasena.

Finance Minister Sri Mulyani Indrawati said the PPA had carried out the sale of Dipasena in line with all the relevant procedures and having consulted with all the relevant parties.

Financial advisor to the sale was Ferrier Hodgson, while lawyer Marsinih Martoatmodjo Iskandar Kusdihardjo acted as legal advisor. Meanwhile, the Attorney General's Office and the State Finance and Development Comptroller (BPKP) served as independent advisors.

The final bids for Dipasena were assessed by legal expert Pradjoto, economist Chatib Basri and the Maritime Affairs and Fisheries Ministry's director general for aquaculture, Made L. Nurdjana.

CP Prima outbid competitor PT Kemilau Bintang Timur, a Makassar-based major seafood processing firm.

Dipasena's acquisition will strengthen CP Prima's position as the world's largest aquaculture firm, as well as Charoen Pokphand, which owns a stake in CP Prima and in the nearby Bratasena shrimp farm.

Dipasena boasts 186,000 hectares of shrimp ponds run collaboratively with some 11,000 local shrimp farmers under a "core-plasma" scheme, in which the company acts as a nucleus providing loans to the farmers, and they in turn sell their produce to the company.

Before the crisis, Dipasena was one of the biggest shrimp producers in the world, with output standing at some 19,854 tons worth $167 million in 1996.

The PPA has been managing Dipasena, which it took over from Gajah Tunggal Group tycoon Sjamsul Nursalim as part of the settlement of his Rp 28 trillion debt to the state following the economic crisis of 1997 and 1998.

In September 2005, the PPA awarded an exclusive option to PT Recapital Advisors to take over Dipasena, which it later revoked after the company failed to abide by its commitment to inject fresh capital into the company and settle the company's loans to local farmers.

Meanwhile, CP Prima director Mahar Sembiring said the company would immediately implement a genuine partnership scheme with Dipasena's existing plasma farmers.

It has also assigned construction firms PT Truba Alam Manunggal and PT Wijaya Karya to assess Dipasena's production infrastructure, and conduct any necessary upgrades.