Indonesia positions PT Len as industry holding firm

Indonesian President Joko Widodo has issued a regulation to facilitate the establishment of a holding firm that will look to consolidate some of the capabilities of the country's state-owned defence industrial base.

The new government regulation – entitled ‘Number 123 of 2021' – expands the tasks allocated to Indonesia's leading defence electronics firm PT Len Industri, based in Bandung, to encompass a “holding” responsibility for several other defence industrial enterprises.

According to the regulation, PT Len Industri has the “intent and purpose to carry out business activities as a holding company in the defence industry”. Such activities include electronics, aircraft and their components, shipbuilding, vehicles, weapons, ammunition, and explosives. State regulations previously restricted PT Len Industri's activities to electronics, software, and electrotechnical hardware.

The new regulation goes on to outline other new responsibilities that will be assigned to PT Len Industri. These include holding company activities, head office activities, direct and indirect investments, asset restructuring, consultancy, and “other activities” to help it achieve its goals as a holding firm.

PT Len Industri's position as the holding firm was proposed in 2021 to promote collaboration across Indonesia's biggest defence firms in meeting the requirements of the Indonesian National Armed Forces (TNI).

Other priorities are to support increasing efforts to reduce military imports and stimulate industrial growth and jobs.

Core members of the holding group will be state-owned firms including PT Len Industri (electronics), PT PAL (shipbuilding), PT Pindad (land systems), PT Dirgantara (aerospace), and PT Dahana (explosives and propellants).