The Indonesian Government has planned to reduce the number of state-owned enterprises (SOEs) from 120 to 80 in a bid to create more efficiency, a top official has said.

Revealing the plan, Indonesian State Enterprises Minister Dahlan Iskan added that the scheme will be implemented by the merger and acquisition of local SOEs operating in the same fields and establishing them as joint stock companies, entitled to issue shares to the market to mobilise capital.

Chairul Tanjung, Coordinating Minister for the Economy, said M&A activities will help improve the operational effectiveness of Indonesian enterprises. Evidently, some local firms have already improved their operation after the change, he said.

Indonesia is the world’s largest producer of palm oil and a leading exporter of the product. This year’s net profits made by local businesses’ will soar considerably, as there is an upward demand for oil in the world market, Dahlan believed.

Those operating in the sphere of banking and mining are expected to contribute greatly to the 2014 total net profit of Indonesian SOEs, which the official predicted will reach 173.6 billion rupiah (14.704 billion USD), higher than the 150.7 billion rupiah (12.765 billion USD) amount seen in 2013.-VNA