JAKARTA: Indonesia's government has abandoned a plan to combine state-owned agricultural commodities' companies worth $5.6 billion to set up what would have been one of the world's largest plantation firms, the minister in charge said on Monday.
State-owned Enterprises Minister Dahlan Iskan declined to specify the reasons behind the government's decision, but officials involved in the merger said the plan had run into several bureaucratic and taxation hurdles.
The government had first proposed setting up the holding company in February 2012. Some officials in Iskan's ministry said the plan may be revived if the project manages to gain the necessary government approvals.
"The plan is unsuccessful," Iskan told Reuters. The 15 state firms that were slated to be merged produce palm oil, rubber, coffee, cocoa, tea, rice, cassava and sugar.
Indonesia is the world's biggest exporter of palm oil and the second biggest producer of rubber and robusta coffee. It is also a major cocoa producer.
The last mega-plantation merger was in 2008 when Malaysia's government pushed for the tie-up of three state-linked planters to form Sime Darby.
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