Jakarta. Sovereign wealth fund Danantara said the ongoing consolidation of state-owned enterprises is being carried out through a structured, data-driven process rather than arbitrary cuts, as the government moves to streamline a sprawling SOE ecosystem.

Danantara Chief Operating Officer Dony Oskaria said every transformation step is based on extensive studies and the underlying fundamentals of each company.

“We are not simply carrying out an SOE consolidation process, but conducting a fundamental review of all SOEs,” Dony said during the Investor Daily Round Table in Jakarta on Wednesday.

Indonesia currently has hundreds of companies carrying the SOE label, many of which operate in overlapping sectors. The government plans to reduce the number through consolidation of firms with similar business lines, but Danantara stressed the focus is on fixing structural weaknesses rather than just shrinking headcount.

The scale of the challenge was highlighted by Danantara Chief Executive Rosan Roeslani, who said in October 2025 that Indonesia had far more state-owned enterprises than previously assumed, with the number rising to nearly 1,044 companies across 12 sectors, up from an earlier estimate of around 800.

That figure contrasts sharply with official data from previous years, when the number of SOEs stood at 108 in 2020, falling to 95 in 2021, 77 in 2022, 70 in 2023, and 68 in 2024, reflecting earlier rounds of consolidation and restructuring.

Indonesia has already pursued consolidation through holding company structures in several sectors. These include the merger of four state port operators into Pelindo, the creation of mining holding MIND ID to group state-owned mineral and coal producers, and the restructuring of state insurers under Indonesia Financial Group (IFG). The government has also merged dozens of plantation companies into a single PTPN holding to improve efficiency and financial performance.

Dony explained that Danantara’s review begins with a comprehensive assessment of each SOE’s business fundamentals, including its business model, revenue sources and composition, cost structure, and EBITDA margins. These indicators are then benchmarked against industry best practices.

The process also includes market analysis to gauge addressable market potential, long-term industry prospects, and whether a sector is approaching a sunset phase. This is followed by an internal capabilities assessment covering financial strength, organizational structure, and human resource quality. The results are mapped into a matrix that groups companies by industry.

As an example, Dony pointed to the logistics sector, which currently includes 21 SOEs. The review found that most lacked a clear and competitive business model, with some merely handling transactions from their parent companies rather than operating independently.

“This shows the core issue is not simply the number of companies, but the misalignment of business models and strategies,” he said.

Against this backdrop, Dony said the presidential directive to transform SOEs from roughly one thousand entities into about three hundred should not be seen as a numerical exercise. Instead, the ultimate goal is to ensure SOEs are capable of competing sustainably, supported by adequate market scale and strong business foundations.

“We are not randomly deciding which companies to consolidate. This is a process that we have designed very carefully,” he said.

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