CPC Corp to Speed Up Privatization
OREANDA-NEWS. August 21, 2013. CPC Corp., Taiwan, the country's state-run oil supplier, said Saturday that it will speed up its pace in privatization in order to become privatized by the end of 2017.
In an interview with the CNA, CPC Chairman Lin Sheng-chung said the company has held meetings to help its employees gain a better understanding of the importance of privatization, which is expected to boost the state-owned company's competitiveness.
Lin said the CPC will continue to communicate with its employees in an attempt to secure their approval to privatize the company as scheduled.
In April 2012, President Ma Ying-jeou instructed the Ministry of Economic Affairs (MOEA), which owns CPC, to map out a schedule for the state-own oil refinery's privatization.
As part of the process, the State-owned Enterprise Commission under the MOEA has decided to unload a 55 percent stake in CPC by the end of 2017.
However, based on a decision made by the Legislative Yuan in 2003, the MOEA must obtain the greenlight from the CPC's union through negotiations, before launching a plan to hand the CPC stake to private hands.
Lin said that 10 years after the Legislative Yuan's decision, the CPC privatization plan fails to make any progress, with strong opposition from the union. He said the company meanwhile faced fiercer-than-ever competition in the global market, and that it is becoming increasingly urgent for CPC to go private, to take on upcoming challenges and grow.
The CPC executive said privatization is the only solution for the oil company to break the limitations imposed by several special laws for state-owned entities, such as the Government Procurement Act and the Budget Act. By privatizing, the company will have a leeway in decision making to seize business opportunities, Lin said.
He added that as a company which goes private late compared with its counterparts, CPC has faith that it will be able to avoid the mistakes the others had made during the privatization process and make its own plan proceed smoothly.
Among the companies which have completed privatization, China Steel Corp., one of Taiwan's largest steel maker, was privatized in 1995, while Chunghwa Telecom Co., the country's largest telecom operator, went private in 2005.
Lin said CPC's privatization plan will include details, such as a stake sale program, employees' welfare, work rights, and the company's development plan in the future.