TEMPO.Co, Jakarta - President Prabowo Subianto revealed that he had previously thwarted attempts by certain parties to sell off the domestic defense industry to foreign entities on the grounds that the state-owned enterprises were deemed incapable of generating large profits.
"There were many companies that were seemingly about to be sold to foreigners, and I prohibited it!" President Prabowo said during a speech at the inauguration of five dams at the Meninting Dam in West Lombok, West Nusa Tenggara (NTB), on Friday, July 10, 2026, as quoted by Antara.
He stated that, previously, certain parties had sought to sell PT PAL, PT Pindad, and PT Dirgantara Indonesia. "Initially, the defense industry was about to be sold. PT PAL was about to be sold, PT Pindad was about to be sold, PT DI was almost sold. We turned them around! Now, we will revitalize all those companies," he said.
Prabowo, who served as Defense Minister during the second term of the seventh president, Joko Widodo, from 2019 to 2024, then announced that the state-owned defense firms have since experienced rapid growth and development.
"PT PAL can now produce formidable warships. PT PAL can now build submarines. PT PAL will manufacture advanced vessels," Prabowo said.
Furthermore, Prabowo stated that Pindad has now secured a contract with Saudi Arabia. "All rifles and machine guns for the Saudi military will be manufactured by PT Pindad. Our weapons are battle-tested," he said.
Since 2022, several state-owned enterprises operating in the defense sector have been consolidated under the holding company Defend ID. The five companies under the Defend ID umbrella are PT Len Industri as the parent firm, followed by PT PAL, PT Dirgantara Indonesia (DI), PT Pindad, and PT Dahana.
As Indonesia's largest shipyard, Surabaya-based PT PAL Indonesia has manufactured various types of vessels, including warships and hospital ships, to meet both domestic and export demands.
To date, PT PAL has constructed submarines at its Surabaya shipyard in cooperation with South Korea's Daewoo Shipbuilding & Marine Engineering (DSME), notably the KRI Alugoro-405.
In early July 2026, PT PAL also entered the physical construction phase for two Scorpene-class submarines in collaboration with France's Naval Group. The two companies commenced the initial steel-cutting stage this month. The Scorpene is an advanced submarine designed by the French Naval Group and ordered by Indonesia. The two Scorpene submarines ordered by Indonesia will be built entirely at PT PAL’s shipyard in Surabaya.
Read: What Weapons Is Indonesia Buying From India in New Defense Deal?
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