TRENGGALEK – Expansion plans for the Regional Multi-Business Company (PDAU) in Trenggalek face regulatory hurdles. Local officials say any new business unit requires amendments to existing regional regulations.
The Trenggalek government confirmed that PDAU cannot freely open new business sectors without first completing legal reviews and revising the regional bylaw that governs the state-owned company.
Head of the Economic and Natural Resources Subdivision of Trenggalek Regency Agus Subchi said the company’s operations still rely on Regional Regulation No. 14 of 2006 concerning the establishment of the regional enterprise.
In addition, the company’s capital participation mechanism remains regulated under Regional Regulation No. 4 of 2007, which governs local government investment in PDAU and the regional water utility company.
“If we want to add a new business unit, the process is not simple,” Agus said. “The administration must conduct studies first and revise the establishment regulation.”
According to him, the process requires several stages, including feasibility studies, legal reviews, and adjustments to current regulations. Because of that, the local administration has not prioritized business expansion in the near future.
Instead, officials plan to focus on improving existing operations, especially the regional ice factory managed under PDAU.
The government considers the strategy more realistic because PDAU still needs internal restructuring and operational improvements before pursuing wider expansion plans.
“For now, we want to improve the businesses that already exist, especially the ice factory,” Agus explained. “That is the sector we can still push to support operational performance.”
He added that production problems at the ice factory also remain a major concern for the administration. Several machines still operate below optimal capacity, affecting overall production output.
Because of that, the local government currently prioritizes machine rejuvenation and maintenance to stabilize production before considering new investments.
“Right now, our main focus is improving production and increasing operational capacity,” Agus said. “After conditions become stable, then we can discuss expansion.”
Officials also stressed that any future business development must consider efficiency and profit potential. Without careful planning, additional business units could create financial pressure instead of generating revenue.
The administration hopes the restructuring efforts will eventually restore PDAU’s financial condition and strengthen its contribution to regional income.
Local governments across Indonesia often rely on region-owned enterprises like PDAU to support public services and generate additional locally sourced revenue, commonly known as Pendapatan Asli Daerah (PAD).
However, many regional enterprises continue facing operational and regulatory challenges, especially when administrations seek to expand into new commercial sectors.