Indonesia’s largest cement producer, PT Semen Gresik, said it would acquire two Malaysian cement companies this year in a move to enhance production capacity.
Semen Gresik president director Dwi Soetjipto said Sunday that his company had negotiated the acquisition plan with the Malaysian firms.
“We are already in the final stages with one of the companies and waiting for final negotiations while we conduct due diligence into the other company,” he told The Jakarta Post.
“We are not certain about how much of a stake we will own in those companies, but currently it looks like it may be less than 50 percent.”
Dwi declined to name the companies, but an internal source with knowledge on the issue said Semen Gresik was looking to buy Cement Industries of Malaysia Bhd. (CIMA), which has an 18 percent share of the Malaysian cement market.
Dwi said his company had allocated US$500 million to buy shares in the Malaysian firms and that Semen Gresik would raise additional funds by issuing global bonds worth between $200 million and $300 million in the first half of this year.
He added that apart from acquiring the two Malaysian companies, his company would also build two new plants in Sumatra and Java with investments of $300 million and Rp 3.5 trillion ($389 million) respectively as part of this year’s expansion plans.
To facilitate this plan, he said, his company had allocated Rp 4 trillion to Rp 5 trillion for capital expenditure, with Rp 1 trillion to Rp 2 trillion to be financed by a loan from Bank Mandiri.
The Sumatra plant is expected to produce between two million and three million tons of cement a year, Dwi said. He did not specify the output expected from the other plant, which is to be located in Rembang, Central Java.
“Semen Gresik is targeting to produce an additional 1.5 million tons of cement in 2011,” he said, adding that last year, the Semen Gresik Group, which includes PT Semen Padang in West Sumatra, PT Semen Gresik in East Java and PT Semen Tonasa in South Sulawesi, produced 18.5 million tons of cement.
“With the new plants and the two Malaysian factories we’re acquiring, we expect to produce 26.5 million tons of cement in 2012,” he said.
The company built two new plants in Tuban, East Java, and in Tonasa, South Sulawesi, both of which began operating at the end of last year.
Earlier last year, Semen Gresik was nominated to buy a stake in PT Semen Baturaja in South Sumatra after the State-Owned Enterprises Ministry gave Semen Baturaja the choice of merging with Semen Gresik or floating shares in an IPO. (lnd)
