The Jakarta Post
Thai cement producer Siam Cement Group ( SCG ) plans to expand its business in Indonesia through partnership with Jakarta stock exchange listed company Chandra Asri Petrochemical Tbk, promising US$1 billion worth of investments.
Speaking after a courtesy visit to the State Palace that included a meeting with President Susilo Bambang Yudhoyono on Tuesday, SCG president and CEO Kan Trakulhoon said the new investment would include the construction of a petrochemical plant worth an estimated $300 million in Sukabumi, West Java.
The Sukabumi plant is expected to produce 5,000 tons of cement per day or 1.78 million tons a year for the domestic market.
The remaining $700 million would be earmarked for future acquisitions, Kan said without elaborating.
In November 2011, SCG acquired a 30 percent stake in publicly listed Chandra Asri, Indonesia’s largest integrated petrochemical firm.
According to Kan, SCG’s total assets in Indonesia reached $970 million, making the country SCG’s biggest foreign investment destination.
To date, Kan said, SCG’s production outside Thailand had reached 10,000 tons per day. “Six thousand tons are produced here in Indonesia,” he said.
“We have also been investing in Vietnam, the Philippines and Cambodia,” Kan said.
Yudhoyono welcomed the investment plan, saying that Indonesia and Thailand had always had a good bilateral economic cooperation.
“I welcome the plan in the hope that your firms can contribute for a better Indonesian economy,” Yudhoyono said upon opening the meeting between him and SCG leaders at the Presidential Office on Tuesday.
SCG began its business in Indonesia in 1996 and has continued expanding here due to the Thai firm’s confidence in Indonesia’s solid economic growth, Kan said.
Also in 2011, SCG acquired two other listed companies in Indonesia, namely PT Keramika Indonesia Assosiasi, which is 93.5 percent owned by the Thai conglomerate, and PT Kokoh Inti Arebama ( 99 percent ownership ).
In January, SCG spent $135 million to acquire 100 percent of Australia-based cement producer PT Boral Indonesia.
Established in 1913, SCG is a business group controlled by Thailand’s royal family. The group comprises dozens of firms whose businesses range from petrochemical, paper, cement, construction and material, to distribution.