Gresik secures Rp 1 trillion loan from Mandiri

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Indonesia’s largest lender, Bank Mandiri (BMRI), has agreed to provide Rp 1 trillion (US$106 million) in working capital loans for the nation’s top cement maker, PT Semen Gresik (SMGR), to support the company’s day-to-day
operations.

The one-year loan will be used to strengthen Semen Gresik’s increased need for capital as the company only operated one new factory in Tuban, East Java, president director Dwi Soetjipto said after a signing ceremony on the agreement between the two state-owned firms on Thursday.

The working capital credit will also help Semen Gresik’s operational liquidity planning, he added.

“As the company expands more actively in building factories in many regions, sound liquidity management is an absolute need that cannot be bargained,” Dwi said.

“Bank Mandiri offered a working capital loan, which is a standby loan, so the company positively welcomes this facility, especially with competitive interest rates,” he said, without disclosing the rates.

Semen Gresik this year completed construction of two new factories in Tuban in East Java and Tonasa in Makassar, South Sulawesi. The new factories increased production capacity to 25 million tons a year from 20 million tons.

“We hope that the working capital loan facility can help smoothen Semen Gresik’ operations, so that it can continue to meet demands for cement supply in Indonesia, which in turn can participate in developing the nation’s economy,” Bank Mandiri vice president director Riswinandi said, expecting to develop much-needed infrastructure projects in the country.

Indonesia’s economy has the potential to grow over 7 percent per year compared to 6.3 percent at present, but infrastructure bottlenecks, such as bad roads and overcapacity at ports, are hindering the country’s full potential, economists have said.

With increasing demand for cement against the backdrop of growth of competitive industries, Semen Gresik aims to boost efficiency in managing its operational funds so that the company’s business can grow further.

Bank Mandiri will also support the Semen Gresik Group — which includes its subsidiaries from Semen Padang, Varia Usaha, Swadaya Graha, SSG Prima Beton and others — through a so-called national pooling facility that would
consolidate the companies’ operational accounts.