DSSA sets aside $250m to finance expansion
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Publicly-listed energy and infrastructure company PT Dian Swastatika Sentosa (DSSA), part of the Sinar Mas Group, will spend up to US$250 million on capital expenditure (capex) next year to support its businesses.
The company’s director and corporate secretary Hermawan Tarjono said in Jakarta on Friday that about 25 percent of the capex funds would be used to finance its newly acquired broadband multimedia business, 50 percent would go toward financing the construction of its power plant and the remaining 25 percent would go to its mining operations.
Through its subsidiary PT DSSA Mas Sejahtera, DSSA recently took over 70 percent of the shares in PT Mora Quatro Multimedia, a broadband multimedia provider, for Rp 87.5 billion ($9.05 million). With allocated capex funds, the firm plans to construct a fiber optics network in the Greater Jakarta area, which consists of Bekasi, Bogor, Depok, Jakarta and Tangerang.
The construction will take a year to complete, according to Hermawan. “We are still working on detailed plans. We expect this new business to start contributing to our revenues in 2014,” he said.
At present, Dian Swastatika runs four business divisions — services, energy, mining and chemical trading. In energy, it is developing a coal-fired power plant with a capacity of 2x150 megawatts (MW) in Musi Banyuasin, South Sumatra.
The plant, called Sumsel-5, will sell electricity to state utility firm PT Perusahaan Listrik Negara (PGN).
As previously reported, Sumsel-5 is scheduled to start commercial operations in 2015 and will need $400 million in terms of investment. “So far we have carried out soil investigation and some civil work at the project site,” Hermawan said.
Besides the planned coal fired power plant, the firm already has four other plants. They include PLTU Serang, Banten with a capacity of 156 MW, PLTU Karawang I, West Java with capacity of 35 MW, PLTG Tangerang, Banten with a capacity of 19 MW and PLTG Karawang II, West Java with a capacity of 90 MW.
In its mining division, the firm will use its capex funds to carry out infrastructure work around its mining sites. Dian Swastatika has mining blocks in the provinces of Jambi, Central Kalimantan and South Kalimantan. Its coal reserves and coal resources amount to 879 million tons and 1.94 billion tons, respectively.
Next year, the firm plans to increase its coal production volume to between 6 and 7 million tons, up 10 percent to 20 percent from the 2012 target.
It will still focus on selling coal to China and India, its two biggest markets.
Dian Swastatika also exports the commodity to Thailand. Exports make up 65 percent of the company’s coal production, followed by the domestic market accounting for 35 percent. It hopes to reap $750 million in revenues next year, 25 percent higher than its 2012 forecast.
According to Hermawan, the firm is currently working to obtain approval from the Singapore Exchange (SGX) regarding its share swap deal, with Singapore-based timber and construction firm United Fiber System (UFS) Ltd.
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