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T Wijaya Karya Beton (WIKA Beton) signed on Monday an agreement with PT Wijaya Karya (WIKA) and PT Krakatau Engineering (KE) on a joint venture for precast concrete production.

The joint venture, named PT Wijaya Karya Krakatau Beton, is 60 percent owned by WIKA Beton, 30 percent owned by KE and 10 percent owned by WIKA. Its authorized capital stands at Rp 175 billion (US$14.46 million) and its paid up capital amounts to Rp 50 billion.

KE is a subsidiary of Indonesia'€™s largest steelmaker PT Krakatau Steel, while WIKA '€” a construction firm '€” is the parent company of WIKA Beton.

Both Krakatau Steel and WIKA are state-owned enterprises.

According to WIKA Beton president director Wilfred A. Singkali, the joint venture will include construction of a Rp 132 billion precast concrete factory on a 3-hectare site in Cilegon, Banten.

The initial production capacity is set at around 40,000 tons to 50,000 tons per year and may be upgraded to 80,000 tons per year. Construction will begin in January and is expected to be complete in August.

KE president director Bambang Purnomo said that the factory'€™s initial products would serve the operational needs of the Krakatau Steel Group in Cilegon.

'€œThey will also meet the needs of PT Krakatau Posco, which is the joint venture between Krakatau Steel and South Korea'€™s POSCO,'€ he told reporters after the signing agreement ceremony at WIKA headquarters.

The joint venture is expected to book around Rp 100 billion in revenues with its initial production capacity of 40,000 tons per year.

The partnership with WIKA Beton and WIKA is KE'€™s third joint venture as it has previously established PT Krakatau Daedong Machinery with South Korea'€™s Daedong Heavy Industry and PT Krakatau Samator with PT Aneka Gas Industri and Bapelkes Krakatau Steel.

For WIKA Beton, the upcoming factory will be its 10th factory. WIKA Beton currently operates nine precast factories, including one factory that it jointly runs with PT Komponindo Betonjaya (KOBE), a subsidiary of Japan'€™s Mitsubishi Construction.

The total capacity of all those factories now amounts to 2 million tons per year.

Meanwhile, WIKA Beton finance director Entus Asnawi said that his company was looking to a 20 percent growth in revenues in 2014.

This year, WIKA Beton will most likely reap Rp 2.4 trillion in revenues and Rp 220 billion in net profits, 20 percent and 22 percent respectively higher than it achieved in 2012.

Commenting on its initial public offering (IPO) plan, Entus said that WIKA Beton hoped to be able to go public around March 2014. It expects to raise between Rp 1.4 trillion and Rp 1.5 trillion in funds by releasing 27.5 percent shares to finance its expansion projects.

At the moment, three consortia of securities firms have expressed their interest in underwriting WIKA Beton'€™s IPO '€” CIMB Securities Indonesia and BNI Securities; Kim Eng Securities, BCA Sekuritas, Indo Premier Securities and Trimegah Securities; Bahana Securities, Mandiri Sekuritas, Danareksa Sekuritas and Sucorinvest.

WIKA Beton is slated to announce the underwriters on Tuesday.