The shares of PT Wijaya Karya Beton (Wika Beton), a subsidiary of state-owned construction firm Wijaya Karya, made an impressive debut during the first trading on the Indonesian Stock Exchange (IDX) on Tuesday.

Wika Beton'€™s shares, listed under WTON, opened at Rp 770 (7 US cents) apiece from its initial public offering
(IPO) price of Rp 590. Shares peaked at Rp 885, up 50 percent from its original price, before closing at Rp 760.

'€œOur shares did quite well. We have enough to fund our capital expenditure [capex] until 2015,'€ Wika Beton finance director Entus Asnawi Mukhson told reporters after the listing.

The concrete maker earned Rp 1.2 trillion from the IPO, of which 85 percent will be used to finance business expansion while the remaining 15 percent will be spent on working capital.

'€œWe plan to build new plants in Lampung, Cilegon and Makassar. Hopefully construction will start soon and can be completed in mid 2015,'€ Wika Beton president director Wilfred Sangkali said, adding that each of the plants would cost up to Rp 175 billion.

Moreover, the company has also secured andesite rock quarries in three cities in Java, Sumatra and Sulawesi. It has also started the construction of its quarry plant in Bogor, West Java.

'€œIt'€™s important for the sustainability of our company because with the quarry plant, we will be able to supply our own needs for raw material needed to produce concrete,'€ said Wilfred, adding the plant in Bogor, built on a 30-hectare plot of land, is expected to start operating in October this year.

According to Wilfred, the total investment for the quarry plant in Bogor totaled Rp 100 billion and would be able to produce up to 350 tons per hour on one processing machine upon its completion.

'€œWe'€™re planning to add two more processing machines and expand another 30 hectares in Bogor,'€ he said, adding that the company'€™s ultimate goal in Bogor was to produce more than 1,000 tons per day.

In addition, Wika Beton will expand its business to Myanmar as part of the company'€™s positioning for the ASEAN Economic Community (AEC).

'€œWe will build a plant worth Rp 150 million in Myanmar with a local company, but at the moment we are still in talks with that company for the joint venture. Hopefully construction will start late this year,'€ said Wilfred.

He added that the company is also planning to expand to the Philippines as well as to the Middle East later this year.

According to Entus, the 23.47 percent shares sold were mostly bought by domestic investors.

'€œAround 66 percent were domestic investors, both individuals and institutions, while the rest were bought by foreign investors,'€ he said.

Wika Beton earlier this year sold 23.47 percent of its shares, or about 2.04 billion shares, through an IPO held on March 26 to 28. Its shares were later oversubscribed 17.13 times.

Whether or not Wika Beton'€™s shares in the stock market
will be stable, people must wait until Friday, according to PT Investa Saran Mandiri analyst Kiswoyo Adi Joe.

'€œWika Beton has a good business. However, I think we have to wait for a while to determine if its shares will be stable,'€ he said. (dwa)

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