W

ika Beton, a subsidiary of the country'€™s largest builder, Wijaya Karya, has concluded a US$23.5 million transaction to acquire a pre-stressed concrete company, adding to the publicly listed firm'€™s business expansion.

Wika Beton, the largest pre-cast and pre-stressed concrete producer in Southeast Asia, has acquired a 90-percent stake of Citra Lautan Teduh (CLT), a concrete firm that is a joint venture between Korea'€™s Pumwang Co. Ltd. and local company Citra Harapan Abadi.

'€œThis transaction is intended to develop our core business, to expand our marketing coverage, as well as to boost our production capacity by the next operating year,'€ the company'€™s corporate secretary, Puji Haryadi, said in a statement announcing the acquisition published on the Indonesia Stock Exchange (IDX) website.

Puji said that his company was interested in investing in the newly acquired company because '€œCLT already has a good reputation, both domestically and abroad'€ with markets stretching from Singapore to Brunei Darussalam as well as domestic markets across Sumatra and Riau Islands.

CLT'€™s capacity stands at 100,000 tons per annum and Wika Beton aims to boost it to 350,000 tons by next year.

Wika Beton is in the midst of a major expansion to further strengthen its grip on the country'€™s concrete industry, with rising demand from growing infrastructure projects.

The concrete-maker earned Rp 1.2 trillion from its initial public offering (IPO) earlier this year, of which 85 percent will be used to finance business expansion while the remaining 15 percent will be spent on working capital. It also secured a Rp 500 billion loan from Eximbank in July.

Wika Beton'€™s total output stood at 2 million tons a year by the end of last year. The company has targeted to see its production jump by 10 percent by year-end once its two new facilities in Lampung and Cilegon (Banten) start operating.

The Cilegon plant is a joint venture with state-owned construction giant Krakatau Steel'€™s subsidiary Krakatau Engineering, and cost the firm Rp 175 billion in investment.

The Lampung facility, which will be integrated with a port, absorbed a total investment of Rp 350 billion.

With the new facilities, Wika Beton will have 13 factories '€” including the newly acquired site in Batam '€” in operation by the end of this year.

Late last year, the company commenced operations at Wika Kobe in Karawang, West Java, which produces 75,000 tons of precast concrete annually.

Wika Beton is also looking to expand its business portfolio abroad, having prepared Rp 300 billion to support its expansion to Myanmar next year.

Shares of Wika Beton traded at Rp 1,165 apiece on Friday, surging by 53 percent from the company'€™s first day of trading in April and hovering above the Jakarta Composite Index (JCI), which has risen by 20.3 percent year-to-date.