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Green field investment takes too much time: SCG
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PT Siam Cement Group (SCG) Indonesia president director Pathama Sirikul (left), SCG country director for Indonesia Nantapong Chantrakul (center) and SCG Indonesia business support director Vikorn Phongsatorn speak at a press conference in Jakarta on Oct. 3. (JP/Anton Hermansyah)
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hailand's Siam Cement Group (SCG) has said it would rather invest through merger and acquisition (M&A) to expand its business in Indonesia than start from scratch with a green field investment because of a licensing problem.
Establishing a business from nothing takes a long time because an investor has to obtain business permits from different authorities, said PT SCG Indonesia business support director Vikorn Phongsatorn in Jakarta on Tuesday, adding that land acquisition also delayed the process.
"The greenfield project takes so much time to establish. If we acquire an existing company, we can get the business permits, the land and the people at once," he said during the SCG Investment Forum in Jakarta on Tuesday.
Read also: Thai owned SCG to acquire more packaging companiesIn the period between 2011 and 2017, SCG made at least eight acquisitions, he said.
The company entered Indonesia in 1996 by establishing PT Siam-Indo Gypsum, a producer of gypsum board and gypsum plasters. It then joined with Indonesian consumer goods company Wings Group.
Investment Coordinating Board (BKPM) investment climate development deputy chairman Farah Ratnadewi Indriani said that investors often complained about difficulties in obtaining licenses and acquiring land.
She said the government was preparing a one-stop licensing service and developing industrial parks in trying to address the problem.
"We were working to solve the licensing and land acquisition problems. Now, in the BKPM, we have a one-stop service. The Agrarian and Spatial Planning Ministry was also working hard to improve the land management," she said. (bbn)
