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Mandiri provides Rp 300b credit facility to Wika Beton
State lender Bank Mandiri has agreed to provide a credit facility worth up to Rp 300 billion (US$21 million) to settle the payments of state construction company PT Wika Beton Precast (Wika Beton) to its suppliers
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span>State lender Bank Mandiri has agreed to provide a credit facility worth up to Rp 300 billion (US$21 million) to settle the payments of state construction company PT Wika Beton Precast (Wika Beton) to its suppliers.
“This is the latest cooperation between state-owned enterprises [SOEs] in the country. This agreement will also have a positive impact on our operations,” said Mandiri’s senior vice president, Choirul Anwar, during a press conference in Jakarta on Monday.
Choirul said the invoice financing would boost the liquidity of Wika Beton’s suppliers and improve the quality of materials ordered by Wika Beton from the suppliers. The credit facility would also help Wika Beton focus more on its operations to produce precast concrete blocks and ready-mix cement.
When asked if the Rp 300 billion credit limit could be increased at a later date, Choirul said it would depend on how many more projects Wika Beton would undertake in the future. “If Wika Beton receives a significant increase in project orders and requires new suppliers, we will support them,” said Choirul.
Meanwhile, Wika Beton’s precast director, Antonius Yulianto Nugroho, also said the invoice financing facility would be used to settle payments to suppliers of stone, cement, iron and transporter partners.
"This financing can ease the cash flow of our suppliers. Previously, they had to wait about 180 days for the payment with SCF [supply chain financing] facilities. Now, it can be covered by invoice financing," he explained.
Meanwhile, Wika Beton Precast recently finished preparing new factories that would produce railway bearings in Banten province and West Java. The railway bearings will be used for ongoing and upcoming railway construction projects in multiple parts of the country.
“We currently have two factories that produce railway bearings, one in Bojonegara, Banten and the other in Cikopo, West Java,” said Antonius.
As of October, Wika Beton has received around Rp 4.36 trillion worth of new project orders. Among others, some of them include an agreement through which Wika Beton will supply tetrapod products worth around Rp 200 billion and ready-mix cement for a number of apartment projects worth more than Rp 200 billion.
“We are still waiting for a number of our clients to commit their projects under our helm. However, I can’t share the investment values yet,” said Antonius.
As of the end of 2019, Wika Beton expects to secure total contracts of Rp 14.5 trillion, including the contracts carried over from the previous year.
The company, a subsidiary of state-owned construction firm Wijaya Karya (Wika), has 14 facilities and a mobile plant, including in South Lampung, Subang and Bogor in West Java as well as Boyolali, Central Java. It also has three “crushing” plants in Cigudeg, South Lampung and Donggala, Central Sulawesi, to provide supplies of various rocks for buildings and other construction projects.
The company operates in concrete manufacturing, quarry and services, with the first being its main business through the production of precast and ready-mix concrete.
It has three subsidiaries, namely Wijaya Karya Komponen Beton (Wika Kobe), Wijaya Karya Krakatau Beton, Wijaya Karya Citra Lautan Teduh and an affiliated company, Wijaya Karya Pracetak Gedung. (bry)
