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View all search resultsSemen Indonesia secures $220m investment from Japan
State-owned cement producer PT Semen Indonesia has reached a US$220 million deal to establish a strategic partnership.
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S
tate-owned PT Semen Indonesia, the country’s biggest cement producer, has reached a multimillion dollar deal to establish a strategic partnership in expanding its market reach worldwide.
Under the deal, Japanese cement producer Taiheiyo Cement Corporation is to invest US$220 million for a 15.04 percent stake in Semen Indonesia subsidiary, publicly listed PT Solusi Bangun Indonesia (SBI), through a rights issue.
Semen Indonesia finance director Fadjar Judisiawan said the investment and partnership would help the company develop its products and expand its market reach to Africa, Australia and China.
“We are exploring opportunities in other countries,” he said at a press briefing on Wednesday as reported by Kontan.co.id.
In the initial stage of the partnership, Taiheiyo and Semen Indonesia will export roughly 500,000 tons of cement to the United States per year. The latter company expects to eventually raise export volumes up to 1 million tons a year.
The strategic partnership comes as Taiheiyo seeks to enter emerging markets as it expects infrastructure development and rapid urbanization in such markets to boost long-term cement demand.
Semen Indonesia and Taiheiyo signed a memorandum of understanding on the partnership on Apr. 21 last year.
Semen Indonesia president director Hendi Prio Santoso said that the cooperation would increase the company’s capability in competing with the global cement industry.
“This [partnership] will strengthen Semen Indonesia’s position as the largest regional company in building material provision,” he said in a statement.
Taiheiyo will receive 1.35 billion new shares in SBI parent company Semen Indonesia via the rights issue, which has been approved by the Financial Services Authority (OJK).
Read also: Japanese cement firm to spend $220 million for 15% of Semen Indonesia Subsidiary
“This strategic partnership is expected to set an example for other SOEs and business owners to grow and compete at the global level,” said State-Owned Enterprises (SOEs) Minister Erick Thohir, also on Wednesday.
Semen Indonesia’s revenue rose 1.2 percent year-on-year (yoy) to Rp 16.21 trillion (US$1.13 billion) in the first half of this year led by higher exports, the company’s latest financial report shows.
The higher revenue led to a Rp 788.92 billion profit booked in the first half of 2021, rising 30.16 percent yoy. Meanwhile, production costs rose 3.66 percent yoy to Rp 11.62 trillion in the first half.
