The nation’s largest cement producer, PT Semen Gresik, says its planned expansion into Vietnam and Myanmar can be realised by the year end.
Semen Gresik president director Dwi Soetjipto said that expansion into the fellow Asean member nations would need $400 million to $500 million.
“We will need about $150 million to set up a factory for Myanmar,” Dwi said after the company’s annual and extraordinary meeting of shareholders on Tuesday.
According to Dwi, Semen Gresik has been assessing potential local partners for a joint venture for a plant in Myanmar to produce around 600,000 tonnes of cement a year.
Dwi declined to discuss Vietnamese expansion plans in detail, hinting at an acquisition.
“We are now bound by a non-disclosure agreement. We hope to come up with decision whether to continue or cancel by the year end,” Dwi said.
Semen Gresik intends to finance 20 percent of the expansion with internal cash and the remainder with external sources, possibly from a global bonds issue.
Dwi said that if negotiations concluded by year end, Semen Gresik would likely issue bonds in 2013. Finance director Ahyanizzaman said that Semen Gresik was reviewing alternatives.
The company reported total assets of Rp 21.42 trillion (US$2.25 billion) at the end of March, with liabilities of Rp 5.79 trillion and equity of Rp 15.63 trillion. Semen Gresik’s cash and cash equivalents were reported at Rp 3.93 trillion at the end of the first quarter.
Semen Gresik, according to Dwi, expected to book a 15 percent revenue increase in 2012, or about Rp 18 trillion, as the company reported revenues of Rp 16.38 trillion last year, and expected strong growth from increased capacity following completion of two cement plants, Tuban IV and Tonasa V.
Dwi said that Semen Gresik targeted to sell 22.5 million tonnes of cement this year, up from last year’s 19.72 million tonnes.
The company reported Rp 4.28 trillion in revenues during the first quarter of 2012, up 20 percent increase from Rp 3.55 trillion during the same period last year, while sales topped 4.94 million tonnes, increasing 14.9 percent over 4.3 million tonnes.
Dwi said that Semen Gresik would likely grab a 40 to 41 percent share of national cement market in the first half of the year.
The company’s market share was 39.3 percent in the first quarter.
During the shareholders meeting on Tuesday, Semen Gresik was approved to disburse Rp 1.96 trillion in dividends, equivalent to 50 percent of the firm’s net profit of Rp 3.93 trillion in 2011.