State-owned enterprise publicly listed firm PT Semen Gresik Tbk is now holding a beauty contest to select the best advisor helping it to expand business into Malaysia and Thailand.
The top three of foreign investment banks, Credit Suisse, JP Morgan, and Merrill Lynch, are in the short listed of the process.
A dream of Semen Gresik, the biggest cement producer in Indonesia, becoming a regional player revealed when Rajawali Group, a local conglomerate owned by tycoon Peter Sondakh, enrolled the cement firm by acquiring of 24.90% of shares from Cemex SA. I still remember when one of Semen Gresik's executive Darjoto S. explained about the dream. But, so far the dream remains difficult to be achieved.
In fact, Semen Gresik also plans to expand locally with its huge agenda. The company set up capex of US$1.25 billion or Rp13.75 trillion in 2008-2014 to underpin the agenda. Two coal-fired power plants with a capacity of 70 MW will be the next.
How about regional expansion? Remains unclear I think.
So far, Semen Gresik has planned to hold an extraordinary general meeting at the end of this month to suport its local expansion. Last year, the company recorded 18.2 million ton of production volume and 18 million ton of sales volume.
But, I hear from my source a side from its domestic plan to jack up production capacity, the cement producer is looking to buy a cement maker in Malaysia. The target is state-owned cement producer called Cement Industries of Malaysia Berhad (CIMA).
How about the funding?
Semen Gresik is one of the cash rich state-owned companies. As of September last year, the firm booked cash of Rp3.3 trillion. A consortium of lenders lead by PT Bank Mandiri Tbk has commited to provide Rp6.3 trillion of loan. So, no doubt about its ability to buy CIMA.
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