After Build Airport, Now Indonesia’s Gudang Garam Set Up Construction Business

PT Gudang Garam Tbk (IDX: GGRM) established a construction company PT Surya Kerta Agung (SKA) - Photo by the Company

JAKARTA (TheInsiderStories) – After build Kediri Airport, PT Gudang Garam Tbk (IDX: GGRM) announced has established a construction company PT Surya Kerta Agung (SKA), said the spokesman today (07/29). The cigarette maker together with PT Suryaduta Investama injected capital of Rp200 billion (US$14.29 million) at the new unit.

According to the Corporate Secretary Heru Budiman, in a disclosure information to Indonesia Stock Exchange, Gudang Garam has 99,999 shares or equivalent to Rp99.99 billion, while Suryaduta Investama owns 1 share. SKA engaged in the development, upgrading, maintenance and repair of roads, highways and toll roads, bridges and overpasses.

No further details what the company plan by established SKA. But previously, Gudang Garam has prepared funds around Rp10 trillion to construct the Kediri Airport in East Java. The project is part of the country’ National Strategic Project with the public private partnerships scheme.

Airport in Kediri has been built end of 2018 and by 2019 will start operating. Based on Gudang Garam report, the airport runway has length 3,200 meters. State-owned airport operator PT Angkasa Pura II will help the tobacco producers to design and manage the airport.

Director of Gudang Garam, Istata Taswin Siddharta, said the company will remain focused on tobacco business. The director also ensure that the airport construction is not a diversification of its new business.

Currently the company owned air transport business, namely Surya Air. He urged, its also possibilities in the future to synergized the airport with Surya Air.

Last year, Japan Tobacco Inc. (TSE: 2194) or JT Group has agreed to acquire Gudang Garam subsidiary, PT Karyadibya Mahardhika (KDM) and its distributor PT Surya Mustika Nusantara (SMN) for $1 billion, including take over KDM’ debt of $323 million. JT Group also expect to completed the transaction in the fourth quarter of this year.

Until the first quarter of 2019, the producer became the only cigarette issuer that posted double-digit revenue growth, which was 19.18 percent on an annual basis. Total revenues worth of Rp26.2 trillion, surpassing the income of its competitor PT HM Sampoerna Tbk (IDX: HMSP) worth of Rp23.81 trillion. The total profit bagged by GGRM also increased 24.48 percent on an annual basis to Rp2.35 trillion.

Gudang Garam is one of the leading companies within the cigarette industry in Indonesia that has been established since 1958 in the town of Kedir. Until now, the company has widely known both domestically and abroad as a producer of high quality kretek clove cigarettes.

Gudang Garam products can be found in many varieties, ranging from SKL (sigaret kretek klobot or corn husk-wrapped clove cigarettes), SKT (sigaret kretek linting tangan or hand-rolled clove cigarettes, up to SKM (sigaret kretek linting mesin or machine-rolled clove cigarettes).

US$1: Rp14,000

Written by Staff Editor, Email: theinsiderstories@gmail.com