Cigarette maker, PT Gudang Garam Tbk (IDX: GGRM) plans to inject fresh capital of Rp1 trillion (US$69.93 million) to its subsidiary, PT Surya Dhoho Investama, to support the construction of Kediri Airport in East Java - Photo: Privacy

JAKARTA (TheInsiderStories) – Cigarette maker, PT Gudang Garam Tbk (IDX: GGRM) plans to inject fresh capital of Rp1 trillion (US$69.93 million) to its subsidiary, PT Surya Dhoho Investama, to support the construction of Dhoho Kediri Airport in East Java. The capital injection will be made in stages, starting March 3 until the end of 2021.

According to the spokesman, Heru Budiman, at the disclosure information released on Tuesday (03/02), the company owned by Tan Siok Tjien will purchase one million new shares of the unit. After the injection, Surya Dhoho capital will increase from Rp4 trillion to Rp8 trillion.

The company has appointed PT Lancarjaya Mandiri Abadi, a unit of constructor firm, PT PP Presisi Tbk (IDX: PPRE) as the main contractor for the airport projcect with total contract values of Rp1.9 trillion. Earlier, Gudang Garam and state-owned airport operator, PT Angkasa Pura (AP) I has signed a memorandum of understanding to operate Dhoho Kediri Airport.

The airport is one of the National Strategic Projects and become an alternative gateway of Surabaya’ Juanda Airport. In 2019, Juanda Airport served more than 16.6 million passengers with aircraft traffic reaching 129 thousand flight movements and cargo reaching 88.4 million kilograms.

“The development of Dhoho Kediri Airport is very potential because it can become an alternative flight after Juanda International Airport in East Java,” said the CEO of AP I, Faik Fahmi.

Surya Dhoho targeting to complete the first-phase construction by April 2022. According to the director, Istata Taswin Siddharta, the publicly listed tobacco producer will spend around Rp10 trillion for the project.

Kediri Airport, which would be the first-ever in the country to be fully funded by the private sector, will be developed in three phases under a public-private partnership scheme with a concession period of 30 to 50 years. The airport is to be built 13 kilometers and once completed, the airport will cover almost 400 hectares with potentially accommodating 1.5 million passengers per year.

The issuer 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 corn husk-wrapped clove cigarettes, hand-rolled clove cigarettes, up to machine-rolled clove cigarettes. Apart from developing the airport, Gudang Garam also working on toll roads through its subsidiary, PT Surya Kerta Agung.

US$1: Rp14,000

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