JAKARTA (TheInsiderStories) - Indonesian steel-maker, PT Gunung Raja Paksi Tbk (IDX: GGRP) prepared an investment funds around Rp6.8 trillion (US$482.26 million) to build new factory in three years time. Majority of the funds will be use for factory expansion like light session mill machine.
“We are quite optimistic that in the fourth quarter and 2021, the prediction of the Indonesian Iron and Steel Industry Association that steel consumption will return to 2019 can be fulfilled,” said the director, Budi Raharjo Legowo in an official statement on Friday (11/12).
Based on statistic bureau data, in the third quarter, the construction sector grew 5.72 percent after contraction 7.37 in the second quarter of this year. He added, steel consumption in Indonesia in 2019 was recorded at 15.9 million tons and in 2020, the consumption will decrease to only 11 million tones.
At present, the company is building a $370 million project and targeted to be completed in 2021. Legowo said, the construction of the second phase its expecting starting next year and start to operating in 2023.
Last year, Gunung Raja Paksi announced that it would build a steel plant with a Chinese company at a cost of around $693.3 million and the partnership is expected to be effective in this year. The construction of this new plant aims to meet the domestic needs and for export purposes.
At present, the manufacturer’ sales are dominated by the domestic market and the rest is for export markets. Some export destinations are the Philippines, Malaysia, Australia and the United States.
Last year, Gunung Raja Paksi has signed a memorandum of understanding with United States-based company, Hanwa American Corp., for the export of 50,000 million tons of steel bars. The steel producer based in Bekasi, West Java, is the first steel exporter in Indonesia.
Founded in late 2001, the company produces thin steel consisting of plates and coils. Currently the company’ steel production capacity is 2.86 million tons per year. The issuer produced steel sheets consisting of plates and coils.
In 2019, Gunung Raja Paksi listed on the Indonesia Stock Exchange last year. At that time, the company offered 1.23 billion shares and received fresh funds of Rp1.03 trillion. Majority of these funds are used to pay off debt in the context of the purchase of fixed assets and operating costs and for working capital.
This steel producer initially produces hot rolled steel then continues to one of the new product lines namely steel beams. In early 2000s and produced a variety of hot rolled steel and steel plates. The companu is a member of the Gunung Steel Group, one of the largest private steel companies in Indonesia.
Founded in 1970 in Medan, North Sumatra, the company started its business by producing hot steel, gradually producing steel beams and sheets. In 1991, PT Gunung Naga Mas changed its name to Gunung Raja Paksi. Their factory is located in Cikarang Barat, West Java Province, covering an area of more than 200 hectares.
Recently, the government has sought to increase the competitiveness and market share of Indonesia’ steel exports and to seek non-traditional markets such as Africa, South Asia, the Middle East, Eurasia and Latin America through negotiations and the initiation of free trade agreements.
US$1: Rp14,300
Written by Editorial Staff, Email: theinsiderstories@gmail.com
