State-owned construction firm, PT PP Tbk (IDX: PTPP) and a private nickel producer, PT Ceria Nugraha Indotama, collaborating to construct a ferro-nickel smelter project in Kolaka, Southeast Sulawesi - Photo by CNI Office

JAKARTA (TheInsiderStories) – State-owned construction firm, PT PP Tbk (IDX: PTPP) and a private nickel producer, PT Ceria Nugraha Indotama (CNI), collaborating to construct a ferro-nickel smelter project in Kolaka, Southeast Sulawesi. The projects is estimating need an investment of Rp3.22 trillion (US$228.37 million).

The issuer has plans to develop the phase 2 worth of Rp1.01 trillion within 26 months and for phase 4 amounting to Rp2.21 trillion with term 34 months. According to CNI’ president director, Derian Sakmiwata, the cooperation of the two parties was in order to accelerate the infrastructure of CNI’ ferronickel smelter.

He revealed that currently the CNI smelter is being prepared as a National Strategic Project launched by the government. While, PTPP‘ CEO, Novel Arsyad, said the constructor has trusted to work on Phase 1 together with China ENFI Engineering Corporation as the engineering design. The plant has a total capacity of 4×72 MVA and targeting to operate in 2021. The production is projected to reach 229,000 tons of ferronickel annually.

Currently, the issuer has announced to raised Rp421 billion from the divestment of its two toll road assets to boost its liquidity. The issuer aimed to divests its 14 percent ownership in the PT Citra Karya Jabar toll road concession 25 percent shares in PT Prima Multi Terminal.

PTPP is in the process to divest at least four toll roads to a number of strategic investors with a target fund up to Rp1.6 trillion by the end of this year. The divestment include the Pandaan – Malang (15 percent) and Medan – Kuala Namu – Tebing Tinggi Toll Road (35 percent).

Arsyad said that the divestment are part of the company‘ strategy to get a new contract worth of Rp25 trillion in 2020. He explained, the buyers of the toll road assets came from several domestic investors, who were considered big players.

Until July, he added, PTPP has pocketed new contracts of Rp10.05 trillion, which are around 45 percent from state-owned enterprises, 31 percent from the government, and the rest from private sectors. The company is targeting to raises a new contracts of Rp25.5 trillion in this year.

According to Arsjad, there were several projects in the company’ pipeline such as energy, infrastructure and buildings projects. 58 percent of its projects majority are new contracts will come from construction sectors and the second largest contributor to the engineering procurement and construction business line.

This year, PTPP ready to spends Rp7.5 trillion of capital expenditure, derived from retained earning, dividends from the subsidiaries, bank loans, divestment, bond and equity. This year, the company claimed that it will be hassle to achieve double digit growth for revenue and net profit.

Then recurring income assets are derived from water supply system projects in Bekasi in West Java and Tangerang. The developer also wants to strengthen recurring income’ businesses from toll and renewable energy, like biomass energy project for East Indonesia.

Currently, PTPP managed several projects such as two steam power plants in East Nusa Tenggara and North Sulawesi with total costs Rp8 trillion. The capacity of each steam power plant is 2×50 megawatts (MW). The first steam power plant was carried out on an area of 30 hectares in West Kupang, East Nusa Tenggara.

The second steam power plant was built on 32 hectares of land in the Bolaang Mongondow, North Sulawesi. The construction firm was optimistic to complete the first projects in West Kupang in three years time and in Bolaang Mongondow in 39 months.

Its also expected the two steam power plants will be ready to operate in 2022, so it will be able to electrify several villages and sub-districts in the East Nusa Tenggara and North Sulawesi regions. PTPP  also eyes construction projects in the Philippines and port development project in Malaysia worth of Rp2 trillion, after getting the project in Vietnam with worth of Rp500 billion.

While, CNI is a mining company that was founded on March 18, 1991 in Ujung Pandang, South Sulawesi. The miner is fully owned by Indonesian shareholders. In 2011, Ceria secured a mining area in the Lapaopao Block covering an area of 6785 hectares through winning over an auction held by the government.

US$1: Rp14,100

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