Insider Stories - PT Grand Kartech Tbk, an engineering and manufacturing company, plans to build two manufacturing plants in two cities, which will involve investment of Rp 200 billion ($17.6 million), its chief said on Friday.

Kenneth Sutardja, the president director at Grand Kartech, a newly listed company, said the factories will be situated in Balikpapan, East Kalimantan and Surabaya, East Java.

"One will cost Rp 70 billion and another Rp 100 billion," Kenneth said on the sideline of the company's debut trading on Friday.

He said Balikpapan is a strategic location as the city is a basis for some of the company's customers, especially companies in oil and gas and miners.

Meanwhile, Surabaya is also home to manufacturing companies. "We hope to begin construction by end of 2014 or early 2015," said Johannes.

Grand Kartech produces a number of boiler products, including coal boilers, packaged boilers and biomass boilers.

It also manufactures oil and gas processing equipments as well as electricity generators. On services side, Grand Kartech also offers after sales services for steam generators, piping, and others.

Currently, the company operates three manufacturing plants i Pulogadung, East Jakarta and Karawang, West Java. These plants have production capacity of 300 tons per month.

The company is expanding its Karawang plant to boost production capacity by 50-100 percent in the next two years.

Grand Kartech was officially the 27th listed company at the Indonesia Stock Exchange this year.

During its debut trading, its shares soared to 400 per share, up 45.4 percent from the initial public offering price at Rp 275.

Grand Kartech sold 163.6 million shares out of the company's total 970 million shares. The proceed from the IPO was Rp 45 billion, of which more than half (51.6 percent) will be usd to help finance the Karawang plant expansion; 43 percent to buy new machineries and 5 percent to add operational vehicles.

Kenneth was upbeat of the company's business, saying that its products have seen stronger demand not only from energy, oil and gas sector, but also from automotive.

"The economic fluctuation also did not affect much of our business, as our business has a characteristics of long-term value," he said.
In January-September, Grand Kartech's net income rose 45 percent year-on-year to Rp 2 billion.