Publicly listed, PT Semen Indonesia Tbk (IDX: SMGR) has agreed to sold 15 percent shares of its unit, PT Solusi Bangun Indonesia Tbk (IDX: SMCB) to Taiheiyo Cement Corp - Photo by the Company

JAKARTA (TheInsiderStories) – Publicly listed, PT Semen Indonesia Tbk (IDX: SMGR) has agreed to sold 15 percent shares of its unit, PT Solusi Bangun Indonesia Tbk (IDX: SMCB) to Taiheiyo Cement Corp. The Japanese firm prepared an investment around US$220 million for the transaction.

Based on the public announcement released today (04/22), the parties has signed the “deal” on Tuesday. As planned, Taiheiyo will acquire SMCB shares by absorbing new shares through pre-emptive rights. Currently, Semen Indonesia hold 98.30 percent shares of SMCB.

Solusi Bangun‘ spokesman, Andika Lukman said, the definitive agreement will be set forth and further regulated in a definitive agreement that will be signed later. The two parties also agreed that the local cement producer would conduct an export activities of its production to Taheiyo.

In 2018, Semen Indonesia has acquired 80.6 percent of SMCB shares, formerly name as PT Holcim Indonesia Tbk. The state-owned cement producer bought the shares from Switzerland’ LafargeHolcim Ltd., for approximately $917 million. 

The assets has been sold to Indonesia include the entirety of Lafarge Zero operations in Indonesia, which consists of four cement plants, 33 ready-mix plants and 2 aggregate quarries.

For years, Solusi Bangun has suffered from overcapacity and price pressure, placing pressure on profit margins. Nevertheless, the long-term potential of the market and the company’ strong market position make this a significant and surprising move.

While for Semen Indonesia, strengthened its domestic footprint through the acquisition of the third largest cement company in the country, with four cement plants with capacity of 14.8 metric ton (MT) per annum capacity and 30 ready-mix plants.

Furthermore, it said, the acquisition will provide the producer with a significantly larger capacity and broader product portfolio and geographical footprint to fully capitalize on these tremendous growth opportunities in the domestic market.

The transaction will also strengthen cement industry resilience in Indonesia. Currently, there are 15 cement companies in Indonesia with total installed capacity if 107 metric tones per annum, whereby 63 percent capacity share is owned by private and
foreign players.

Solusi Bangun established in 1971 and has four cement plants located in Lhok Nga (Aceh), Cibinong (West Java), Cilacap (Central Java), and Tuban (East Java) and distribution terminals in Sumatera and Kalimantan. While, its holding, Semen Indonesia was established in 1957 in Gresik, Indonesia.

In 1995, Semen Indonesia consolidated with PT Semen Padang and PT Semen Tonasa and was known as Semen Gresik Group. The company become publicly listed on the Indonesia Stock Exchange since 1991. 51 percent of the shares are owned by the government and the remaining 49 percent.

The acquirer, Taiheiyo Cement established since 1881 and operates globally, focusing on cement, mineral resources, environmental, and international businesses. The company has nine production sites in Japan, three in the United States, three in China, one in Vietnam and Philippines.

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