JAKARTA (TheInsiderStories) – Cement manufacturer, PT Solusi Bangun Indonesia Tbk (IDX: SMCB) will offered 1.38 billion new shares in the third quarter of 2021 with targeting proceeds more than US$200 million, said the management on Tuesday (03/30). The issuer also prepared capital expenditure Rp500 billion ($34.72 million) in this year.
The cement producer also planned to distributed dividend Rp195.2 billion or equal to 30 percent of 2020′ net profit. President director of the company, Aulia Mulki Oemar, said this corporate action is part of the continuation of the partnership agreement between the parent, PT Semen Indonesia Tbk (IDX: SMGR), with a Japanese investor, Taiheiyo Cement Corporation in early January 2021.
The new partner will acquire Solusi Bangun shares through a private placement scheme worth of $220 million. The rights issue is planned to take place in July 2021. Solusi Bangun also has signed an cement sale and purchase agreement between the company and Taiheiyo.
President and representative director of Taiheiyo, Masafumi Fushihara, has announced the purchase price is set at Rp2,300 a share. After the acquisition the ownerships of Semen Industri Bangun in the unit will decreased from 98.31 percent to 83.31 percent and public 1.69 percent.
In this year, explained Oemar, Solusi Bangun targeting the sales volume around 4.5 – 5.5 percent) and export targets of more than 1.5 million tones destined for Australia, Bangladesh, the Philippines and China. Most of the investment funds, he continued, will allocated to strengthen the cement logistics infrastructure.
For background, on Jan. 31, 2019, Semen Indonesia had purchased 80.64 percent of PT Holcim Indonesia Tbk shares owned by Holderfin B.V., The Netherlands with an acquisition value of $916,93 million. The assets has been sold to the state-owned cement producer include the entirety of Switzerland’ LafargeHolcim Ltd., operations in Indonesia, which consists of four cement plants, 33 ready-mix plants and 2 aggregate quarries.
For years, the company 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 tones (MT) of cement per annum and 30 ready-mix plants. 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.