An Asian adventure
In 2001, HeidelbergCement Group became a major shareholder in PT Indocement Tunggal Prakarsa Tbk, the second-largest cement producer in Indonesia, in a deal worth over US$1bn. At the time, Indonesia was recovering from the 1997 Asian Financial Crisis, as a result of which GDP growth had collapsed, significant political strife was destabilising the country and cement demand had fallen by 30 per cent. In short, the deal was a calculated bet on the future of Indonesia. It proved well timed, with Indocement now one of the most important business units in the entire HeidelbergCement Group. ICR met up with Daniel Lavalle, president director of Indocement and the man entrusted with steering the company through the last decade and a half.
Daniel Lavalle, President Director of
PT Indocement Tunggal Prakarsa Tbk and
CEO of Southeast Asia for HeidelbergCement Group (Germany)
PT Indocement Tunggal Prakarsa Tbk was first incorporated in 1985 following the merger of six companies, thereby forming the second-largest cement group in Indonesia. In 2001, HeidelbergCement, which had embarked upon an ambitious Asian expansion programme, sealed a deal to acquire a 61.5 per cent majority shareholding in Indocement from the private Salim Group and Government of Indonesia, thereby providing the German major access to the fourth-largest population on earth and one of the most- promising growth markets. There was, however, a catch. Indonesia was only just emerging from the Asian Financial Crisis and the acquisition brought with it a debt mountain of EUR950m.
