Semen Indonesia increases Vietnam spend

Semen Indonesia has increased the amount it plans to spend on its next Vietnamese acquisition as it sets its sights on a higher-capacity purchase.

Speaking to the Jakarta Globe, president director Dwi Soetjipto said Semen Indonesia is looking to acquire a second Vietnamese producer with a production capacity of 2.5Mta involving an investment of IDR3trn (US$250m). Dwi added that this was an upward revision from the company’s earlier plan, which had allocated IDR1trn for the acquisition of a producer with a capacity of 1.5Mta.

The Jakarta-based company made its first move into the Vietnam early last year through the acquisition of a 70 per cent stake in Thang Long Cement which operates a 2.3Mta cement plant. Dwi noted that Semen Indonesia plans to hike Thang Long’s capacity to 4Mta which will be used to export to other Asian nations including Singapore, Cambodia, Laos, Myanmar, Sri Lanka and Bangladesh.

Dwi said part of the financing for Thang Long’s new plant is expected to be in the form of loans from Standard Chartered Bank, Sumitomo and Bank Mandiri, who are ready to jointly finance up to US$100m  in loans in total for Semen Indonesia.

On Wednesday, the company signed a memorandum of understanding with Stanchart, who acts as the arranger,” Semen Indonesia corporate secretary Agung Wiharto told Investor Daily earlier this week.