Indonesia cement giant acquires Vietnam firm
Indonesia's largest cement producer PT Semen Gresik has entered into a deal to acquire a majority stake in a cement producer in Vietnam and is considering a similar move in Myanmar as part of the company's regional cement market expansion plans.
Semen Gresik signed on Wednesday a conditional sale and purchase agreement for the acquisition of Thang Long Cement from one of the current shareholders, Hanoi General Export-Import Joint Stock Company (Geleximco).
“The planned transaction will depend on the fulfilment of requirements agreed by Semen Gresik and Geleximco. The transaction is expected to be closed this December,” Semen Gresik president director Dwi Soetjipto said after the agreement-signing ceremony. Soetjipto declined to reveal neither the size of the stake his company would take in Than Long Cement nor the value of the planned transaction.
“We will be a majority shareholder. That’s all I can say now,” Soetjipto said.
Thang Long Cement is one of the many cement companies operating in Vietnam and currently owns a cement plant in Quang Ninh province and a grinding station in Hiep Phuoc Industrial Park, Ho Chi Minh City. Thang Long Cement has a production capacity of 2.3 million tonnes of cement per year. Thang Long Cement also has secured two licenses to develop new factories in Quang Ninh province and Binh Phuoc province.
“We are very excited to begin cooperation with a prominent cement maker in Indonesia such as Semen Gresik. We will back two new cement plants to bring the total production capacity to 6.5 million tonnes per year in several years,” Geleximco chairman Vu Van Tien said. Semen Gresik said that it would finance the acquisition of Thang Long Cement with its internal cash and external funding.
Semen Gresik finance director Ahyanizzaman cited that the company was currently in an excellent financial condition with its cash flow recorded at 3 trillion rupiah (Bt9.56 billion). The company, he said, also still had standby loans amounting 1 trillion rupiah from Bank Mandiri.
In addition to its plans to acquire Thang Long Cement in Vietnam, Semen Gresik is seeking partners to enter the Myanmar market.
Soetjipto said Semen Gresik was in talks with two private companies in Myanmar about the possibility of establishing joint ventures. “Semen Gresik will be the majority shareholders.”
