Semen Indonesia Finalizing Plan to Expand Business in Bangladesh

Surabaya, East Java (Antara) - Cement producer PT Semen Indonesia is finalizing a plan to expand its business in Bangladesh in a bid to widen its regional market outreach in Asia. The company's President Director Ahyanizzaman informed newsmen on the sidelines of the presentation of scholarships from the company here on Tuesday that Bangladesh has indeed been one of the company's targets with regard to its expansion plan. "We are still evaluating the performance of Bangladeshi companies that we plan to cooperate with as a local partner. We are studying two or three companies," he claimed. Ahyanizzaman pointed out that the geographical conditions in Bangladesh are different from that of Myanmar, one of the countries in Southeast Asia that PT Semen Indonesia is now also evaluating for its business expansion. "Geographically, Bangladesh has no source of raw materials for producing cement, so we must buy them or build grinding mills with the raw materials coming from the Thang Long plant in Vietnam or Semen Padang in Indonesia, which are all also PT Semen Indonesia's subsidiaries," he noted. With regard to whether PT Semen Indonesia will be the majority or a minority shareholder, Ahyanizzaman said he was not in a position to ascertain it as studies are still ongoing. "It is unlike Myanmar, which has big investors, so PT Semen Indonesia could not become the majority shareholder if it wishes to acquire a company there. We hope that this year a decision can be taken with regard to the Bangladeshi expansion plan. It will however be done prudently," he added. In connection with the regional expansion plan, Ahyanizzaman stated that the company has allocated around 10 to 20 percent of its total annual capital expenditure at between Rp4 trillion to Rp6 trillion. "In the next five years, the funds for regional expansion are estimated to reach Rp1 trillion to Rp2 trillion. Myanmar and Bangladesh indeed have potentially huge prospects, especially Bangladesh that has so far still imported a lot of cement," he stressed. PT Semen Indonesia's expansion plan to countries in the Asian region is the follow up of the company's efforts to widen its market after acquiring 70 percent of the shares of Thang Long Cement in Vietnam worth US$157 million at the end of 2012. (*)