Japanese cement firm to spend $220 million for 15 percent of Semen Indonesia subsidiary. Japanese cement producer Taiheiyo Cement Corporation has announced its interest in buying a stake in a subsidiary of state-controlled cement producer PT Semen Indonesia to establish a strategic partnership.
Taiheiyo signed a memorandum of understanding (MoU) with the subsidiary, publicly-listed PT Solusi Bangun Indonesia (SBI), on April 21, sealing its intention to invest US$220 million for a 15 percent stake through a rights issue, SBI wrote in a statement.
The investment would forge a strategic partnership that would include SBI exporting products to Japan through Taiheiyo, as well as research, development and technology on cement production, SBI’s Indonesia Stock Exchange (IDX) disclosure document reads.
“The implementation of the partnership would be regulated in a definitive agreement that would be signed in the future,” the document says.
In a separate statement obtained by The Jakarta Post on Thursday, Taiheiyo said the alliance with Semen Indonesia and SBI was also aimed at a long-term boost to business, as cement demand in Japan may decline due to the aging population.
“Although we believe cement demand will remain at a certain level in the medium term due to infrastructure renewal and disaster prevention and mitigation, we expect demand will decline in the long run caused by a declining birth rate and aging population,” Taiheiyo wrote.
The Japanese cement producer also believes that demand in the emerging market will expand in the future due to economic growth.
“We expect infrastructure demand will increase due to rapid urbanization,” Taiheiyo said, adding that it was also committed to maintaining sustainability along with the expansion.
As of 1 p.m. on Friday, Semen Indonesia’s share price was down 3.62 percent at Rp6,650 (43 US cents) per share. Meanwhile, SBI’s share price—listed under the ticker code SMCB on the IDX—was up 13.08 percent at Rp1,470 apiece. Japanese cement firm to spend $220 million for 15 percent of Semen Indonesia subsidiary (Riska Rahman, The Jakarta Post) Booming Indonesian Business Indonesia Online Expo