Semen Indonesia to open new Vietnam cement plant in 2015
First publishedon www.AggBusiness.com
Semen Indonesia will next year to set up a new €219.6 million cement plant in Vietnam, according to the Jakarta Post. The new plant will serve the Vietnamese domestic market and export to Myanmar, Laos, Cambodia and Singapore. Construction of the new plant is said by the newspaper to be earmarked to begin in early 2015. It will produce 1.5 million tonnes/cement annually.
In a further development at Semen Indonesia, a state-run cement maker, the firm has also reportedly entered into an offtake deal with Thang Long Cement Company (TLCC), its unit in Vietnam, to help the latter refinance its debts worth €102.62 million. Under the deal, also reported in the Jakarta Post, Semen Indonesia will be absorbing the output of TLCC to boost the latter's financial position to restructure its debts. Agung Wiharto, corporate secretary of Semen Indonesia, is quoted as saying that TLCC is required to make a payment of €5.12 million in instalments every three months for five years to clear all its debts. He said the existing debts of TLCC would be due in five years. In order to restructure its debts, the Jakarta Post reports that TLCC will be required to export nearly quarter (24.35%) of its yearly production. If TLCC does not meet its quarterly export target, Semen Indonesia would reportedly buy and resell the products of the Vietnamese company. The Semen Indonesia-TLCC deal is said to be for a period of six years.