Curug Luhur to build 2 stainless steel plants
Curug Luhur to build 2 stainless steel plants
JAKARTA (JP): PT Curug Luhur Indah Paradise of Indonesia
signed Saturday an agreement with the Tashkent Group of Germany
to develop two stainless steel plants.
The project's coordinator, Alex H. Sumarauw, said the two
parties agreed to take the initiative to establish a joint
venture company, to be named PT Indonesia-Germany Stainless
Steel, to build two steel plants.
"Our plants will produce the thinnest stainless steel in Asia
with a thickness of 0.15 millimeters to 3 millimeters," Alex
said.
The first plant will be built in Samarinda, East Kalimantan
and the second, to be built three years later, will be in Timika,
Irian Jaya.
The first plant will have a production capacity of 200,000
metric tons per year and is scheduled to be operational within 30
months.
The company plans to export at least 90 percent of its product
to Asian countries.
"The new steel building products will be a valuable
contribution to increase Indonesia's foreign exchange flow," Alex
said.
Alex said the company had secured loan commitments of some
US$1 billion from the International Resource Investment Trust and
a syndication of 40 banks.
Of the total, the company will use $100 million for pre-
operational costs, $400 million for the construction of the first
plant and $500 million for the second plant.
The loan will mature in 10 years.
The company plans to pay off its loan from its export revenue
and from its futures offering through New York's over-the-counter
NASDAQ stock exchange.
Alex said PT Curug Luhur would act as the leader for
Indonesian participating companies in the venture with the German
group.
Indonesian participating companies are PT Mitara Investment
Corporation in Jakarta as project coordinator, PT Karya Kaltim
Persada in Samarinda as land provider, PT Curug Luhur as arranger
and a commercial bank as underwriter.
Alex said all of the venture company's capital would come from
the Tashkent Group, while the Indonesian side would provide
government licenses, land, site facilities and banking services
support.
Alex said the Indonesian party would have a 72 percent stake
in the joint venture.
"We hope to eventually increase our share to 95 percent in 10
years," he said.
The company expects to reach profits of 80 percent to 120
percent due to having lower production costs than companies in
other steel producing countries.
Yesterday's agreement was signed by Curug Luhur's president
Mounir Bouslama representing Indonesian participating companies,
and Hong Kong's Bullet Train and Town Development Co. Ltd.
president Chow Wan King, representing the Tashkent Group.
PT Curug Luhur, a resort contractor, currently manages a
resort in Curug, West Java. (08)