Medco gets $285m loan for cement project
Medco gets $285m loan for cement project
JAKARTA (JP): PT Semen Gombong, a subsidiary of the Medco
group, plans to borrow around US$285 million to build a cement
plant in Gombong, Central Java, chairman Arifin Panigoro said
here yesterday.
Mr Panigoro said two syndicates of local and foreign banks
would provide loans for the US$423 million plant.
Semen Gombong yesterday signed an agreement for Rp 334 billion
or around $US 135 million, of the total loan with a syndication
of five state-owned banks,including Bank Bumi Daya (BBD), Bank
Negara Indonesia (BNI), Bank Pembangunan Indonesia (Bapindo),
Bank Ekspor Impor Indonesia (Exim) and Bank Dagang Negara (BDN).
Mr Panigoro said the loan facilities had been arranged by BBD
and BNI.
Semen Gombong president Hitler Singawinata said the 8.5 year-
term loan carries an interest rate of 19 percent a year with a
four-year grace period.
The other $155 million loan would be in the form of export
credit facilities and is to be signed next month.
Hitler said the export credit facilities are to be provided by
a syndication of four foreign banks -- Bank Paribas Frankfurt,
Bayerische Vereinbank, Vereinsbank Hamburg and BMP.
Yesterday, Semen Gombong also signed an agreement with Bank
PDFCI for a $45 million standby letter of credit which was a
prerequisite to obtain the $155 million export credit facilities.
"Aside from the loans, the project will be financed with Rp
377 billion of equity or about 35 percent of the total project
value," Hitler said after the ceremony to sign the syndicated
loan and standby letter of credit.
Hitler said the Gombong cement factory was scheduled to
commence operations in 1999 with a capacity of 1.9 tons a year.
The factory is located in Gombong, Kebumen regency, which the
company claims is rich in limestone and clay deposits, the raw
materials for making cement.
Hitler said Medco had been granted a mining concession of over
800 hectares in Gombong with limestone and clay reserves of
around 390 million tons and 80.3 million tons.
Two hundred and seventy nine hectares of the concession zone
cannot be legally mined due to its status as protected forest
area.
"Still, the rest of our concession area has enough deposits
for our cement factory for 60 years," said Hitler.
A consortium consisting of Krupp Polysius AG, Dickerhoff and
Wydman AG and state-owned PT Rekayasa Industry will carry out
construction and design.
Krupp-Fordertechnick and Haver & Boecher have made essential
pieces of equipment including crushers and packers.
"The cement project is part of Medco's strategy to diversify
its business," said Arifin. The company currently focuses on oil-
related ventures.
Arifin said Semen Gombong had signed an agreement with state-
owned PT Semen Gresik to sell Semen Gombong's products under the
Semen Gresik brand for the first four years
"If we directly market our products with our own brands, it
might not sell," said Arifin.
Arifin said Medco will concentrate marketing efforts on the
south coast of Java, since the north coast of Java is controlled
by other cement producers. (jsk)