Semen Gresik enters franchising business
Semen Gresik enters franchising business
JAKARTA (JP): Publicly-listed PT Semen Gresik will enter a
cement "franchising" business with PT Semen Bintang Mandiri which
will build a cement plant in Tuban, East Java.
The new president of the state-controlled Semen Gresik, Urip
Timuryono, announced after attending the company's extraordinary
shareholder meeting yesterday that Bintang will invest in the
cement plant with an annual production capacity of 600,000 tons.
Semen Gresik will supply raw materials to Bintang's cement
plant, help market the products and give technical assistance,
Urip explained.
"By this method, we can expand our capacity without having to
increase our investment," Urip said.
Semen Gresik, he added, will get fees from Bintang Mandiri in
return for the latter's use of Semen Gresik trade marks,
technical assistance and marketing outlets."
Urip explained that the "franchising" contract between his
company and Bintang Mandiri will last for ten years and can be
extended for another ten years.
Bintang Mandiri will start building early next year and the
project is scheduled to be completed within 30 months.
"Bintang Mandiri has imported the machinery for the cement
plant," Urip added.
Urip, however, declined to mention the shareholders of
Bintang Mandiri and the amount if investment in the new project.
He only said that Bintang Mandiri was established by a group of
local "young" tycoons.
"I'm not yet authorized to explain this project in detail
because it is owned by Bintang Mandiri," Urip added.
Semen Gresik's extraordinary shareholders meeting yesterday
elected Urip as the new president of the cement company replacing
Anang Fuad Rivai who was appointed as the chief commissioner of
the state company.
Semen Gresik, listed on the Jakarta Stock Exchange in 1991,
was the first state-owned company to go public. Last year, it
recorded a net profit of Rp 54.7 billion (US$24 million), up 12.5
percent from 1993.
The company recently acquired two other state-owned cement
firms, PT Semen Padang and PT Semen Tonasa, to make it the second
largest cement producer in the country after PT Indocement
Tunggal Prakarsa.
After the completion of Semen Tonasa's new production unit
next year, Semen Gresik's total production capacity will increase
to 10.9 million tons a year, making it the country's largest
cement producer.
By 1998, Urip said, Semen Gresik's consolidated capacity will
expand to 17.8 million tons a year or 40.5 percent of the
country's total capacity of some 44 million tons per annum.
He estimated that Indonesia will enjoy a cement surplus of
three million tons a year starting in 1998, provided the annual
cement demand growth doesn't exceed 12 percent per annum. (rid)