Sat, 06 Mar 1999

Semen Gresik to sign agreement with Cemex

JAKARTA (JP): Shareholders of publicly-listed cement producer, PT Semen Gresik, gave approval on Friday to the company's proposal to sign technical aid and export cooperation agreements with its minority shareholder Mexico's Cemex S.A. de C.V.

Semen Gresik president Urip Timuryono said the agreement would enable it to export a minimum of 1.5 million tons of cement a year to Cemex, which would then reexport it to countries in Europe, Africa and North America, other than Gresik's regular market, he said.

"Cemex will sell our cement at the market price, and benefit from the price differences," Urip told reporters after the company's general shareholders meeting.

Cemex would also provide five years technical assistance in the areas of production, logistics, finance, marketing, human resources and information systems.

Cemex currently owns 20 percent of Semen Gresik, the government has a 45 percent stake, and the remaining 35 percent is owned by the public.

Last year, Cemex bought a 14 percent stake in Semen Gresik from the government and another 6 percent from the public through a tender offer.

Semen Gresik is the first of the state-owned firms sold to strategic investors since the government's privatization program began last year.

Urip said Cemex would have to buy another 5 percent stake in Semen Gresik through a tender offer before September in order to retain its seats on Gresik's board of directors and commissioners.

Urip then reported that Semen Gresik sold 8.53 million tons of cement on the domestic market last year, and exported 1.75 million tons to Australia, Singapore, Papua New Guinea, the Maldives, Bangladesh, Myanmar, Vietnam, Sri Lanka, Yemen, South Africa, Nigeria, Egypt Chile, Dubai and Mauritius.

Urip said he expected the sales volume would remain at the same level as last year due to an anticipated zero growth in the country's economy this year. (das)