Semen Padang gets $63m loan

JAKARTA (JP): Amsterdam-based ABN AMRO Bank N.V. agreed to provide a US$63 million export credit facility here yesterday to state-owned PT Semen Padang, a cement producer based in West Sumatra.

The five-year loan is backed by an export guarantee from the Danish export credit agency, Eksport Kredit Fonden.

Semen Padang's president Abubakar said yesterday the loan, with a fixed annual interest rate of 6.7 percent, would be used to buy machinery and equipment for the Indarung V plant, which was expected to be completed next April.

"We will import machinery from F.L. Smidth & Co. of Denmark, the world's largest producer of cement manufacturing equipment," Abubakar said after the loan contract was signed yesterday.

He said, the plant, which began in January last year, was estimated to cost US$285.2 million: US$138.2 million of this would be met by loans from local banks, $102 million from overseas financial institutions and US$45 million from Semen Padang's equity.

The plant is expected to produce up to 2.3 million tons of cement yearly, raising the company's annual production from 3.3 million tons to 5.6 million, he said.

"This will be in line with the growth of domestic demand for cement of between 12 percent and 15 percent yearly," he said.

By April, 58 percent of the plant's construction had been completed, 10 percent ahead of schedule, he said.

Semen Padang is owned by publicly listed Semen Gresik.

ABN AMRO's country manager, C.J. de Koning, said the loan was the largest export credit facility that ABN AMRO had given to an Indonesian company without a government or bank guarantee.

"We see Semen Padang as one of the best performing state-owned companies and one of the most profitable cement producers," he said.

He said the domestic cement industry had grown rapidly and its outlook was promising.

ABN AMRO had arranged about US$122 million of export credits for the domestic private and public sector, he said.

The bank arranged US$340.5 million of export credits domestically last year, and US$187 million in 1995, he said.

He said the bank expected to arrange export credit facilities and off-shore loans worth up to US$39 million to finance the import of goods from Germany and other European countries for the Indarung V plant. (das)