SG to propose less than 40% dividend

State-owned PT Semen Gresik, the nation's largest cement maker, plans to allocate less than 40 percent of its 2004 net profit for dividend payments as the company will need extra funds to finance the construction of its new plants.

"The dividend payment of below 40 percent will be proposed at the upcoming annual shareholder meeting on June 27," said Satriyo as reported by Antara at the Office of the State Minister for State Enterprises on Friday.

Last year, Semen Gresik posted a net profit of Rp 520.5 billion (US$55.3 million), up from Rp 372.5 billion in 2003.

Satriyo explained the company needed to immediately construct new plants in order to anticipate cement shortages projected for 2007, due to high demand from government-driven infrastructure projects.

The new plants, which are estimated to cost the company about $350 million, will be constructed either in Sukabumi, West Java, or near Pacitan, East Java, with an installed capacity of between 2.5 million and three million tons per year.

About 70 percent of the funding for the plants will be derived from bond issues or export credits, with the remaining 30 percent coming from the company's internal cash.

Satriyo said that aside from discussing dividend payments, the upcoming shareholder meeting will also discuss the reorganization of the company's board of directors and commissioners. -- JP