Tubemakers expands in Indonesia and New Zealand
Tubemakers expands in Indonesia and New Zealand
SYDNEY (Reuter): Tubemakers of Australia Ltd is progressing with its overseas growth plans through a joint-venture in Indonesia and an acquisition in New Zealand, the company said yesterday.
Tubemakers said the expansion moves demonstrated the company's commitment to delivering 15 percent growth in shareholder value in future years.
It also reiterated its advice to shareholders not to accept the Broken Hill Pty Co Ltd's A$4.05 a share takeover bid.
Tubemakers announced the formation of a joint-venture with Indonesia's leading steel pipe maker PT Bakrie & Brothers in a sheet and coil service center in Jakarta, with Tubemakers to hold 60 percent and the Indonesian concern 40 percent.
The venture would capitalize on Tubemakers' expertise in processing and distribution of sheet and coil, Tubemakers said.
The joint-venture agreement is expected to be signed later this month with production starting in the first quarter of 1997, it said.
The partners will inject A$30 million into the venture in its first year, covering land, building, plant, equipment and inventory costs, Tubemakers managing director Robery Every said.
The project was expected to produce total revenue of about A$130 million a year by year five, Every told Reuters.
Tubemakers also announced that its 50.4 percent-owned New Zealand subsidiary Steel & Tube Holdings Ltd had launched a cash offer for New Zealand's Southern Cross Engineering Holdings Ltd, an unlisted public company. The cash consideration was between A$5 million and A$10 million, he said.
The expansion moves, which will take Tubemakers back into the Indonesian market after an absence of more than 10 years, would be the first in a series, Every said.
Similar expansion moves were planned for Malaysia and Thailand, with discussions now progressing on the Malaysian deal, he said. A go-ahead for the Malaysian venture could be expected in about six months, he said.
Tubemakers, a large heavy engineering group, operated in Indonesia in the 1970s but withdrew in the 1980s. The climate had changed dramatically between then and now, Every said.