Corporate News in Brief -July 2011

NALCO'S ALUMINUM SMELTER PROJECT CLOSER TO IMPLEMENTATION. India's National Aluminium Company Limited (Nalco) is closer to implementing a US$4 billion project in Kutai Timur, East Kallimantan Nalco's executive director PK Mohapatra has signed a memorandum of understanding with East Kalimantan governor Awang Faroek Ishak. Under the agreement, Nalco will build an aluminum smelter with a capacity of 500,000 tons with a supporting facility a 1,250 megawatt coal-fired power plant in Kutai Timur. The factory alumina requirement of 800,000 tons up to 1 million tons a year will still be supplied by Nalco from India. The industry ministry said Nalco is expected to utilize bauxite reserves found in abundance in West Kalimantan to produce alumina to feed the smelter. The project will be built by Nalco in cooperation with Dubai-based MEC Holdings' to be completed in 2015. Nalco operates in Indonesia through its subsidiary Nalco International. MEC is a subsidiary of Trimex Group, a mineral resources company based in the United Arab Emirates. The project was planned in preparation for the government's decision banning exports of raw minerals in 2014. Nalco has been investing heavily in Indonesia over recent years. The Indian state-owned company said it invested as much as US$ 3 billion to build a power plant and aluminum smelter in South Sumatra The South Sumatra project, which started operations in 2006, can produce as much as 500,000 tons of aluminum wire each year.

HYUNDAI MOBIL INDONESIA SET TO POST 75% RISE IN SALES. PT Hyundai Mobil Indonesia (HMI) hopes to chalk up a 75% increase in sales of its cars to 7,000 units this year from 4,000 units in 2010. Mukiat Sutikno, the vice president of PT HMI, said in order to reach the target the company will boost sales of its products including Hyundai i20, Grand Avega, Hyundai i10 facelift, Hyundai New Tucson limited edition, Hyundai H1 XG and Hyundai Sonata wih market targets consumers with purchasing power of Rp 100 million to Rp 200 million or higher. Sales of premium sedan car New Sonata are expected to reach 30 units per month.

ISUZU READY TO LAUNCH EXPANSION WORTH US$ 14.76 MILLION. PT Isuzu Astra Motor Indonesia plans to invest US$ 14.76 million to expand its dealer chain and to produce more commercial car variants. Most or US$ 11.76 million of the fund will be used for the expansion of dealer chain and the rest for the production of more variants of commercial cars GIGA medium sized trucks in five models and 10 variants. The plan will be implemented in 2012. PT Isuzu Astra Motor Indonesia (IAMI) marketing director Supranoto Tirtodiprodjo said the company wills buold more sales outlets to increase the number to 170 units from 86 units at present.

LAFARGE PLANS TO BUILD NEW CEMENT FACTORY IN NORTH SUMATRA. PT Lafarge Cement Indonesia, a local unit of the world cement giant Lafarge plans to build a cement factory in Langkat , North Sumatra with a capacity of 1.5 million tons a year. The French company, which already has a cement factory PT Semen Andalas in Aceh, will invest up to Rp 5 trillion (US$ 585 million) in the project, industry minister MS. Hidayat said. Lafarge is currently conducting feasibility study on the project, Hidayat said. Lafarge acquired PT Semen Andalas in 1994, but the factory was destroyed by tsunami in December 2004. Lafarge then built a replacement that came on line early this year in Lho Ngah in Aceh. The replacement factory with a production capacity of 1.6 million tons a year was built at a cost of US$ 300 million Andalas supplies cement for the nothern regions of Sumatra

SUZUKI MOTOR TO INVEST US$ 800 MILLION FOR CAPACITY EXPANSION. Suzuki Motor Corp. said it will invest up to US$800 million to expand the production capacity of its car and motorcycle factories in Indonesia Suzuki will also increase the local content of the products of its local unit PT Indomobil Sukses International, its chairman Osamu Suzuki said in a meeting with industry minister M.S. Hidayat here. Indomobil's production capacity and local content of its products will be increased by phases, Osamum said after the meeting. Indomobil's chief commissioner Gunadi Sindhuwinata said the capacity expansion would be aimed at producing low cost eco cars. Gunadi said the concept of low cost eco car development has been prepared by the principal Suzuki Motor. Realization of the program , however, will depend on the government policy in developing low cost eco cars, he said.

KRAKATAU STEEL TO TEAM UP WITH MCC TO BUILD IRON PLANT. State steel maker PT Krakatau Steel (KS) will team up with Metallurgical Corporation of China Ltd (MCC) CERI to build an iron plant with a blast furnace. The project to cost Rp 5.92 trillion (US$697 million) will have an annual production capacity of 1.5 million tons, said Andi Soko Setiabudi, a deputy director of the country's largest steel maker. KS and the Chinese construction company, have signed the contract to build the project, Andi said. KS will seek a loan of around Rp 5 trillion from Chinese banks to finance the project, he said, adding the remaining fund for the cost will be put up by the company. Meanwhile, the US$ 6 billion project between KS and South Korea's Posco is still in the phase of preparing the land for the integrated steel plant in Cilegon, Banten. The land preparation alone has cost Rp 600 billion, KS president Fazwar Bujang said, adding civil work will start early next year. The first phase of construction of the factory will begin only in 2013 .

ADARO ACQUIRES COAL MINER AT US$ 222.5 MILLION. PT Alam Tri Abadi, a subsidiary of PT Adaro Energy Tbk, has agreed to pay US$ 222.5 million for 75% stake owned by Elite Rich Investment Limited in PT Mustika Indah Permai. PT Mustika Indah Permai is developing a coal mine in South Sumatra. In addition, Mustika Indah Permai is a holder of mining license effective for 20 years over a 2,000 hectare concession. Adaro president Garibaldi Thohir said the acquisition is part of the company's plan to expand its coal reserves in Indonesia. Mustika Permai is only one of the targets of its acquisition. Adaro Energy hopes to increase its coal production capacity to 80 million a year.

BRI ACQUIRES BRINGIN REMITTANCE. PT Bank Rakyat Indonesia has taken full control of BRIngin Remittance Company, Hong Kong-based firm offering remittance service. BRI finance director Achmad Baequni, the finance director of the country's second largest lender said the process of acquisition has been completed at a price of Rp 3 billion. The state bank took over BRIngin Remittance from Dana Pensiun BRI, hoping to expand remittance market in Hong Kong. BRI plans to inject more capital into the firm to allow it to open branches . Achmad Baequni said BRI will expand networks abroad linked to the computer networks of BRI and the remittance firm . BRI will also send workers to work in its remittance firms in Malaysia and middle East to help expand the networks.

INTRACO HOPES TO CHALK UP 30% INCREASE IN SALES NEXT YEAR. PT Intraco Penta with core business in heavy equipment distribution, hopes to chalk up a 30% increase in sales next year from this year's target of Rp 2.99 trillion (US$ 335 million). The company said it is optimistic its other business lines including financing and renting out heavy equipment would also grow. In the first nine months of the year, the company already recorded income valued at Rp 2.07 trillion or an increase of 50.6% from the same period last year. The company also recorded a strong growth in net profit to Rp 68.1 billion in the January-Sept period from Rp 45.8 billion Earlier the company said it needed US$ 200 million to acquire coal mine this year. Intraco's president Petrus Halim said the company would acquire coal mine already on stream Intraco, the distributor for Volvo, Bobcat, Mahindra Tractors, and Sinotruk heavy equipment hopes the process of acquisition would be wrapped by the end of this year. The acquisition to be financed with fund to be raised from the sales of rights shares, is part of the company's expansion plan.

FIRST MEDIA US$ 200 MILLION EXPANSION. PT First Media Tbk (KBVL) plans to invest up to US$ 200 million in 2012 and 2013. The investment will be for expansion of business in Wimax internet, cable TV, and video on demand (VOD). First Media chief commissioner Peter F Gontha said the fund for the expansion will be provided internally by the company and its shareholders and strategic investors. Peter said the company will build 900 units more base transceiver stations (BTS). The units will be built in various areas to strengthen its internet business networks in the Greater Jakarta area Jakarta, Bogor, Bekasi, Depok, and Tangerang and Banten. By the end of this year the company will have only 190 towers in the Greater Jakarta area, he said.. The company already secured the license to expand Wimax operation in western Sumatra, North Sumatra and Aceh.