United Tractors plans to spend $170 million on coal expansion

The Jakarta Post ,  Jakarta   |  Sat, 05/17/2008 11:15 AM  |  Business

Publicly listed heavy machinery supplier PT United Tractors plans to inject up to US$170 million into its subsidiary in the mining sector, PT Pamapersada Nusantara, which is citing the acquisition of a new coal mine this year.

United Tractors director of administration and finance Gidion Hasan said the company was considering several coal mines in Kalimantan with reserves ranging from 20 million to 40 million tons.

"There have been a lot of offers from companies in the Kalimantan region, but nothing is set yet. We are definitely looking to acquire at least one more coal mine there," Gidion said, adding that Pama managed two coal mines in Kalimantan under PT Tuah Turangga and PT Dasa Eka Jasatama.

Dasa Eka produced a total 3.6 million tons of coal last year and expects to increase production by 10 percent to 4 million tons this year.

Tuah Turangga, acquired by Pama in January for $115 million, has yet to start production, but is expected to generate between 2.5 million and 3 million tons a year starting 2010.

Parent company United Tractors, Gidion said, was also budgeting $30 million for its own capital expenditures this year to spend on equipment maintenance and upgrades.

To achieve total spending of up to $200 million -- including on the capital injection for Pama -- Gidion said the company would allocate $30 million from its capital and gather the rest from banks.

The company recently secured a loan facility worth $150 million from Mizuho Corporate Bank Ltd., and Overseas Chinese Banking Corp. Ltd., with Sumitomo Mitsui Banking Corp. of Singapore serving as facility agent.

United Tractors is the largest mining contractor in Indonesia, and supplies heavy construction equipment for mining, agriculture, forestry and infrastructure projects.

It aims to sell 4,250 units of heavy machinery in 2008, a 23 percent increase from 3,454 units sold in 2007. Gidion said around 50 percent of this year's sales would go to the mining industry.

Director of marketing and operations Paulus Bambang said the agriculture and mining industries greatly contributed to the company's rising profit margin.

"In 2006 and 2007, both industries contributed up to 70 percent of our revenues, with mining being the top contributor," Paulus said.

President director Djoko Pranoto said the rising prices of coal and crude palm oil would help the company maintain its profit amid fuel increases proposed by the government to take effect in June.

"Coal prices are also rising, along with crude palm oils, so I don't see the planned fuel increase as having an adverse effect on our company," Djoko said.

UT continues to make profits this year, increasing its first quarter revenue by 55 percent to Rp 5.78 trillion from Rp 3.73 trillion during the same period last year. (anw)

 

Iran signs up for more trade with RI

Novia D. Rulistia ,  The Jakarta Post ,  Jakarta   |  Mon, 05/12/2008 10:51 AM  |  Business

Iran, which has just signed two large project deals with Indonesia, aims to soon take up around 1 percent of Indonesia's annual international trade value, says the Iranian ambassador for the country.

"Currently, the trade value between Indonesia and Iran stands at around US$500 million, still a quarter from our target," Behrooz Kamalvandi said, as quoted by Antara.

Last year, trade relations between the two countries reached $553.1 million, a 37 percent increase from the $404.4 million recorded in the previous year, according to the Trade Ministry.

Kamalvandi added the country was on its way to achieving the target.

"Iran and Indonesia have signed deals on two large projects. First is a refinery in Banten with a total investment of $6 billion and the second is the construction of a fertilizer factory, known as the Hengam project, in southern Iran, with a total investment of $700 million," he said.

For the refinery project, scheduled for completion in 2012, Iran will provide around 150,000 to 180,000 barrels of oil per day, equal to 12-14 percent of Indonesia's total oil demand, Kamalvandi said.

"Some of the fuel produced from the refinery will be exported to Iran with the value of about $2 billion annually."

Indonesia and Iran will each finance 40 percent of the refinery project and the remainder 20 percent will come from Malaysia.

As for the fertilizer plant, Iran will export about 1 million tons of fertilizer to Indonesia.

The two projects are estimated to produce 2,500 tons of urea and ammonia per month.

"Indonesia and Iran still have potential in sectors which have not been explored yet. We will keep trying to find ways so big project deals can be made in order to maximize this potential," Kamalvandi said.