Corporate News in Brief -JAugust 2011

CARGILL TO BUILD CACAO PROCESSING PLANT IN INDONESIA. US food giant Cargill Cocoa and Chocolate will build a cacao processing factory in South Sulawesi, the country's largest cacao producing region. The factory, to be built with an investment of US$ 100 million and to be operational in 2012, will have an annual production capacity of 65,000 tons of cacao products, an official of the industry ministry said. Agro industry director General Benny Wahyudi said the investment plan is in the process of preparation, adding the company is looking for the suitable location for the factory. Earlier, PT Nestle Indonesia, a local unit of the Swiss food giant Nestle, planned to build a US$ 200 million factory in Karawang, West Java, to produce infant cereal, chocolate malt drinks and milk powder with the brand of Milo. So far, supplies of Milo chocolate in the country have to be imported from Malaysia, Benny said. The plans to build cacao processing factories in the country followed the government policy of slapping export tax on cacao beans to guarantee basic material for local The government slapped higher export taxes on cocoa beans to encourage development of cocoa processing industry in he country. Based on data from the trade ministry, the country's exports of cacao beans dropped to 141,000 tons in the first seven months of 2011 from 264,000 tons in the same period in the previous year.

XL AXIATA SECURES A LOAN TO REFINANCE DEBTS. Indonesia's third largest telecommunications operator PT XL Axiata said it has secured a loan of Rp 1 trillion (US$ 111million) from Bank of Tokyo-Mitsubishi UFJ to refinance debts maturing in 2012. XL Axiata has debts at least Rp 1 trillion maturing in 2012, Johnson Chan, a vice president of the cell phone operator which is controlled by Malaysia's Axiata Group Bhd. The repayment toward the end of 2011 was part of the plan to pre-pay debts to two banks local and foreign banks Johnson said. In the first quarter of 2011 the company prepaid Rp900 billion debts including Rp 400 billion to Bank Mandiri and Rp 250 billion each to ANZ Bank and Bank of Toyko-Mitsubishi UFJ.

TRADA MARITIME NEEDS US$ 250 M TO BUY COAL TRANSPORT SHIPS. Publicly traded shipping company PT Trada Maritime said it needs Rp 2.24 trillion (US$ 250 million) to buy a number of new ships for coal transport. New ships would be needed when its new coal mine has started production in 2012, Trada's finance director Adrian E. Sjamsul said. Adrian said the company, however, has not made commitment with prospective financers. Currently the company has a bulk vessel, 10 barges and 10 tugboats. The company also plans to acquire a 5,350 hectare coal concession in Mantar, Damai and Kutai Barat, East Kalimantan having coal reserves of 61 million tons. The acquisition plan, however, is yet to be sanctioned by its shareholders, Adrian said, adding the company wants to buy ships, barges and tugboats. The coal mine acquisition announcement jacked up the price of Trada's share to Rp 900 each from Rp 700 a week earlier.

BANK SYNDICATE TO FINANCE OIL REFINERY PROJECT OF SARATOGA. PT Tri Wahana Utama has secured a loan of US$ 92 million from a bank syndicate of Bank Negara Indonesia (BNI) and four foreign banks to finance the construction of an oil refinery. BNI corporate director Krishna Suparto confirmed saying the state lender is the joint mandated arranger. BNI will contribute US$ 20 million to the loan. The foreign members of the syndicate include Hong Kong Shanghai Bank Corp., Bank of China, United Overseas Bank and Mitsubishi Bank, to produce oil fuels and derivatives. Tri Wahana, a subsidiary of Saratoga Capital, will build an oil refinery with a processing capacity of 6,000 barrels of crude oil per day. Crude oil will be supplied from Banyu Urip in the Cepu Block, East Java, operated by ExxonMobil. Saratoga, a joint venture established by Edwin Soeryadjaya and Sandiago Uno took over the majority 77% stake in Tri Wahana in June, 2011 from the Harita Group. Tri Wahana would be the first private company to have oil refinery in the country. Until now state oil and Gas Company PT Pertamina are the only producers of refined oil fuels in the country.

SIAM CEMENT FAVORED TO ACQUIRE 30% OF CHANDRA ASRI. SCG Chemical Company Ltd has been favored to acquire a 30% stake at PT Chandra Asri Petrochemical, Indonesia's largest petrochemical company. Earlier it was reported South Korea's petrochemical giant Honam Petrochemical also indicated interest in the stake. Under an agreement signed on Sept 19, the subsidiary of Siam Cement Public Company Ltd would pay Rp 3.76 trillion for the stake. The 30% stake includes entire 22.87% stake of Singapore's Temasek Holdings subsidiary Apleton Investments Ltd's and 7.13% stake of PT Barito Pacific. The deal will reduce the stake of the majority shareholder Barito Pacific to 64.87%. Barito's president Loeki S. Putra said involvement of Siam Cement will open greater opportunity for the business expansion of Chandra Asri. Chandra Asri wants to increase its production capacity olefin petrochemicals to 1 million ton by the end of 2014 from 600,000 tons at present. SCG's president Cholanat Yanarnop said the company is seeking to wholly take over PT Sulfindo Adiusaha, another Indonesian chemical company

PERTAMINA EP TO EXPLORE FOR OIL IN CENTRAL SULAWESI. PT Pertamina EP said it will drill two exploration wells in the Donggi gas field in the Matindo Block in Central Sulawesi this year. The Matindok Block consists of four gas fields Matindok, Donggi, Maleoraja and Minahaki. Syamsu Alam, the president of the subsidiary of the state oil and gas company PT Pertamina, said the block is expected to come on-stream in 2014. The block is expected to produce 105 million cubic feet of gas per day when it is fully operational, Syamsu said. A survey by Gaffney Cline and Associate showed that the Matindok Block has a total reserve of 2.288 trillion cubic feet of gas with proven reserve of 0.696 TCF. PT Pertamina EP took over the block from Union Texas in 1996 after the US company failed to make progress in explorations since its was awarded the concession in 1980.

MTD GROUP TO EXPAND THE CAPACITY OF COAL PORT IN CIGADING. Malaysian Construction Company MTD Group plans to spend $50 million to increase the coal shipment capacity of a recently opened seaport in Banten. The operation of the terminal, located at Cigading port in Cilegon, has been inaugurated. Currently, it can handle the shipments of up to 6 million tons of coal per year. MTD's investment is expected to increase the terminal's capacity to 18 million tons, MTD President Dato Azmil Khalid said. The terminal is operated by MTD's subsidiary Cigading International Bulk Terminal. "As one of the biggest coal producers in the world, Indonesia must have proper coal shipment facilities that can meet the needs of domestic and international clients," Dato said. The terminal has a storage capacity of up to 450,000 tons and is equipped with cranes, conveyor belts and storage areas. Dato expressed optimism that demand for coal-handling services at the terminal will grow because the closest coal terminal at Tanjung Priok, Indonesia's largest is nearing capacity.

PELINDO III INCREASED INVESTMENT IN 2012. State owned port operator PT Pelabuhan Indonesia (Pelindo) III will invest Rp 1.6 trillion in 2012 or up 18% from 2011's investment plan to increase its productivity. Pelindo III president Djarwo Suranto said the investment will be used for 397 projects including expansion of quays and procurement of loading and unloading equipment. Djarwo said most of the fund will be spent on development of multipurpose terminal project of Teluk Lamong in the Tanjung Perak port area in Surabaya. The multipurpose terminal project will cost around Rp 1 trillion. It is to be completed in 2013. The project is to prepare Tanjung Perak as a buffer for the country's largest port of Tanjung Priok, Jakarta which is facing worse congestion because of the delay in the implementation of the Kalibaru Utara container terminal project near Tanjung Priok. Pelindo II, the operator of Tanjung Priok has been worried that the port is already operating beyond its capacity. The congestion is getting worse from year to year. The multipurpose terminal project of Teluk Lamong will increase the capacity of. Tanjung Perak from 1.5 million TEUs to 3.5 million TEUs.

PETROSS ENERGY ACQUIRES JATIRARANGON BLOCK. PT Petross Energy has wholly acquired the Jatirarangon block in Bekasi, West Java from Ramba Energy Limited at a price of US$ 30 million. Petross hopes that the acquisition would push up its gas production by 12 million standard cubic feet per day. The Jatirarangon block was formerly operated by Ramba Energy Jatirarangon Ltd, a subsidiary of Ramba Energy Ltd of the Soeryadjaya family. CEO of Petross Energy Andhika Anindyaguna Hermanto said the company hopes to chalk up an additional income of US$ 16 million - US$ 17 million a year from starting 2012 from the gas block. Previously, Ramba Energy had 70% stake in the block with the remaining 30% held by PT Wahana Sad Karya. The block also produces 80 barrels of oil per day. Part of gas production from the block has been committed under sales contract to PT Perusahaan Gas Negara Tbk at a price of US$ 4.33 per Btu (British thermal unit) million with an annual escalation of 3%.