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Tuesday, 06 September 11
SEMEN GRESIK TO ACQUIRE COAL MINE FOR RP. 1 TRILLION


COALspot.com - PT Semen Gresik Tbk (SMGR) is planning to acquire a low calorific value coal concession (IUP). According to Semen Gresik, the coal mine acquisition will help them to reduce the cost of cement production as fuel cost is contributing about 30% of the total cement production, as reported by inila.com.

The Company is engaging in cement industry. Officially inaugurated on August 7, 1957 by the first President of the Republic of Indonesia with installed capacity of 250,000 tons cement per year. The company's domination in the domestik market share to a 44.4% current level.

The Company plans to acquire the IUP which is under production status with an investment of  Rp1 trillion (approximately US$ 116.78 million). PT Semen Gresik will also start to operate of two factories in 2012, and the company's coal consumption is expected to rise 2 million tons to 5 million tons by 2012., Inila said.

Samuel Securities sees the SMGR's expansion move vertically to secure the supply of fuel, and our outlook is positive as the acquisition of coal concession will increase cost-efficiency the SMGR. 

"But we are still awaiting details of acquisitions to see how much added value from these acquisitions," said Samuel Securities, according to Inila.



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