The positive outcome of the Extraordinary General Meeting of PT Semen Cibinong Tbk. on 5 November 2001 means that Holcim Ltd can increase its present minority shareholding of 12.5 percent in Indonesia's third-largest cement manufacturer to approximately 75 percent. The contract is due to be completed in the next few weeks once final regulatory approval has been granted. Alongside its existing network of shareholdings in the region, this latest investment consolidates Holcim's leading position in the cement sector in the ASEAN countries.
The Extraordinary General Meeting was preceded by long and complex negotiations with Cibinong's principal creditors to restructure a total of USD 1.2 billion debt. Holcim has provided the company with considerable support in this area since June 2000.
Cibinong shares will continue to be listed on the Jakarta stock exchange. Holcim's fellow shareholders include major creditors and other minority shareholders. The restructured company will have equity of around USD 500 million and debt of around USD 300 million. Holcim is investing approximately USD 90 for every tonne of annual cement capacity. Now that its debt has been restructured, Cibinong is well placed to fully benefit from an economic recovery in Indonesia.
Construction activity in Indonesia collapsed as a result of the 1997/1998 Asia crisis, with demand for cement falling by more than 30 percent. Since then, the construction sector has begun to recover. Cement consumption is continuing to rise - by an expected 15 percent - in 2001, and should reach pre-crisis volumes again in 2002 or 2003. At current capacity utilization of around 60 percent, Cibinong has the necessary room to manoeuvre and grow within the market.
Cibinong has two highly efficient cement plants on the main island of Java. The plants have a combined annual capacity of just under 10 million tonnes, making it a major cement manufacturer in the country's key central market. Cibinong expects its domestic deliveries to total around 3.5 million tonnes in 2001. This year the company will also export some 2 million tonnes to other markets, especially in Asia. Cibinong also has substantial capacity in the ready-mixed concrete sector.
With majority and minority interests in over 70 countries on all continents, Holcim is one of the world's leading suppliers of cement, as well as aggregates (gravel and sand), concrete and construction-related services.