State cement company Semen Gresik acquired a majority stake in Vietnam’s Thang Long Cement for $157 million, in a move to expand the company’s capacity for serving the region’s growing demands.
Semen Gresik president director Dwi Soetjipto and Vu Van Tien, chief operating officer of Tang Long’s parent company Ha Noi General Export Import, completed the deal for Gresik to buy the 70 percent stake in Thang Long in Hanoi on Tuesday night.
“This opens the opportunity for meeting increasing demands in Vietnam and fulfilling the supply shortage in Indonesia,” Dwi was quoted as saying by Investor Daily.
Gresik will use internal cash, which currently stands at Rp 2.8 trillion ($290 million) for the purchase. Dwi said the acquisition price included the assumption of Thang Long’s $111 million in debts.
Thang Long, which means flying dragon in Vietnamese, has an annual production capacity of 2.3 million metric tons, and annual production has been 2 million tons a year. It operates a cement plant in Quang Ninh province and a miller on the outskirts of Vietnam’s capital Ho Chi Minh. Its reserves include 76 million tons of limestone deposits.
Thang Long is also seeking to develop two new plants in Quang Ninh and Binh Phuoc provinces, with combined potential limestone deposits at 200 million tons.
“We will integrate their business with our current ones, in order to speed up our growth,” Dwi said.
Semen Gresik, which will rebrand itself as Semen Indonesia, already has two subsidiaries in Semen Padang and Semen Tonasa.
The Vietnamese cement maker would lift total cement capacity of Semen Gresik to reach 22.5 million tons a year.