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Saranacentral Shares Soar on Market Debut
Francezka Nangoy | December 21, 2011

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Saranacentral Bajatama, a steel plate producer, had a stellar debut on the local stock market on Wednesday, with its shares rising 36 percent to Rp 360 from an initial public offering price of Rp 250.

The Jakarta-based company raised Rp 100 billion ($11 million) after offering 400 million shares, a 22 percent stake in the company, in an IPO last week.

Saranancentral has said it will use part of the IPO proceeds to buy an additional color-coating machine to make aluminum-zinc-alloy coated steel. The machine would allow the company to expand its line of products.

The rest will go toward working capital, Ibnu Susanto, the company’s president commissioner, said last month.

Ibnu said on Wednesday that Saranancentral’s net income was projected to increase to more than Rp 100 billion next year from an estimated Rp 40 billion this year. Sales are forecast to climb to Rp 2 trillion from Rp 825 billion this year, he said.

Ibnu was more bullish on the company’s outlook than Suryani Kamil, a Saranacentral director, was last month.

At that time, Suryani said the company’s net income was projected to climb to Rp 78 billion next year, with sales forecast to reach Rp 1.2 trillion.

Ibnu said on Wednesday that the company would begin producing cold rolled coil, with a total investment of between Rp 600 billion and Rp 700 billion.

“We will start building the plant in 2013,” Ibnu said.

The company currently gets CRC from Krakatau Steel, a state steel producer.

Ibnu said Saranancentral was working on various options to finance the plant including bank loans and bonds.

“We will have to see what the best possible option is for the company,” he said.

The company can produce 9,000 to 10,000 tons of aluminium sheets per month at full capacity. It is currently operating at only 30 percent to 40 percent capacity, but that is expected to increase to 80 percent next year, he said.