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Siam Cement invests in Indonesia

World Cement,

Thailand's largest industrial conglomerate by sales, Siam Cement PCL, recently announced plans to buy a 30% stake, worth US$441.2 million in Indonesia's PT Chandra Asri Petrochemical Tbk.

The 30% stake will be purchased from two different sources. Siam Cement will buy a 22.9% stake from Apleton Investments, a unit of Singapore government's investment arm Temasek Holdings Pte. Ltd., and a 7.1% stake from PT Barito Pacific Tbk.

Chandra Asri, Indonesia's sole cracker operator, operates 520 000 tpa of cracker at Merak, West Java. The company produces polyethylene, polypropylene, styrene monomer and various other olefins products.

Siam Cement will buy the shares for Rp. 4088 each, representing a slight premium to Chandra Asri's recent closing price of Rp. 4025.

The company confirmed in a statement to the Thailand stock exchange that it will, through its wholly owned unit SCG Chemicals, hold 919.8 million shares in Chandra Asri.

The controlling shareholder of Chandra Asri, Barito, a diversified company with business interests in the petrochemicals, forestry, property, mining and energy sectors, will hold a 59.4% stake.

The deal will allow Siam Cement to expand its presence in the region and fulfil its ambition of becoming a major petrochemicals player in Southeast Asia.

"This investment represents a unique opportunity for SCG Chemicals to invest in Indonesia's leading petrochemicals franchise, with highly attractive market growth dynamics," Siam Cement said.

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