MYOH Prepares Diversification into Renewable Energy Sector
JAKARTA - PT Samindo Resources Tbk (MYOH) is preparing to expand its renewable energy project. The Company is partnering with a South Korean company, targeting a 100 megawatt solar power plant (PLTS) project with an investment value of approximately USD100 million.
MYOH President Director Kim Jung Gyun said it wants to diversify the business. The company, with its main business of coal mining, began exploring the renewable energy sector. He said business diversification needs to be done because coal is a non-renewable natural resource.
"We are diversifying our business due to the negative trend in coal price , renewable energy is potential in the future," Kim said in a press conference in Jakarta on Thursday (7/27/2017).
According to him, Samindo's efforts to enter the renewable energy sector are in line with MYOH's business diversification strategy. "So far revenue is still dominated by business contracts from our sister companies," he added.
He further said that currently MYOH's parent company, Samtan Co Ltd is very interested in the renewable energy power business business, so the company seeks to enter the business.
Renewable energy become the prime target since the Indonesian government is considered committed to develop it. Thus, this sector has great potential for cultivation. "We must continue to grow the business, and we are very enthusiastic about renewable energy," he said.
The company plans to target 100 MW power plant which is divided into three projects in Sumatra. Currently, the company is following the pre-qualification process of tender at PT Perusahaan Listrik Negara (PLN). However, Kim is reluctant to mention the name of the company that will be a partner on the project.
It's just that the company from south korea is a large corporation in the field of power plants. "There are six projects tendered, we will take three projects," he said.
Samindo Business Development Officer Leonardo Beniartho explained that the consortium needs US $ 100 million to finance the entire PLTS project. "Every 1 MW, Samindo and his partner will invest about USD1 million," said Leonardo.
Investment in PLTS is considered cheaper than the investment of coal-fired steam power plants that can reach USD1, 5 million for every 1 MW. "But the PLTS project needs a much wider field for project development," he said.
In order to work on the project, the company will not raise funds from the capital market or bank loans. "Our parent will support even our financial statements show that our capital structure is still very strong, we will not increase debt in 2017," he said.
On the occasion, the company also introduced two new directors, Kim Jung Gyun, who served as president of MYOH. While Ahmad Saleh was appointed as an independent director.
Previously, Kim Jung Gyun was director of sales and marketing at Samtan Co Ltd, Samindo Resources's parent company headquartered in South Korea. While Ahmad Saleh was an operational director at PLN Batubara.
In the future, Kim revealed that Samindo's strategy will be more focused on working on power plant projects and various coal-related projects.
Currently, there are two new business lines being explored. First, it has its own coal mine. Second, entering the electricity business sector.
Samindo will not pursue high coal targets. The reason, the price of coal that rebounded since late last year has the potential to return to pressure.
Clearly, the company has an option for integral business development with core business now, which is engaged in the coal mining sector.