Business Diversification, Samindo Budgeted US$1million

JAKARTA. PT Samindo Resources Tbk eventually got exhausted seeing the coal price that wasn’t rebound. Thus, the mining service company will diversified its business by the end of this year.

There are 2 diversification options that are inserted as Samindo’s agenda. Firstly, the Company is about to enter steam generated electricity with capacity of 1,000 megawatt (MW).

As a new comer, the Company intends to join in a consortium. “Electric power plant is capital intensive investment, therefore the most attainable is to join consortium. Becoming an operator or main investor is not an option at the moment” said Hananto Wibowo, the Corporate Secretary of PT Samindo Resources Tbk to KONTAN on Friday (2/9).

Samindo intends to synergize the steam electric power to the coal being produced itself. Therefore, they also have a plan to acquire coal mine with low to medium calory quality in Kalimantan.

Second option, Samindo intends to enter the palm oil business and transportation that are energy related. They have the opinion that those businesses can jointly support the mine service contractor, a business they are into.

So far, Samindo has not decided which plan to take from the 2 options. For certain, company with ticker code MYOH is ready to disburse funds more than US$1million. Samindo will put its effort that the funding will come from internal sources.

“Otherwise should borrow from the bank, as long as the funding selection is done cautiously. There should be no error as when the funds are already disbursed and we could not get it back and loss,” said Hananto.

Source to fund the business diversification is different from the one to fund the 2016 capital expenditure. In this year, Samindo allocated capex of US$7.5million.

At the same time to complete the diversification options, Samindo is looking for new customer to maximize its mine contractor service. Just for information, their biggest customer PT Kideco Jaya Agung is only targeting coal production of 2 million tons in this year. However, Samindo’s capacity of coal getting is up to 10 million tones, while the overburden removal is 45.2million tons.

Until August this year, Samindo already produced 7.6million tons of coal. While the overburden removal is 29.3million tons.