Samindo Targets Acquisition of Power Plant and Palm Oil

PT Samindo Resources Tbk (MYOH) this year targets to diversify its business to work on power plants and palm oil. The company currently claims to be eyeing the mine mouth power plant project.

MYOH President Kim Jung Gyun said the diversification agenda is one of the company's focus this year. Even for the diversification plan to the power plant business, the company has prepared the land acquisition and development fund. "The power plant business this year will start, but it still needs discussion. There is a process to be resolved, "said Kim in a press conference in Jakarta, Monday (26/2/2018).

He added that the company is preparing US $ 100 million for the acquisition of 20% -30% of coal mining shares. As for the plant, the company allocates funds reach US $ 25 million. However, the company so far has not been able to realize the plan, because in the last year a number of electricity projects that followed, the tender has not been obtained. This year, the company expects that there will be a tender for the plant. "About how many megawatts does not matter," Kim continued.

As for diversification into the palm sector, Kim has not elaborated on the plan. But clearly, according to him, the capability to manage the palm business already owned. Therefore, the business diversification plan is not a difficult thing. "Samtan already has power plant and palm oil business, so it's not new," he continued.

The mine acquisition plan remains part of the expansion this year. Currently, the company still review at least three mines for the acquisition. "We have seen several new mines from two to three mines, this year hopes there could be one or two," he said.

He said that the company does not restrict the search for the East Kalimantan mine where the company's main operations are located. But clearly, the acquisition of the mine is targeting high and low calorie coal in Kalimantan and Sumatra.

Kim added that the company will not acquire 100% of the mine, the company will only take over some of its shares for the mine already in operation. Because the company's core business is currently engaged in mining services activity. "We see that the mines in Indonesia are not limited to Sumatra or Kalimantan, which can produce 1-2 million tons a year or 4-5 million tons a year," he continued.

This year the company allocated a capital expenditure fund of USD13, 8 million, the amount is not included for the acquisition plan. Although not included in this year's capex, the company said it had prepared funds for the acquisition.

He said the increase in capex is nothing but one of the company's preparations to respond to the increase in targets charged by clients in 2018.

According to him, most of the capex will be allocated for the purchase of heavy equipment on overburden removal and coal getting activities. As for, he continued, some heavy equipment that became the company's target of dump trucks, excavators, cranes and pump. He revealed that currently the process of ordering heavy equipment has been done and is expected in the first quarter of 2018, the tools can already be operated.