Wika Beton to operate three new plants

January 21, 2014, The Jakarta Post

PT Wijaya Karya (Wika) Beton, a subsidiary of state-owned construction company PT Wijaya Karya, hopes to secure half of the country’s precast concrete market, with the operation of the company’s three new facilities mid-year, a senior executive has said.

Wika Beton finance director Entus Asnawi Mukhson said on Tuesday that the company would allocate about Rp 628 billion (US$51.75 million) in capital expenditure (capex) this year, mostly for the construction of two new precast concrete facilities in Lampung, and another facility in Cilegon, Banten.

The Cilegon facility will be built in a joint venture with state-owned construction giant PT Krakatau Steel subsidiary, PT Krakatau Engineering.

Entus explained that the factories in Lampung, which will be integrated with a port, would need investment of Rp 350 billion, while construction of the new factory in Cilegon would cost the company about Rp 175 billion. The new facilities were expected to boost pre-cast concrete production by 10 percent, he added.

The remainder of the capex, according to Entus, will be used to procure land in Pasuruan, East Java; Bogor, West Java; and East Kalimantan. “The funds will come from an internal source,” he explained.

Wika Beton operational director Fery Hendrianto said that construction of the three new facilities were scheduled to be completed this year.

Fery said that the Cilegon facility was projected to start operating commercially in July, while the Lampung facilities were expected to commence production in August. “The Cilegon facility will produce about 100,000 tons of precast concrete a year, while the Lampung factories will produce about 200,000 tons annually,” he explained.

“The facilities are projected to serve future infrastructure plans, including the Sunda Strait Bridge project.”

He said that the new facilities would boost the company’s precast concrete production capacity to 2.2 million tons per year.

Entus said that once the facilities started operating, the company hoped to dominate half of the country’s market of precast concrete, with compressive strength of 500 kg/cm2. He said that his company currently dominated 44.84 percent of the country’s total Rp 5.8 trillion market segment, which is served by about 20 players.

Wika Beton projects to boost its total revenues by 24 percent and its profit by 20 percent this year, from Rp 2.03 trillion and Rp 240 billion,respectively last year.

The company’s revenues and profits in 2013 increased 28 percent and 33 percent from Rp 2.03 trillion and Rp 180 million in the previous year.

With the new facilities, Wika Beton will have 11 factories operating by the end of this year.

Late last year, the company commenced the production of PT Wika Kobe in Karawang, West Java, which produces 75,000 tons of precast concrete annually. Wika Beton is a joint venture with Japan-based Mistubishi Construction.

The company’s total contracts this year is estimated to hit Rp 3.5 trillion, up 29.63 percent compared to Rp 2.7 trillion last year.

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