Japan's leading cement maker Taiheiyo Cement Corp. has teamed up with an Indonesian state-backed peer to penetrate the growing local market and elsewhere.
The Japanese firm said in a statement that it signed a business alliance agreement with PT Semen Indonesia on Tuesday, including planned investment of up to 25 billion yen ($232 million) in its subsidiary.
Taiheiyo Cement is joining hands with the state-backed leading cement maker and PT Solusi Bangun Indonesia, the subsidiary, to expand business in such fields as natural resources, environmental business and building materials in addition to cement, the statement said.
The Tokyo-listed company plans to invest between 20 billion to 25 billion yen to acquire a stake of at least 15% in Solusi Bangun Indonesia through an equity warrant issue.
Both sides will seal the deal in July, and Taiheiyo Cement will send a director and an auditor to the board of the Indonesian equity method affiliate, according to the statement.
The three firms aim to cash in on growth in cement demand in the Indonesian market while partnering in cement sales in foreign markets, Taiheiyo Cement said.
Semen Indonesia, in which the government holds a 51% stake, sold 42.6 million tons of cement in 2019, with the subsidiary supplying 10.9 million tons, according to the Japanese cement maker.