Offer for Joint Operations PT Kertas Kraft Aceh (Persero)

Background

PT Kertas Kraft Aceh (Persero) (“PT KKA” or “The Company”), is the largest kraft paper producer in Indonesia with a capacity of 135,000 tones per annum.
Due to raw material shortages and the discontinued supply of natural gas, as well as Aceh’s unfavorable social and political condition at the time, The Company had to cease its operation in 2007. 
Considering the sustainable and profitable growth of kraft paper industry, the high demand of kraft paper, and The Company’s financing ability, today PT KKA intends to revive the operation of its factory by way of inviting potential investors to be their strategic partner based on a win-win strategy. 
 PT KKA has appointed PT Perusahaan Pengelola Aset (Persero) (“PT PPA”) to offer joint operations scheme to interested potential investors through a program named “Offer for Joint Operations of PT Kertas Kraft Aceh (Persero)”.

 

Joint Operations

The Joint Operations offered will give the selected strategic partner (“Mitra KSO”) the opportunity to work together with PT KKA in performing the entire production activities using all production facilities owned by PT KKA for a limited period of time.
PT KKA will then provide and grant full access to Mitra KSO to utilize The Company’s production facilities together with PT KKA. Mitra KSO will be given the flexibility to determine the best plan to re-operate PT KKA in accordance to Mitra KSO’s own analysis and consideration.
Mitra KSO is obligated to perform the entire operational activities by fully utilizing its ability and resources to ensure the effectiveness of this joint operations scheme.
There will be no transfer of ownership of all or any of PT KKA’s assets to Mitra KSO. Should there be a sale of shares by any or all of PT KKA Shareholder, Mitra KSO will have the preemptive right to buy the shares based on price determined by jointly appointed independent appraisal.

Company Profile

PT Kertas Kraft Aceh (Persero) was established on February 21, 1983 in accordance with the letter of agreement from the President of the Republic of Indonesia No. I/PMA/1983 dated April 12, 1983 to support the national self-sufficiency program of cement bags.   

PT KKA owns a factory with installed annual capacity of 135,000 tones at Lhokseumawe industrial area, about 30km from the City of Lhokseumawe, North Aceh.
The factory is built on 219.2 hectares of land on Jamuan Village of North Aceh Regency, NAD Province.

The Company is a State-Owned Enterprise in manufacturing with an ownership composition of the following:


SHAREHOLDER

AMOUNT

VALUE (Rp)

%

Negara Republik Indonesia

154,447,723

772,238,615,000

96.67 %

PT Alas Helau

5,351,056

26,755,280,000

3.33 %

 

159,798,779

798,993,895,000

100 %

 

 

 


According to Deed No. 01 dated March 11th, 2009

The Management of The Company is as follows:


BOARD OF COMMISSIONERS

President Commissioner

Bahrumsyah Kasman

Commissioner

Anwar Isham

Commissioner

Faisal Putra


 

 

008PT KKA produces Multiwall Regular (MWR) and Multiwall Extensible (MWX) cement sack paper bag. MWX strong suit is its excellent stretching capability, while MWR is more tear resistant. MWX is suitable for glued cement sack model whereas MWR for sewed sack model.
Stages of production processes carried out by PT KKA can be divided into 5 parts:

  • Debarking
  • Chipping
  • Pulp Making
  • Screening
  • Drying, Pressing, and Rolling

    BOARD OF DIRECTORS

    President Director

    Ir. Abdul Aziz Pazsa, MM

    Director of Operations

    Andriano Baharudin

    Director of Finance

    Muhammad Adnan

    Director of Human Resources

    H. Teuku Anwar Daud, SE

 


Investment Considerations

BIGGEST PRODUCTION FACILITIES

PT KKA has production facilities with the largest capacity in Indonesia with a complete factory infrastructure that is integrated with its supporting facilities. The factory can be flexibly designed according to the availability of raw materials and product specifications that will be generated. Thus a large amount of initial capital investment will not be required from prospective strategic partner. 

007

 

NATIONAL DEMAND OF KRAFT PAPER

Kraft paper industry retains a chance to grow in a sustainable manner, consequently, there is no significant threat to the industry’s profit. The propensity of the high demand for kraft paper in order to meet domestic demand with

significantly increasing price trend created opportunities for the creation of good profit.

LOCAL GOVERNMENT SUPPORT

The Local Government of NAD fully supports the re-operation of PT KKA as part of an effort to accelerate the Province’s economic growth. The most significant forms of support include operational permits for industrial plantation supplying raw materials for PT KKA and the guarantee of safe and conducive situation for Mitra KSO to work together with PT KKA, including the use of specialized workers from outside the Province.

AVAILABILITY OF RAW MATERIALS

PT Tusam Hutani Lestari as the major supplier of raw materials for PT KKA has signed a Memorandum of Understanding to affirm their commitment and willingness to supply pine timber merkusii to The Company. The re-opening of PT KKA will not be hindered by shortages of pine wood as its raw material since The Company can make use of woodchip, pulp, as well as waste paper as additional or alternative raw materials with a few technical adjustments to their production facilities.

PRODUCT OFFTAKER

PT Semen Gresik has confirmed their willingness to buy PT KKA’s products (as an off taker) provided that the specification of kraft sack paper products are tailored to market demands.

DEBT RESTRUCTURING

Bank Mandiri, the largest lender to PT KKA, has given their principle approval with regard to the implementation of this Joint Operations program for PT KKA as well as their willingness to execute the settlement of The Company’s debt restructuring.

OTHER IMPORTANT MATTERS

Letters of Intent from 5 State-Owned Enterprises, namely PT Semen Gresik Tbk., PT Bukit Asam Tbk., Perhutani, PT PPA, and PT PPA, have been signed to confirm their mutual agreement to put their best effort in re-opening PT KKA by way of SOEs Synergy scheme.

  •  
    • PT Bukit Asam is committed to supply coal to PT KKA’s factory
    • Perum Perhutani will contribute to the supply of pine wood for PT KKA’s raw material
    • PT Semen Gresik will be the offtaker of kraft paper produced by PT KKA
    • PT KKA is fully committed to implement the restructuring and revitalization program with the re-opening of PT KKA’s factory.
    • PT PPA will undertake the Restructuring and Revitalization Program of PT KKA.
 
   

The Offer for Joint Operations

The Offer for Joint Operations of PT Kertas Kraft Aceh (Persero) Program is administered through an open offering program but not a public offering mechanism as stated in Law No. 8, 1995 concerning Capital Market. Program Announcement will be published on February 24, 2011and on March 10, 2011 through national newspaper (Bisnis Indonesia and Kompas), local Newspaper in Aceh (Serambi), and through PT PPA’s website, www.ptppa.com.
The schedule of the Program is as follows:

Registration
7 June – 6 July 20011

 

Due Diligence
7 March – 29 July 2011

 

Transaction
3 August – 7 September 2011

  • Program Announcement:
    24 Feb 2011 dan

    10 Maret 2011
  • Registrasi dan Pembayaran Security Deposit
    (Rp10.000.000.000,-):
    25 Feb – 6 July 2011

  • Access to Due Diligence and Site Visit for Qualified Bidder (interested parties who have complied with the required conditions and paid Security Deposit):
    7 March – 29 July 2011
  • Program Explanation (Aanwidjzing) and Management Presentation:
    14 March – 29 July 2011

  • Submission of Bid Proposal:
    3 August 2011
  • Winner Announcement:
    5 September 2011

  • KSO Initial Payment:
    7 September 2011

  • Signing of KSO Agreement:
    7 September 2011

Further inquiries regarding The Offer for Joint Operations of PT Kertas Kraft Aceh (Persero) Program can be made to:

PT PERUSAHAAN PENGELOLA ASET (PERSERO)

Sampoerna Strategic Square North Tower Lantai 9
Jl. Jend. Sudirman Kav. 45-46, Jakarta Selatan
Telp. (021) 5798-2555, (021) 5798-2556, (021) 5798-2557
Fax. No. (021) 5798-2558
Attn.: Maryati (email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it )
or Irene Stephanie Fretina Siwy (email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it )

Last Updated on Tuesday, 07 June 2011 19:59