ABM allocates $200m for capex this year

By Thomas R. Sembiring

IDX-listed integrated energy company PT ABM Investama Tbk said that it has allocated US$200 million for capital expenditure this year, much of which to be set aside for its mining contractor subsidiary and investment in power plant business.

ABM Director Yovie Priadi said Monday that about 50 percent of the capex plan will be allocated to its mining contractor subsidiary PT Cipta Kridatama.

Yovie did not provide comparative figure, but ABM said earlier last year that it was planning a capex of up to $150 million for 2014.

He said that Cipta Kridatama accounted for about 35 percent of the company?s total revenue last year, while the power business accounted for 16 percent, with the remaining contributed by coal mining operation.

ABM has started to enter power plant development as part of diversification strategy to help cope with the current downturn in the global coal market.

?Progressing investment is currently in South Sulawesi, where we have developed 15 MW,? Yovie said, adding that the capacity of the South Sulawesi power plant project will be gradually increased up to 50 MW, with estimated investment of $2.5 million-$3 million per MW. He added that the company is currently in the process of negotiation of the power purchase agreement (PPA) with state-owned electricity firm PT PLN.

He said that ABM is also developing a 2x20 MW coal-fired power plant on Karimun Island, Riau Islands Province, and another coal-fired power plant in Aceh Province, with planned capacity of 100-200 MW. The estimated investment for the two project is $1.5 million-$1.7 million per MW.

Editing by Reiner Simanjuntak