Cakra plans to acquire oil, gas EPC firm

IDX-listed PT Cakra Mineral Tbk plans to acquire an oil and gas EPC (engineering, procurement and construction) firm this year as part of business diversification strategy to help ensure better revenue in the future, Kontan reported on Saturday.

The paper quoted Cakra Corporate Secretary Dexter Sjarif Putera as saying that the long-planned acquisition has now reached due diligence process. ?We expect to conclude it in the first semester of this year,? he said, but declined to disclose the identity of the target company.

Cakra?s current source of revenue is from the sale of zircon sands ore, about 80 percent of which goes to the export market particularly China. The company was forced to stop export of nickel and iron ores in early 2014 following the introduction of export ban on raw mineral ores by the government.

The company last year suspended its ferronickel and nickel pig iron smelter projects due to the weak commodity price environment.

Dexter said that unaudited revenue from zircon sands ore last year totaled Rp 70 billion, a surge from Rp 22.10 billion in the previous year. Revenue this year is expected to be flat. The company will maintain production rate this year at 22-25 tons per day. (*)