State-controlled coal miner Bukit Asam has set aside $80 million to expand its business into Myanmar, joining a string of firms jostling for a slice of the Southeast Asian nation’s burgeoning economy.
The company said last week it planned to build a mine-mouth coal-fired power plant in Myanmar, which will become the biggest of its kind in the country.
“This energy project has a capacity of 2×200 megawatts. There is already a research team that has done a study on it,” Bukit Asam’s corporate secretary Joko Pramono said on Friday.
The company is one of 15 Indonesian state-owned firms eyeing Myanmar for business expansion, according to Minister Dahlan Iskan.
Bukit Asam has been keen to grow its business overseas, as well as at home, in an effort to diversify revenue sources.
Its earnings declined slightly last year as global coal prices fell amid concerns of an economic slowdown in China.
The company’s net income shed 6 percent to Rp 2.9 trillion ($299 million) last year, down from Rp 3.09 trillion a year earlier. Revenue rose 10 percent to Rp 11.59 trillion, from Rp 10.58 trillion in 2011.
Bukit Asam sells 45 percent of the coal it produces to overseas buyers, including those in Japan, Taiwan and Vietnam.
Based in Muara Enim, South Sumatra, the company has plans to develop infrastructure for its Indonesian coal mines.
In October 2012, Bukit Asam said that it had budgeted around $580 million over the next four years to build infrastructure facilities to support its core business.
It laid out plans to develop two mine-mouth coal-fired power plants in Sumatra with a combined capacity of 1,460 megawatts.
The company, 65 percent owned by the government, has also signed a memorandum of understanding with state electricity supplier PLN and a Malaysian utility firm to develop a 1,200-megawatt coal-fired power plant, which will produce electricity for exporting to Malaysia.
Bukit Asam is not the only Indonesian state-owned company with a view to expanding into Myanmar. Others interested in the increasingly accessible country include tin producer Timah, telco Telekomunikasi Indonesia, cement source Semen Indonesia, fertilizer producer Pupuk Indonesia and PLN.
GMF AeroAsia, which maintains national carrier Garuda’s aircraft fleet and offers engineering and maintenance services to various airlines across the region, has revealed it has a deal with Myanmar Airlines in its sights.
Shares of Bukit Asam fell 2.17 percent to Rp 13,500 during Friday’s trading at the Indonesia Stock Exchange.