Wika to set up joint venture to tap foreign markets

Antara News, Monday, January 18, 2010 21:44 WIB

Jakarta (ANTARA News) - PT Wijaya Karya Tbk (Wika) plans to set up a joint venture company to tap construction market abroad particularly in Northern African countries such as Algeria, the company`s finance general manager, Entus Asnawi, said.

"Like in Algeria we will set up a joint venture with a local company to tap construction market in the oil rich country," Entus said here on Monday.

Wika would inject up to 49 percent of capital into the joint venture company with the rest of the capital left for the local company, he said to newsmen.

"We deliberately take a minority position because the rule in the country only allows to hold up to 49 percent shares," he said.

He said Wika would set up the company to win construction projects in that country which number a lot including building, housing and bridge construction projects.

"Later after the company wins a tender will Wika come to carry out the project. We are optimistic we will win the projects because the number of construction companies in that country is small," he said.

Entus said the plan will be realized immediately by the middle of this year at the latest and a local has already been chosen to be Wika`s partner.

He said Wika has actually received a lot of offers so far to carry out projects abroad such as from Russia and Brazil but "study has yet to be carefully done with regard to legal aspects to avoid a loss."

Entus said Wika had indeed built cooperation with Exim Bank of Indonesia to become the underwriter for the overseas projects but the bank also had to conduct a careful study first before agreeing the plan.

Regarding Algeria, he said, Wika was now carrying out a 500 kilometer long road and bridge project worth Rp800 billion in cooperation with a Japanese consortium.

"We win the trust because the result satisfied the consortium. Although our posisition is a mere sub-contractor we have been trusted to implement the next package. So we have twice obtained additional packages," he said.

With regard to the Asean-China Free Trade Area he said Wika would change its strategy not only to become a mere sub-contractor but to become a main contractor.