JAKARTA: In a significant move signalling a new phase of growth and expansion, PT Gunung Raja Paksi Tbk (GRP) and its affiliated company, PT Gunung Garuda (GRD), announced the completion of the sale process involving a combined 95% stake in its subsidiary, PT Nusantara Baja Profil (NBP), to Yamato Kogyo Corporation (YKC), Siam Yamato Steel (SYS), and Hanwa Indonesia (HWI), a subsidiary of Hanwa Co Ltd, as agreed upon in definitive agreements executed on 8 August 2023.
This strategic alignment of vision and goals among all parties involved signals a new phase of growth and expansion for the companies. Alongside the successful acquisition, NBP also changes its name and identity to Garuda Yamato Steel (GYS).
Before the sale, GRP and GRD held 81.07% and 18.93% respectively. Following the sale, GRP will retain a 5% stake with YKC holding 45%, SYS holding 35% and HWI holding a 15% stake in GYS respectively.
The investment in GYS represents a strategic move by YKC, SYS and HWI to expand their business in Southeast Asia. The transaction, valuing GYS at US$450 million, underscores the immense potential and attractiveness of the Indonesian steel market.
This investment by a diverse and strategic group of investors is a testament to the successful transformation of the company.
“With the collective financial strength and operational expertise of our investment partners, GYS is well-positioned to be the leading structural steel company in the region.
“We have exciting plans ahead to launch new steel products that will capture the immense market opportunities in Indonesia and will continue extracting further margin expansion through our production efficiency initiatives,” said Garuda Yamato Steel President Director, Tony Taniwan.
The acquisition of GYS by YKC, SYS, and HWI emphasises their strategic vision to expand their presence in the domestic market, reflecting a shared vision for growth and prosperity in the region.
The companies’ collaborative effort aligns with the projected growth in national steel consumption, estimated to reach 18.3 million tonnes in 2024 with a 5.2% increase.
Collectively, the strategic investors will focus on growing their presence in SEA and be able to bring synergies through their expertise in the structural steel business, global procurement and marketing networks and financial strength.
“This strategic realignment not only creates tangible value for shareholders but also reinforces GRP’s financial position, empowering management to focus on further enhancing the company’s competitiveness and sustainability efforts,” said GRP Finance Director, Roymond Wong.
With the conclusion of the transaction, GRP will focus on its existing flat business and has big and exciting plans to transform into the lowest carbon-emitting steel producer in the region.
“Our vision for the future of GRP lies in green steel and signals our strong commitment and support to Indonesia’s government initiative to achieve net zero emissions by 2060. There is going to be massive market disruption as carbon policies around the world put pressure on supply chains to deliver low-carbon solutions and players that are not able to adapt will not survive,” said GRP Chairman of the Executive Committee, Kimin Tanoto.
Meanwhile, GRP Strategic Advisor, Kelvin Fu said, “Through this transaction, we have achieved significant value creation for shareholders, bolstered GRP’s financial strength and empowered management to focus on developing the flats business.
“We deeply appreciate the unwavering support, dedication, and confidence demonstrated by our Japanese and Thai investment partners, and we are committed to maintaining and enhancing our partnership.”
