| 11 Mar 2010 |
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Arqaam Capital advises on Middle - East Asian transaction
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Middle East-based CTI GroupCTI Group
to invest in Indonesian cement producer Bosowa CorporationDubai, March 11, 2010 - CTI GroupCTI Group
Inc., the Gulf region's largest independent trader of cement and clinker, has agreed to invest in a cement production plant in Indonesia owned by Bosowa Corporation. The arrangement gives Jordan-based CTI its first investment in one of Southeast Asia's fastest-growing markets for infrastructure and construction projects. Arqaam CapitalArqaam Capital, the largest Middle Eastern investment bank headquartered in the Dubai International Financial Centre, conceived and arranged the transaction on behalf of CTI. Executives of CTI and Bosowa, one of Indonesia's biggest cement producers, formalized the contract in a signing ceremony on Thursday, March 11, in the Indonesian capital Jakarta.
CTI owns and operates a fleet of cement carriers and shore terminals and has a global distribution network in more than 25 countries. It recently concluded an agreement with PT Semen Batam ("Semen Batam"), a cement grinding plant owned by Bosowa on the island of Batam, to become the plant's exclusive supplier of clinker, the semi-processed raw material used in the production of cement. Now, by also investing in Semen Batam, CTI is expanding its international reach in an industry vital to nations that are seeking to develop and modernize their economies.
"This investment supports our strategic plan to diversify into cement production, which ultimately provides tremendous support to our core business of cement and clinker trading," said CTI Chief Executive Officer Mazen M. Dajani. "This transaction will help CTI establish a presence in an important region for us, and we look forward to utilizing the synergies of both companies to gain a competitive advantage in Semen Batam's main markets and across the region as a whole."
ArqaamArqaam
worked closely with CTI to help the company explore strategic options to expand its overseas markets. "ArqaamArqaam's expertise in working the various issues of cross-border transactions, including structuring, governance issues and the regulatory environment were instrumental in the success of this deal," Mr. Dajani said.
The deal highlights Dubai's role as a bridge for investment between mid-cap companies in the Middle East and East Asia - regions that stand out for their economic resilience and growth at a time when most nations are still reeling from the effects of the global financial crisis.
Bosowa, the only privately-owned cement manufacturer in Indonesia, said that the CTI investment will help Semen Batam improve operating efficiency at its plant.
"With the economic recovery, cement consumption is expected to climb in the Southeast Asia region and in Indonesia, in particular. To position ourselves to take advantage of the likely growth in cement consumption, it was imperative that we explored strategic partnerships with credible, global players in the cement space who would support our expansion plans and help us grow further," said Erwin Aksa, President Director of Semen Batam.
Arqaam CapitalArqaam Capital acted as the exclusive financial advisor to CTI on this transaction. Terms of the transaction were not disclosed.
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About Bosowa Corporation
Bosowa was founded in 1973 by Mr. Aksa Mahmud, one of the leading entrepreneurs from eastern Indonesia. Bosowa Corporation was set up as the holding company of the Bosowa Group and is currently headed by Mr. Erwin Aksa, President Director, who is also the eldest son of the founder. Bosowa is involved in various lines of business, including cement, automotive, property, resources, and infrastructure, and is planning to expand into mining, plantation and forestry. For further information on Bosowa, please visit http://www.bosowa.co.id/.
About Semen Batam
Located in Kampung Baru, Batam, Riau Island province, Semen Batam's cement grinding plant was inaugurated on December 2, 2008. Construction of the plant started in 2006 and was completed in early 2008. Currently, PT Semen Batam has an annual production capacity of 1.2 million tons of cement, and the plant boasts state-of-the art technology and equipment from Germany, China and Indonesia. The plant has a loading and unloading harbor equipped with a 150m jetty capable of handling ships of up to 30,000 DWT, and two silos for the storage of raw materials, including storage capacity for 75,000 tons of clinker and 20,000 tons of gypsum and trass. The plant has two bulk loading facilities and packing equipment with a cement packing capacity of 2,500 tons per day.
About CTI GroupCTI Group Inc.
Founded in 1990 and headquartered in Amman, Jordan, CTI was established as a cement and clinker trading company. Continuous growth in its market share and a steady acquisition of physical assets have made the company a leader in the cement sector. Today, CTI has diversified into all aspects of the cement value chain through horizontal and vertical integration and into other lucrative businesses to ensure the cost effectiveness and improved performance of its core competence of cement and clinker trading. CTI's current fleet size stands at 21 ships, of which nine are bulk carriers and the remaining 12 are cement floating terminals or cement carriers. For further information on CTI, please visit www.cti-grp.com.
About ArqaamArqaam Capital
Arqaam CapitalArqaam Capital is a strong, fast-growing player in the investment banking world, bringing regional and international product offerings to the Middle East. Arqaam CapitalArqaam Capital creates and generates investment transaction opportunities and manages risk portfolios with a capital intermediation platform that facilitates access - for Middle Eastern investors looking to invest in the region and internationally, and for international investors looking for opportunities in the Middle East. Arqaam CapitalArqaam Capital operates out of offices in Dubai and London. Its headquarters are in the Dubai International Financial Centre, and it is authorized and regulated by the Dubai Financial Services Authority. Arqaam CapitalArqaam Capital has seven business lines - Equity Derivatives, Credit, Treasury, Brokerage, Corporate Finance, Asset Management and Custody. Further information on ArqaamArqaam is available at www.arqaamcapital.com.
Mr. Tamer Makary, Executive Director of Arqaam CapitalArqaam Capital, said: "The successful completion of this transaction shows our ability to leverage the strength of our relationships in the MENA region and internationally and to structure and execute complex cross-border transactions efficiently and within tight timeframes."
For more information, please call:
Arqaam CapitalArqaam Capital
Eleonora Uggé, Marketing Department
Tel. +971 4 365 1858
Email: marketing@arqaamcapital.com
Hill & Knowlton
Nick Farmer, GCC & Middle East
Tel. +971 4 405 5671
Email: nick.farmer@hillandknowlton.com
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