SG Forms Consortium with Indonesian State-Owned Companies to Expand Road Infrastructure Business

Specialized asphalt concrete (Ascon) company SG is expanding its road infrastructure business in Indonesia. Following the production of asphalt concrete through a local joint venture (JV), the company plans to form a consortium with Indonesian state-owned enterprises to extend its business scope to road construction and maintenance.

SG announced on September 23 that it is currently forming a consortium with Indonesian state-owned enterprises to pursue road projects. The company aims not only to manufacture and supply asphalt concrete at its local production base but also to establish the foundation to carry out a full spectrum of road infrastructure projects in Indonesia, including actual road construction and maintenance services.

Previously, SG has been negotiating a contract with POSCO INTERNATIONAL to set up a local joint venture in Indonesia. After securing a local production base, the company plans to expand its business by supplying the asphalt concrete produced in Indonesia to actual road projects, thereby connecting manufacturing with construction and maintenance.

In particular, SG is advancing a localization strategy aimed at lowering raw material procurement costs. Indonesia is regarded as a region where the cost of procuring natural aggregates necessary for asphalt concrete production is high. To address this, SG plans to produce eco-steel asphalt concrete by utilizing steel slag generated locally.

The structure involves sourcing raw materials and producing asphalt concrete locally, then applying these materials to actual road projects through the consortium. With this approach, the company seeks to reduce the cost burden associated with securing natural aggregates while simultaneously strengthening its local production and road project execution capabilities.

The Indonesian government's ongoing capital relocation and large-scale infrastructure investments are also projected to create opportunities for SG's local expansion. With the construction of road networks connecting major regions—including the new capital Nusantara—already underway, as well as ongoing maintenance of existing roads, the company anticipates consistent, mid- to long-term demand for asphalt concrete.

SG plans to establish an integrated business structure linking its local joint venture and consortium with state-owned enterprises, covering everything from raw material procurement and asphalt concrete production to road construction and maintenance. Based on this structure, the company aims to respond to infrastructure projects such as those related to the new capital, new road construction, and maintenance of existing roads.

An SG representative stated, "We plan to build a business system that connects local production bases via joint ventures and consortia with state-owned enterprises, covering everything from raw material procurement and production to construction and maintenance. On this foundation, we will proactively respond to major road infrastructure projects, new road construction, and road maintenance projects, including those related to the new capital."

SG intends to combine local production and road project execution capabilities in Indonesia, expanding its business foundation beyond asphalt concrete supply to encompass construction and maintenance, thereby positioning itself as a comprehensive local road infrastructure provider.

This content was produced with the assistance of AI translation services.