Indonesia: Baturaja to invest in new factory

Indonesia: Baturaja to invest in new factory
Published: 15 September 2010

State cement company PT Semen Baturaja announced it will construct a new cement factory in South Sumatra, absorbing IDR2.35trn (US$236m) in investment.

President director Pramudji Rahardjo told reporters Tuesday that a feasibility study was underway so as to have the factory in full operation by 2013.



Sahala Lumbang Gaol, the deputy minister for strategic industries and energy for the state-owned Enterprises Ministry, said the construction of the new factory was necessary as existing factories had been overwhelmed by demand.



Pramudji said this would boost Semen Baturaja capacity from 1.2Mta to 2.5Mta.



According to Pamudji, of the total investment needed, the company will disburse IDR50bn from internal capital, while the remaining capital will be taken from loans and an initial public offering (IPO).



He said that the company expected to raise IDR1trn from the IPO, planned for 2012.

“Banks will disburse IDR400bn next year and another IDR900bn in 2012,” he said adding that the company had received commitments from local and foreign banks for the project.