South Korean investor plans to develop Indonesian plants

South Korean investor plans to develop Indonesian plants
Published: 20 October 2008

Two South Korean investors have sounded plans to develop new cement plants in the Indonesian province of Papua with a total capacity of 3Mta. Their total investment is estimated to reach US$350m.

"The South Korean investors are really enthusiastic and interested in developing cement plants in Papua. One of them is seeking local partners," told Minister of Industry Fahmi Idris yesterday.

According to him, the Department of Industry was reviewing the plans. The review covered identification of raw and supporting materials, sources of energy, infrastructure availability, location, marketing, and environmental aspects.

Director General of Agro and Chemical Industries at the Department of Industry Benny Wachjudi continued one of the South Korean investors was PT Semo Building, which would build partnership with PT Segara Sumber Optima.

In the first year, they would develop a cement plant with a capacity of 1Mt. "In the second year, the capacity will be raised to 3Mt with a total investment of US$350m," Benny said yesterday.

In the meantime, another South Korean investor would join hands with Freeport.

PT Freeport Indonesia spokesperson Mindo Pangaribuan explained the cement plant project was still undergoing feasibility study.

"Since the feasibility study is still running, we cannot expose more about the project."

Record by the Department of Industry showed PT Semen Bangun Harjo was also interested in developing a cement plant in West Papua with a capacity of 100,000t. In addition, the Papua Provincial Government and PT Freeport Indonesia would also spend US$200 million on a cement plant in Timika with a capacity of 1Mt.

The Papua Provincial Government and Freeport, he added, had signed a MoU on the plan. "The plant will make use of tailing coming from the wastes of copper and gold processing residue from Freeport," he said.Based on the early feasibility study, added Mindo, the cement plant would be able to operate efficiently and make its cement products cheaper by 30%-50%.

The cement plant development projects in Papua are part of the Papua Provincial Government’s plan to have two big projects, namely construction of cement plants with a total capacity of 1Mt and 1000MW hydro power plant.

Chairperson of the Indonesia Cement Association (ASI) Urip Timuryono revealed various new cement development projects in Papua might be hard to realise since the Papua provincial government had no proper infrastructures, such as decent access to the port and good electricity supply.

"This is unfortunate as the cement plant projects in Papua are highly strategic to meet cement consumption in the Indonesian eastern zone [Maluku and Papua], which currently reaches 60,000-120,000tpa."