Gresik projects 2007 net Profit at IDR1.7trn, discusses expansion plans

Gresik projects 2007 net Profit at IDR1.7trn, discusses expansion plans
Published: 26 February 2008

The Semen Gresik Group (SGG) is optimistic that its unaudited net profits in 2007 would reach IDR1.7 trillion, up by 31.78% from IDR1.29 trillion in 2006.   

SGG is going to spend a total US$1.6bn to construct new factories, boost capacity, and develop new power plants. It expects the mega-project to be completed in 2012.  
 
Vice President Director of PT Semen Gresik Tbk Rudiantara revealed the expansion plan aimed to boost the total design capacity of Semen Gresik from the current 17.1Mt to 23.6Mt in 2012. The measure, he continued, was made to anticipate the surge in domestic demand for cement by 6.7% per annum.  
 
According to him, SGG would spend US$355m and US$315m, respectively to build a new factory in Kudus (Central Java) and another new factory in Sulawesi. The two new factories are designed to have 5Mt in annual production capacity.  
 
He continued the company would also realize de-bottlenecking (machine modification) program to boost capacity to 1.5Mt.  
 
"The total amount of fund needed will reach US$1.6bn" he said on the sidelines of Semen Gresik Media Workshop last week.  
 
The company planned to complete the de-bottlenecking program in 2009 with a total investment of between US$70m and US$90m.  
 
Rudi added to support production activities the company would spend US$573m to develop 10 units of 410 MW coal-fired power plants. According to the plan, the coal-fired power plants will be prioritized in SSG’s business units, such as in PT Semen Gresik, PT Semen Padang, and PT Semen Tonasa. 
 
"We expect some of the coal-fired power plants can operate by 2010 in existing locations in Java, Sumatra, and Sulawesi," he inserted.  
 
In addition, SSG would spend US$25m to develop IT system and US$15m to develop human resources management.  
 
Rudi disclosed the three business units of SSG at the moment required 2.5Mt of coal and in 2011 the need would increase to 5.8Mt.  
 
Concerning the funding, Financial Director of Semen Gresik Cholil Hasan exposed of US$1.6bn needed, US$600m would come from internal cash and US$1bn from external sources.