Indonesian cement companies being encouraged to increase production

Indonesian cement companies being encouraged to increase production
Published: 20 February 2008

The Indonesian government is encouraging state-owned cement companies to increase their production capacities to keep up with domestic demand which is growing by seven percent per year and expected to reach 60Mt in 2013, a minister said.

"Growth in domestic demand for cement is now seven percent per year and absolute demand now stands at 39Mta," Industry Minister Fahmi Idris said here Tuesday.

With an annual growth rate of seven percent, domestic demand for cement would reach 60Mt in 2013 so there was a need to increase production, Fahmi said.

The production capacity of existing cement companies now was only 47Mta, he noted.

A few state-run cement companies, including Semen Gresik Group, were planning to increase their production capacities, the minister said.

"PT Semen Gresik will increase its production capacity by 2.5Mta under a project to be completed in 2010," he added.

Similarly, PT Semen Gresik’s affiliate companies PT Semen Tonasa and PT Semen Padang would also increase their production capacities by 2.5Mta each.

"The project to increase procution capacity in PT Semen Tonasa will be finalised in 2010 and that in PT Semen Padang in 2011," the minister said.

In addition to the three companies, the government was also inducing other cement makers such as PT Semen Baturaja and PT Semen Kupang to raise their production capacities.

Currently, production capacity of PT Semen Kupang and PT Semen Baturaja reached 570,000t and 1.25Mta respectively.

Some private producers such as PT Indocement Tunggal Prakarsa would also increase their production by 2.5Mt. "The project will be finished in 2010 and it will be developed in South Kalimantan," he said.

PT Holcim was planning to expand its factory in Tuban, East Java in 2011 with production capacity of 2.5Mta and PT Semen Andalas to expand its production facilities in Bahorok, North Sumatra.