State-owned cement maker PT Semen Gresik (SG) says it will postpone construction of a new cement factory with an annual capacity of 2.5Mt due to weak demand in the country.
Construction of the Rp3.5 trillion (US$388m) project, originally scheduled to begin this year, will be postponed until next year, the company’s president Dwi Soetjipto said.
In addition, shareholders of the company have not given approval for the project, Soetjipto said.
The project is expected to be operational in 2011 when there is equal supply and demand, he said.
He said demand for cement in the country is weak with the slow progress made toward the implementation of the government’s infrastructure projects and high interest rate in 2006.