PT Semen Gresik says it will start constructing a cement plant on the island of Java next year at a cost of IDR2.802 trillion. A written statement says the new plant, due to be completed in 2011, will have a capacity of 2.5Mta of cement, raising the company’s total capacity to 15.82Mt.
Internal cash will cover 35 per cent of the cost and a loan from a bank or other financial institution will cover the rest.
In the new plant’s first year, the company’s sales volume is expected to increase by 1.8Mt, assuming that the plant will operate at 70 per cent of capacity.
"The operation of the new plant will automatically increase the company’s revenues and subsequently the company’s profit margin," the statement says. Construction of the new plant is in line with the company’s aim of increasing shareholder value and supporting the government’s infrastructure plans, according to the statement.
"The company and national production capacity is projected to face a shortage in the next few years," it says.