PT Semen Tonasa, a subsidiary of state-owned PT Semen Gresik, said it will build a new cement factory with an annual production capacity of 2.5Mta. The feasibility study on the project to be built at the company’s complex in Pangkep, South Sulawesi, is nearing completion, its President Sattar Tapa said yesterday. Work is expected to start in 2007, he said, indicating funding is not a problem as a number of banks have offered credits to finance the project, which is estimated to cost Rp3 trillion (US$333.8m). If the company concludes the new facility development, the total production capacity of Semen Tonasa will reach 3.5Mta.
Reportedly, an overseas company is ready to provide export credit facility of 15 years, with the interest of 3.5 per cent per annum, as the financing alternative to the development of Semen Tonasa’s new facility, a unit of Semen Gresik. But Semen Tonasa and the overseas company have not reached the deal as Semen Tonasa is considering of getting domestic financing to avoid the exchange rate risk.
"The development plan of the facility is under the finalization process by Semen Gresik, our parent company," he said in Pangkep - South Sulawesi yesterday. He said the company will use internal money as well as banking loan to develop the facility.
Sattar said at the present tome Semen Tonasa does not have any debt to pay so that many companies have offered some loans. "The only debt is only the one to the government, as much as IDR300 billion and it will be matured in 2012. The interest rate is SBI plus one point percent." (Bisnis News).