PT Semen Gresik is planning to start construction of a new cement plant next year at a cost of more than 3 trln rupiah, finance director Cholil Hasan said. At this stage the company is finalizing a feasibility study to determine the size of the output, location and investment cost, he said.
"By the end of this month, we will propose it to the board of commissioners," Hasan told reporters.
The company will still need to secure shareholder approval and attend to other preparations for the rest of this year, he said, adding the construction period may take 30 months. State-run PT Bank Mandiri has been reported as saying it is ready to provide funds to Semen Gresik for use in building a new plant.
Hasan estimates nationwide demand will exceed industry capacity of roughly 40Mt by 2009.
"Assuming that demand rises at a pace of 6 per cent per annum, then the industry will need to increase capacity by 2.4Mta from 2009, or one new plant every year," he said.
Semen Gresik may have to build two or three more new plants, he said.