Holcim says plant closure will not affect output

Holcim says plant closure will not affect output
Published: 26 September 2005

PT Semen Cibinong, a unit of Holcim, said the planned closure of one of its plants for seven months will not affect the company’s total cement output as it will raise production at its other plant. Semen Cibinong will suspend operations at a plant in the Central Java town of Cilacap from next month until April 2006, said Deni Nuryadain, a spokesperson for the Cilacap plant, confirming a media report.  
’We will increase production from the second plant, so there will be no disturbance to the market,’ Nuryadain said.  He said the suspension is necessary to switch the plant’s power source from fuel fired generators to state electricity firm PT Perusahaan Listrik Negara (PLN). 
The switch will reduce the plant’s energy costs in the wake of higher prices of industrial diesel oil, he said.   Most industrial users have been paying fuel at full market prices since July from 75 pct of market prices previously. The government raised the prices to reduce fuel subsidy costs amid rising world oil prices.   Nuryadain declined to estimate the cost of switching to PLN’s electricity.  
He said Cilacap’s second plant has adequate idle capacity to offset any drop in output from the closure of the first plant.  Semen Cibinong has a total installed cement capacity of 9.7Mt. Holcim, through Holcim Participations (Mauritius) Ltd, owns 77.33 per cent of Semen Cibinong.