Orascom Construction Industry, a cement manufacturer from Egypt, was assessing three locations to develop a cement plant with the total capacity of 2.5Mta with the total investment of IDR3trn.
The Director General of Chemical and Agro Industry of the Industrial Ministry, Benny Wahyudi, said that the locations were in Cibadak (West Java), Semen Gombong (Central Java) and South Sulawesi.
"I advise the company to cooperate with local businessmen, especially those who already have licenses to develop certain areas," he told Bisnis Indonesia.
It was PT Baloci which already held the license to exploit the mining site of Cibadak, while the holder of mining license in Gombong was a unit of PT Medco Energy International.
Benny said that the company would sell the product at the local market as Indonesian market was still growing. Last year Indonesian cement market grew by 10 per cent.
"It is almost impossible for the company to export the product as the transportation cost is to expensive due to the heaviness of the product," he said.
In a bid to speed up the realisation of the investment, the Ministry of Industry might give tax incentive to the investor by referring to the Regulation PP No.148.
"Based on the regulation, in investor can get tax reduction of up to 30 per cent of the investment cost. The ministry of finance is still discussing such facility," he said.
The Ministry of Industry was also considering supporting the company to get gas, as Orascom wanted to develop an environmentally friendly cement plant.