Andalas seeks to double cement output

Andalas seeks to double cement output
Published: 17 January 2005

In view of the estimated rise in demand for cement in years to come, cementmaker PT Semen Andalas Indonesia (SAI) will speed up plans to build a plant in Langkat, North Sumatra, while reconstructing its heavily damaged facility in Lhok Nga in Aceh.    SAI president Thomas Ehrhart said on Friday the company, 99 per cent owned by Lafarge, had for some time planned to build a second plant near Medan.    "We halted the plan in 1998 when the monetary crisis hit," he said. The dollar skyrocketed against the rupiah at that time and sent the construction industry into a tailspin after enjoying a boom in the previous years.  

Studies to exercise options to build another plant resurfaced last year. The intention got even stronger following the recent calamity in the province, in which the rebuilding of the badly damaged infrastructure would spur demand for certain products, including cement. "We’ll incorporate it (the planned new facility) into the rebuilding of our plant in Aceh," said Thomas.  

While the capacity of the new plant is yet to be determined, the company aims to increase its total output capacity in the country to 2.5Mta, from the 1.3Mt produced in its plant in Aceh, Thomas said.  

SAI’s facility in Lhok Nga, 25 kilometers west of Banda Aceh and around 250 km from the epicenter of the Dec. 26 earthquake, was severely hit by the tsunami. Parts of the plant were shattered, electricity is dead, while offices and employees housing do not exist anymore.   A technical team will be dispatched to make an assessment on the damages next week. "The losses will amount to tens of millions of dollars," said Thomas.  Rebuilding works, to be conducted in phases, will begin as soon as possible.  

Thomas said it would take about one year for the firm to return to its normal, pre-tsunami production, but ensured that the company would meet its commitments as well as its demand target.   "We have asked our sister companies in Asia, and managed to secure nearly all of the demand," said Thomas.   Cement will be shipped from Lafarge subsidiary in Langkawi, Malaysia, and packaged in SAI’s terminals in Lhokseumawe -- which has started operating again -- Belawan, and Batam in Riau Islands. The company also plans to make a floating packaging terminal offshore Banda Aceh within four to six weeks.