PT Semen Padang, the West Sumatra unit of the country’s largest cement maker PT Semen Gresik, plans to construct a new cement plant, starting next year, to meet future rising demand. In its recent report to House of Representatives Commission V for trade and industry, the state-owned company said that the plant was estimated to cost US$345m, with a construction period of around 36 months. Semen Padang said that the new plant, known as the "Indarung VI" project, would have an installed capacity of 2.3Mta.
Semen Padang said the reason for the construction of the new plant was to anticipate soaring demand, both at home and in the export market, starting in 2009 or 2010. The company said that assuming the local economy would grow at around eight per cent per year during the period, cement demand at home was projected to soar to 46.5Mta compared with the current 27.5Mta, while exports would jump to 12Mta to 15Mta.
Semen Padang reportedly produced 4.55Mt of cement last year, down from 5.01Mt in 2002. Next year, the company will start carrying out an environmental impact assessment for the plan, designing the machinery and preparing infrastructure and the mining site. However, it remains unclear how the company will finance the project.