Indocement to invest US$109m on expansion

Indocement to invest US$109m on expansion
Published: 09 May 2012

PT Indocement Tunggal Prakarsa, part of the HeidelbergCement group, is to spend more than IDR1trn (US$109m) this year on expansion, according to reports in the Jakarta Post.

Following the company’s annual and extraordinary shareholders meeting on Tuesday, director Kuky Permana, said that one of the company’s main projects would be the construction of a new 4.4Mta plant in Citereup, Bogor, West Java. Indocement would also construct cement mills with a total capacity of 1.9Mt, he said.

Indocement is also in the final stages of feasibility studies for plans to construct another two cement plants in green-field areas in Central Java and outside Java.

"We cannot specify the exact location of a new plant outside Java yet. But, we have done research that explored many areas," Kuky said.

The company is hoping to start the construction of two new cement plants in 2016 or 2017, after it completes the construction of the Citeurep cement plant in 2015. The two new plants will each have capacities of 2-2.5Mta.

Other projects to be carried out this year include the construction of ports in Samarinda, East Kalimantan, and Banyuwangi, East Java, in May. The port at Banyuwangi is expected to support the company's distribution to Bali and Nusa Tenggara. The company is also studying the possibilities of developing another port in Pontianak, West Kalimantan.

During the first quarter of 2012, Indocement reported a 24.9 per cent increase in sales to 4.1Mt, while its market share stood at 32.5 per cent compared to 30.7 per cent in the same period last year. The company is hoping to report further growth in the second quarter of the year, with an expected increase of 18 to 20 per cent in sales.