State-run cement producer Semen Indonesia is planning to spend US$300m to establish a new plant in Vietnam as part of its business expansion in southeast Asia. The new facility will be in the south of the country, near the company’s limestone mine.
Semen Indonesia's president director, Dwi Soetjipto, said Semen Indonesia hopes to expand the production capacity of TLCC, its Vietnamese subsidiary, by establishing a new 1.5Mta plant. He added that plant construction would start early next year and it would take around three years to complete.
The investment for the new plant is estimated to be around US$250m to US$300m, most of which will be sourced from bank loans. Mr Soetjipto said that to strengthen Semen Indonesia’s position in Vietnam, the group had to either look for a firm smaller than TLCC to acquire or enhance the Vietnamese company’s production. “Thang Long has utilised 100 per cent of its production capacity, which means we have to expand and add a new plant to cope with market demands,” he told reporters.
Just like the existing plant, the output of the new facility will be allocated for the Vietnam market and for exports to other ASEAN countries such as Singapore, Cambodia, Laos and Myanmar. Bangladesh and Sri Lanka are also Semen Indonesia export targets, Mr Soetjipto said.
TLCC’s current production capacity stands at 2.5Mta. Once the new plant starts its commercial operations, Semen Indonesia will produce 4Mta of cement in Vietnam.
He added that Semen Indonesia was also looking to take over a grinding mill in Bangladesh, currently studying several companies that hold potential to be acquired. Semen Indonesia saw its revenue from exports rise from US$73.21bn to US$1.13trn last year.