PT Semen Indonesia - June 2014

Semen Indonesia, which includes subsidiaries Semen Gresik, Semen Padang and Semen Tonasa, saw sales rise 4.5 per cent to 10.5Mt in January to May this year. The company, which is the largest cement producer in Indonesia, currently has a 44 per cent share of the country’s cement market and is planning to increase its total cement capacity to 40Mta over the next three years.

Along with investments in Singapore, Cambodia, Laos and Myanmar, the cement producer has also announced plans to build a US$300m cement plant in Vietnam. The firm currently holds a 70 per cent stake in Vietnam’s Thang Long Cement, which has an existing production capacity of 2.5Mta. Plans are to construct a new 1.5Mta works, which will come into operation in 2018. The company is also reportedly in talks to acquire a cement factory in Bangladesh, a purchase that it hopes to complete by the end of this year.

Meanwhile, work has begun on Semen Padang’s Line 6 at its Indarung plant in West Sumatra, Indonesia. The new 3Mta line, the main contract for which has been awarded to FLSmidth, is due to commence production in 2H16. Claudius Peters Projects is to supply two new cement storage silos to the plant along with two packing plants. The scope of supply includes two type IC silos with inspection chambers, each with a diameter of 20m and a volume of 9000m3.

The company is also considering construction of a 100MW coal-fired power plant at the Indarung works following the Indonesian government’s moves to raise electricity prices by at least 38.9 per cent from 1 May this year. According to Semen Indonesia, in 2013 its energy usage rose by 13.2 per cent YoY with electricity costs jumping 30.1 per cent to IDR1.88trn (US$155m). Construction of the new power plant is expected to begin in 2015.

Semen Gresik is also building a new cement plant, which is due to start operations in 2016. The 8000tpd greenfield works just outside the city of Rembang in central Java is being partly financed by Semen Indonesia to the tune of IDR5trn. Semen Gresik has also secured an IDR1.4trn letter of credit facility from Bank Mandiri to help cover construction costs.