Gresik investment cancelled

Publicly listed cement producer PT Semen Gresik said it has decided to cancel a US$200m expansion plan in eastern Indonesia as the project is not feasible, according to local news reports.

Management of the company earlier discussed a plan to build cement factories in Papua and East Nusatenggara.  Regional administrations in Papua and East Nusatenggara have offered to provide locations having large deposits of limestone to feed the factories, but annual consumption of cement in the regions has declined to six per cent from 12.5 per cent before the crisis hit the country in 1997.  Satriyo said a cement factory would be feasible if it has a market that could absorb at least 1Mt of cement a year. He said no bank is expected to support a project which is not feasible from the market point of view.