Indonesian cement production forecast to reach 65Mta next year

Indonesian cement production is forecast to hit 65Mta in 2013, up seven per cent on this year’s target of  60.56Mt thanks to volume additions by domestic and new market entrants.

The Jakarta Post cited Panggah Susanto, the Industry Ministry’s director general, as saying that the country’s cement makers will also increase production capacities and optimise their manufacturing plants. Panggah said that the presence of several new cement makers, which have already gained approval from the Investment Coordinating Board (BKPM), will boost cement production in the country.

Several Chinese companies have announced plans to build cement plants in Indonesia. Anhui Conch Cement Co. is reportedly planning to build plants in South Kalimantan, East Kalimantan and Papua, which would produce a combined 10Mta. China Trio Int Engineering will build a cement plant with production capacity of 1.5Mta in Subang, West Java. Chinese State Development and Investment Cooperation (SDIC) also plans to build a cement plant in Papua with expected output of 1Mta. Panggah said that Siam Cement, Thailand’s biggest cement producer, also plans to build a plant in Sukabumi, West Java, with a production target of 1.8Mta.

Domestic cement makers like Semen Bosowa Maros plans to increase its production from 1.8Mt to 3Mt. Erwin Aksa, the chief executive of Bosowa group, said that total investment for the company’s cement plant is valued at IDR4trn (US$421m). The construction of Bosowa’s cement plant is expected to start in November and will be completed in August 2014.

“A license has been given by the government,” Erwin said, referring to a license granted by the BKPM. There are more than 10 cement makers in Indonesia including Semen Gresik, the country’s largest. Data from Indonesia’s cement association showed that cement production rose 10.3 per cent to 34.46Mt in the first seven months of 2012.