Semen Baturaja expecting higher sales

Indonesia state-owned cement producer Semen Baturaja is anticipating higher sales this year following the start-up of operations at its new line together with  government infrastructure projects.

“Additional production will occur in July with the operation of our new factory,” Semen Baturaja president director Rahmad Pribadi told local press on Thursday. “Our existing [production] capacity has been fully absorbed by the market and we will have additional capacity in the second half to boost our sales.”

The company expects to achieve a 33 per cent rise in sales to IDR2trn (US$150.6m) this year following 4.1 per cent growth in 2016.

The new plant, located in Baturaja, Palembang, South Sumatra, is expected to produce 550,000t of cement this year. The plant will produce an estimated 1.85Mta of cement, allowing Semen Baturaja to reach its production capacity target of 3.85Mt.

Semen Baturaja projects to produce 2.1Mt of cement by the end of the year, a significant increase compared to 1.6Mt produced last year. Thus, its net profit is also projected to nearly double to approximately IDR500bn by December.

Rahmad said his firm was not concerned about the declining cement market in Indonesia because the markets in southern and central parts of Sumatra, in which Semen Baturaja operates, had different characteristics.

While other markets in eastern parts of the country, such as Kalimantan, Sulawesi and Papua, contracted, those in southern and central Sumatra continued to increase, he said. “This was because of support from the government’s infrastructure projects,” he said.