Semen Indonesia considers cement plant in Papua

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Indonesia: PT Semen Indonesia is considering the construction of a cement plant in Papua in a bid to supply the market in the country's easternmost province. Semen Indonesia president director Dwi Soetjipto said the location of the plant would be either in Jayapura or Manokwari, the two largest cities close to limestone reseerves, according to local media. The plant will have a cement production capacity of 0.6 – 1Mt/yr with an investment of up to US$100m.

"We hope the study can conclude soon so that we can include the investment needed for the plant in our next year's capital expenditure budget. It might take around three years to construct the facility before it can commence commercial operations," said Dwi Soetjipto.

According to Semen Indonesia's estimates, Papua consumes around 600,000t/yr of cement, or 40% of the total eastern Indonesia cement consumption of 1.5Mt/yr. Semen Indonesia supplies around half of Papua's cement market. With the new factory, it is expected to increase its market share to around 70%.

The company has projected that cement demand in Papua will hit around 900,000t/yr from around the time the company has finished building its new plant.

Increasing its market share in the region will place Semen Indonesia in competition with Indocement Tunggal Prakarsa and Semen Bosowa. Currently the company supplies the Papua market from its subsidiaries Semen Gresik in East Java and Semen Tonasa in South Sulawesi.

In 2013 Semen Indonesia built a rotary packing plant in Sorong, West Papua at a cost of US$13.8m. The plant produces 2200 bags per hour and currently supplies 300 - 400t/day of cement to the West Papua area.

Last modified on 24 September 2014


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