I'nesian firm plans $200m cement works
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Indonesia's largest cement producer PT Semen Indonesia Tbk (SMGR) says it will build a US$200-million (Bt5.87 billion) cement plant in Myanmar early next year as part of its expansion into the Southeast Asian market.
The company may pitch about $70 million for the plant, which it would set up with its Myanmar partners, as it aimed to control about a 40-per-cent stake in the planned joint venture, president director Dwi Soetjipto said on Monday.
“Out of the [$70 million], we may need between $40 million and $50 million in funds [from loans],” he told reporters after a discussion on the cement industry’s outlook in Jakarta. The rest would be internal cash but the company had also opened up the possibility of issuing bonds, he went on.
The construction of the cement plant, designated with a capacity of 1 million tons per year, is scheduled to start early next year, while operations are expected to begin in 2017, according to Dwi.
Based on the firm’s plan, the new plant will serve the Myanmar market and neighbouring countries like Thailand and Bangladesh.
The proposed plant in Myanmar, which is modernising its economy after decades of harsh military rule and is poised for rapid growth, is Semen Indonesia’s latest expansion plan into the regional market after Vietnam, in line with its intention to become a top regional player following the change of its name from Semen Gresik.
Late last year, the firm acquired Vietnam’s largest cement producer, Thang Long Cement Joint Stock Company, from the Hanoi General Export-Import Joint Stock Company (Geleximco) and now aims to expand its annual capacity to 6.5 million tonnes from 2.3 million tonnes by establishing two new plants.
Apart from overseas expansion, Semen Indonesia is also gearing up for its domestic capacity upgrade, which will be carried out through the construction of cement plants in Rembang, Central Java, and Padang, West Sumatra, both with production capacities of over 2.5 million tons.
This year, the firm targeted up to a 44 per cent share of the domestic cement market, up from 41 per cent last year, supported by increased output to around 27 million tonnes from 22.6 million tonnes last year, according to Dwi.
