Semen Gresik wants to increase production
The Jakarta Post, Jakarta - 12/03/2011
Indonesia’s largest cement producer, PT Semen Gresik, targets to produce 20 million tons of cement this year, an 8.11 percent rise from 18.5 million tons in 2010 to meet rising domestic demands for cement.
The Indonesian Cement Association earlier estimated that the domestic cement consumption would increase by 6 percent to 42.4 million tons this year from 40 tons last year.
Semen Gresik president director Dwi Soetjipto said Friday that to meet the target, his company
would boost the production of its existing plants in Padang, West Sumatra; Gresik, East Java; and Tonasa, South Sulawesi.
“We expect our revenue to grow by 10 percent and profit by 15 percent this year with the additional production of 1.5 million tons from our upgrading capacity projects,” he said after an extraordinary shareholders’ meeting in Jakarta.
According to the company’s data, its net revenue reached Rp 10.29 trillion (US$1.17 billion) in the first three quarters of 2010 with a net profit of Rp 2.52 trillion.
The meeting approved a change in the board of directors to support its future development plan with two new positions: Human resource director Bambang Sugeng SI and strategy and business development director Erizal Bakar.
Dwi said that as part of its expansion plan this year, his company was finishing two cement plants in Tonasa and Tuban with an annual production capacity of 2.5 million tons each and a 2x35 megawatt power plant in Tonasa to support its future operation.
“By February, we had already finished 79.3 percent and 78.4 percent of our plants in Tonasa and Tuban,” he said. Both plants are expected to commence operation in 2012.
Dwi said in the near future Semen Gresik planned to build two other plants in West Sumatra in 2011 and Central Java in 2012. Currently the company is conducting feasibility studies for the new plants.
“Hopefully, we can propose one of the feasibility studies in our shareholders’ meeting in June,” he said.
Earlier, the company said it would invest $300 million in West Sumatra and Rp 3.5 trillion in Central Java, with around Rp 1 trillion to Rp 2 trillion to be externally-sourced from bank loans.
Apart from the plan, Dwi said, his company was allocating $500 million to acquire two cement companies this year in a move to enhance its production capacity over the next few years.
Dwi said with such an investment, his company could add another 2.5 million tons to its total production.
Earlier, the company reportedly was negotiating the acquisition plan with two Malaysian firms, one of which was Cement Industries of Malaysia Bhd., which controls 18 percent of the Malaysian cement market, according to an internal source with knowledge on the issue.
Last year, Semen Gresik was nominated to buy a stake in PT Semen Baturaja in South Sumatra following options given by the State-Owned Enterprises Ministry on whether the company would merge with Semen Gresik or sell shares through an initial public offering.
Dwi said that Semen Gresik was expected to play a bigger role in Semen Baturaja by controlling more than 50 percent of the latter’s shares.
This move will allow Semen Gresik to expand and focus on its core business. (lnd)