JAKARTA: State-owned cement producer PT Semen Indonesia has set a target to increase its production capacity to 30 million tons in 2016 from the projected 28.5 million tons in 2015.
Earlier known as Semen Gresik, PT Semen Indonesia is the largest cement producer in Indonesia, with several plants on the islands of Java, Sumatra, and Sulawesi.
The cement plants are all supported by a distribution network that covers the entire country.
The publicly listed cement companys Chief Executive Officer, Suparni, remarked in Jakarta on Thursday that Semen Indonesias production from the existing packing plants was projected to reach 28.5 million tons until the end of 2015.
“In 2016, the production capacity of PT Semen Indonesia will increase to 30 million tons, or to rise by five to six percent than that in 2015,” Suparni stated after speaking at the State-owned Enterprises (BUMN) Forum on “BUMN Synergy to Transforming Indonesia.”
He noted that all existing plants — Semen Padang in West Sumatra, Semen Gresik in East Java, and Semen Tonasa in South Sulawesi — will cumulatively produce 30 million tons of cement in 2016.
According to Suparni, Semen Indonesia will continue to increase the number of packing plants to support the increase in the companys production capacity.
Moreover, he explained that the production capacity will also be supported by the existing special seaports and the network of more than three hundred distributors in various regions across the country.
“Production growth is driven by high domestic demand in line with the development of government infrastructure projects coupled with the increase in retail demand,” he affirmed.
He explained that production growth in future will continue to increase as until the second semester of 2015, the nations cement consumption continued to improve in the eight percent range.
“Although there was five percent decline in the first semester of 2015, it increased in the second semester, and this trend is expected to continue in 2016,” Suparni remarked.
Further, he explained that total production of some 30 million tons in 2016 will be used to meet the domestic market demand.
“PT Semen Indonesias production is almost entirely intended to meet the domestic demand, and even if it is exported, it is only about five to six hundred thousand tons, or some two percent of the total production,” he noted.
Suparni revealed that by 2016, the company is targeting to achieve a revenue growth of about five percent in line with the growth in production volume.
The strategy used by the company to achieve the aforementioned revenue target is by improving efficiency in production supported by the decline in the prices of fuel oil and electricity tariffs, as well as by increasing distribution efficiency by utilizing the packing facility, among others.
Suparni earlier noted in November that PT Semen Indonesia was conducting a feasibility study in Aceh in connection with its plan to build a cement factory in Pidie district.
“We are ready to build a cement factory in Aceh. We are now in the process of completing the feasibility study. The groundbreaking ceremony is expected to take place next year if all the processes run well,” Suparni stated.
He noted that around Rp3.5-4 trillion will be invested to develop the plant, which is expected to have a capacity of three million tons, excluding the infrastructure cost.
According to Suparni, the company will set up a joint venture for the project with a local company in which PT Semen Indonesia will later be the majority stockholder, with more than 70 percent shares.
