Semen Gresik to build 2.5Mta plant in Myanmar

State-owned Indonesian cement producer PT Semen Gresik, is reportedly expanding its operations into Myanmar by constructing a new plant as part of government expansion plans involving state enterprises.

The Indonesian cement producer plans a 2.5Mta cement plant at an estimated cost of IDR4.5trn (US$500m), according to company finance director Ahyanizzaman.

PT Semen Gresik is one of four state companies asked by the government under Indonesia Incorporated to expand operations to Myanmar. "Through ‘Indonesia Incorporated’ the companies will expand to Myanmar," deputy state enterprises minister for Infrastructure and Logistics, Mr Sumaryanto, said on Friday. He added that meetings have been held with companies to discuss their business expansion plans, according to reports by Asia Pulse.

"Now there is an opportunity for state-owned companies to enter Myanmar, as that country is now embarking on development efforts. It is also important for state-owned companies to act abroad," he said.

The other Indonesian state-owned companies involved in the expansion are PT Wijaya Karya (which is involved in property and infrastructure), PT Pertamina (development of gas fields) and Bank BNI which seeks to finance part of the investments of the state-owned companies.

Ahyanizzaman Semen Gresik chose to expand to Myanmar as demand for cement in that country is strong with supplies falling much short of demand. Political and economic changes in Myanmar are opening up opportunities and it is an important time for the cement sector. Domestic capacity currently stands at 3.35Mt and a number of new plant projects and expansion plans have been proposed to the Myanmar Investment Commission. Thai producers, Siam Cement and Siam City Cement, have also earmarked establishing cement plants in the country.