Weaker rupiah impacts Semen Baturaja plant plans

PT Semen Baturaja is having to adjust its plan to develop a new factory due to the weakening of the rupiah against the US dollar.

According to reports by the Jakarta Post, that the purchase of equipment, which makes up about 40-50 per cent of total investment costs, could be delayed.

Semen Baturaja president director Pamudji Rahardjo told the newspaper that the company was working on a new valuation of the investment with higher exchange rate, as the currency has passed 11,000. The currency dropped by 3.2 per cent and stood at 11,515 per dollar on Tuesday, according to prices from local banks compiled by Bloomberg.

However, Mr Rahardjo added that the company would delay spending for machinery and reduce the plant capacity so that construction will start on schedule. "We cannot postpone the plant construction because developing a cement factory needs time. We may see pressure now, but things can be better next year," he said.

The new plant is expected to begin operations in the fourth quarter of 2016.