PT Semen Indonesia is considering the possibility of constructing a cement plant in Papua to meet demand potential in the country’s eastern-most province and reduce distribution and logistic costs.

Dwi Soetjipto, Semen Indonesia president director, told local press that the plant would either be located in Jayapura or Manokwari, the two largest cities in proximity to a limestone quarry.

"We hope the study can conclude soon so that we can include the investment needed for the plant in our next year's capex [capital expenditure] budget. It might take around three years to construct the facility before it can commence commercial operations," local press quoted him as saying.

According to Semen Indonesia's estimates, Papua consumes around 0.6Mta of cement, or 40 per cent of the total eastern Indonesia cement consumption of 1.5Mta.

The company, which currently supplies about half of the Papua market, hopes the new plant will help increase its market share in the region which holds much demand potential given its infrastructure requirements.  "There is a serious need to develop infrastructure in Papua and we might see demand for building materials there to increase gradually. By establishing our own factory there, we hope to dominate at least 70 per cent of the market in the region, as well as cutting the transportation costs needed to ship our products there."