Indonesia: Holcim's Tuban II plant will raise exports

PT Holcim Indonesia Tbk is on course to open the new Tuban II plant at the end of 2015 with an investment of US$350m. The new plant will help the company to explore more markets overseas as the combined capacity of Tuban I and II rises to 12.5Mta.

PT Holcim Indonesia has a strategy to go after new business in the region. The company will seek to increase market penetration in a number of areas in East Java and outside Java such as in Kalimantan. Diah Sasanawati, corporate communications manager of Holcim, said. To anticipate the weakening domestic demand for cement, Holcim plans to export products to Vietnam, the Philippines and Africa.

Kent Carson, finance director of Holcim, said that for the past three years, the company has been agressively expanding production by building two new plants, Tuban I and II, with a total investment of US$850m. It was the company’s largest investment in the last four years.

This year, the company lowered its annual capital spending by 25 per cent to US$250m, compared to last year. This was done in line with the completion of Tuban plant II. Thus, the funds will be used to support several plan facilities.

Throughout the first quarter of 2015, Holcim posted a net profit decline by 90 per cnet to IDR32bn from the same period the previous year with IDR323bn. The decline was partly due to lower sales coupled with the increase in costs.

Meanwhile, PT Semen Indonesia Tbk, Indonesia's largest cement maker, plans to allocate US$4.27bn for capital expenditure from this year to 2019, the Investor Daily reported, quoting finance director Ahyanizzaman.