PT Semen Baturaja will open a new plant in 2017 and targets strong sales

A major growth area for state-owned PT Semen Baturaja is South Sumatra, where the company has signed contracts with several firms to build a new plant called Baturaja II in anticipation of increasing construction projects in the province.

Project developments and construction in South Sumatra continues to increase ahead of the 2018 Asian Games, including a light rail transit project, overpasses, sports facilities and hotels.

Zulkifli Subli, PT Semen Baturaja 's corporate secretary, explained that the plant construction would cost IDR3.3trn, IDR1.5trn of which would be borrowed from state-owned banks. The new plant is expected to begin operation in the first half of 2017, with a production capacity of 1.85Mta.

PT Semen Baturaja is targeting a 16 per cent sales increase this year to IDR1.7trn (US$128m) from IDR1.46trn in 2015.

Zulkifli Subli said the company expected to see its sales volume grow 13.8 per cent to 1.75Mt this year, up from 1.54Mt last year.

“At this [growth] rate, the company will achieve this year’s revenue target,” he said after an annual shareholders meeting in Jakarta.

The company received sales of 317,166t of cement in the first quarter of the year, a five per cent YoY increase from 302,031t in 2015, he continued.

To meet local Indonesian demand, Semen Baturaja has signed an agreement with Kereta Api Logistics (Kalog) – a subsidiary of state-owned railway operator Kereta Api Indonesia (KAI) – to increase its cement distribution from 280tpd to 800tpd.