President of PT Semen Baturaja, Pamudji Rahardjo, announced that the state company would bring its second cement plant online next year. The Baturaja II plant is currently under construction with a planned production capacity of 1.85Mta.
The new plant represents a IDR3.4tn (US$254.5m) investment. The funds will be raised partly (IDR1.27tn) via initial public offering, IDR1.3tn in loans and the rest put up by the company.
"Currently we are facing weak demand in the country’s cement market amid subdued economy. In the third quarter of 2016, the country’s total cement sales grew only 3.8 per cent. Data from the Indonesian Cement Association showed that cement supplies in the country totalled only 43.1Mt in the first nine months of 2016. Meanwhile, total consumption this year is estimated at only 45.9Mt," Mr Rahardjo said.
Despite a weaker demand, planned plants across Indonesia are expected to raise country’s installed production capacity from 77.62Mta at the end of 2016 to 96.23Mta in 2017.
