The Bosowa Corporation has started operation of two new facilities in Banyuwangi, East Java, built with a IDR1.59trn (US$118.2m) investment as part of its expansion strategy this year.

The company has completed a cement grinding plant worth INR800bn and a liquefied petroleum gas (LPG) terminal worth INR787bn, are set to tighten Bosowa's grip on both the cement and energy industries in the surrounding regions.

"The facilities aim to strengthen distribution and the existence of LPG and cement [businesses] on Java and Bali in order to lower logistics costs," chief executive officer Erwin Aksa told The Jakarta Post.

The new grinding plant will be able to produce 1.8Mta of cement, adding to the 5.4Mta of cement Bosowa currently makes at its two plants in South Sulawesi and Riau Islands.

Industry Minister Airlangga Hartarto, who witnessed the official kick-off of the facilities by Vice President Jusuf Kalla on Thursday, said that at present the growth of cement consumption was shifting to regions outside of Java Island and the eastern part of the archipelago.

"This move [the operation of a new cement plant] is in line with the government's plan to improve and expedite infrastructure development and boost industrial activities across Indonesia," Airlangga said.
Domestic cement sales, an indicator of consumption in Southeast Asia's biggest economy, amounted to 60Mt in 2015 and the figure is expected to surge by five per cent this year, according to the Indonesia Cement Association (ASI).

However, from January to September sales only reached 44.71Mt, up 2.95 pe rcent from the past year, because of lower demand from the property sector.