ASI welcomes new factories in eastern Indonesia only

With two new cement plants starting operations in Grobogan, Central Java, and Jember, East Java, Indonesia, domestic producers are expected to see a drop in capacity utilisation rates as the excess production capacity is set to rise to 41Mta, according to the Indonesian Cement Association.

"Two new factories in Grobogan, Central Java and Jember, East Java are currently working on commissioning. Hopefully there will be no more issuance of new cement plant permits because plant utilisation nationally is very low," said ASI Chairman, Widodo Santoso. 

PT Semen Imasco Asiatic Raya will open a plant in Puger Wetan village, Jember while PT Semen Grobogan anticipates the opening of its plant in Tanggungharjo, Grobogan. PT Semen Imasco Asiatic Raya, a joint venture between Hongshi Holding Group and PT Semen Imasco Asiatic Indonesia, is investing IDR5trn (US$336.9m) in a 8000tpd dry-process production facility.  The factory will be supplied by a 100Mt limestone deposit. The project includes a 12MW waste heat recovery system. PT Semen Grobogan is completing a 5Mta plant, representing an investment of US$300m.

“The current utilisation of cement manufacturers for the local market is only around 54 per cent. The total utilisation of the cement industry (local market plus exports) if added to the global market is at the level of 60 per cent. Previously, based on the ASI cement production target, the utilisation rate of cement manufacturers in 2021 would be around 66.25 per cent”,  Mr Widodo stated.  “The new manufacturers will be fully operational in 2021 and have the potential to drastically drag the utilisation of the national cement industry” He suggested issuing permits to build a new cement factory should only be granted for projects in locations such as Irian Jaya.