Indonesia Holcim to build new $500 mln cement plant

Indonesia's third largest cement maker, PT Holcim Indonesia, plans to invest $400 million to $500 million in a new factory in Tuban, East Java, a company director said on Tuesday.

The expansion, which will add 1.6 million tonnes of capacity, is subject to controlling shareholder approval from the Swiss-based Holcim Group, said Holcim Indonesia's legal and corporate affairs director, Jannus Hutapea.

Analysts predict that a positive outlook for Southeast Asia's largest economy coupled with government stimulus plans should boost cement demand in Indonesia, already seen rising between 7-10 percent this year.

"We already secured the area in Tuban for the factory," said Hutapea. "If we start the construction this year it may take about 2.5 years for completion."

Hutapea said the company is in preliminary talks with several local banks to help partially finance the project as well as using its internal cash.

He said that Holcim, which has a $2.1 billion market capitalisation, wants to expands capacity to 8.3 million tonnes a year from the current 7.9 million.

From China Cement (2010-5-7)