Semen Indonesia Earmarks $4.3b for Five-Year Expansion Plan
Jakarta. State-controlled Semen Indonesia, the country’s largest cement manufacturer, plans to spend up to $4.3 billion in capital expenditure within the next five years to expand its production capacity.
Semen Indonesia has earmarked a capex of approximately $687.7 million for 2015 and $1.28 billion for next year. It then plans to spend $1.06 billion in 2017, $577.79 million in 2018 and finally, $656.3 million in 2019.
The publicly listed company will fund its five-year expansion plan through a combination of internal cash and bank loans. It may also issue bonds to restructure its financing, said Semen Indonesian finance director Ahyanizzaman.
“The funding source will depend on market conditions when the plan is realized,” he said in Jakarta on Sunday.
The manufacturer will spend the largest portion of the capex fund next year when it rushes to complete construction of its new plants in Rembang, Central Java, and Indarung, West Sumatra. Both factories are scheduled to be completed in the third quarter of 2016.
“[The plants] are part of a multi-year project that started last year. We plan to invest up to Rp 3 trillion [$222,626] by the end of this year for Indarung and Rembang and the rest will be spent next year,” Ahyanizzaman said.
Each plant will have an annual production capacity of three million tons of cement. The Indarung plan is estimated to cost up to $352 million, while the plant in Rembang will require an investment of $403 million.
Semen Indonesia’s production capacity is estimated to reach 32.3 million tons to this year, a 1.5 percent increase from 31.8 million tons last year. With the new plants, the figure is forecast to reach 38.3 million tons by 2016.
On top of these two projects, Semen Indonesia is currently building a $61.1 million cement grinding plant in West Java, as well as a $49.3 million waste heat recovery power generator with a 30.6 megawatt capacity. Both are scheduled to be completed in the second half of 2016.
Ahyanizzaman said the company was also planning to build a new cement plant in Aceh in the same year.
“If we can start building the plant in Aceh next year, construction should be complete in 2019. The investment value will probably be similar to the plant in Rembang,” he added.
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