Daewoo to build cement plant in S. Sulawesi<\/p>\n
JAKARTA (JP): South Korea's Daewoo Corporation yesterday
\nsecured a US$208.8 million contract to build a cement plant in
\nSouth Sulawesi for PT Semen Bosowa Maros.<\/p>\n
\"The signing of the turnkey contract proves that Indonesia's
\ninvestment climate remains attractive for both foreign and
\ndomestic investors,\" Minister of Industry and Trade Tunky
\nAriwibowo said yesterday, after witnessing the contract's
\nsigning.<\/p>\n
Daewoo's president, Lee Il-sae, Muhammad Aksa Mahmud of the
\nBosowa Group and Rachid Hamdani of Semen Bosowa Maros yesterday
\nsigned the turnkey contract for the plant's construction. The
\nplant will have a production capacity of 1.8 million tons per
\nannum.<\/p>\n
\"This turnkey contract isn't the government's concern, because
\nBosowa is a newcomer to the cement industry. However, in future
\nplant construction, we hope that Bosowa will cooperate with local
\nengineering companies,\" the minister said.<\/p>\n
Daewoo is merely a contractor in the project and has no shares
\nat Semen Bosowa Maros, which is 100 percent owned by the Bosowa
\nGroup.<\/p>\n
Eighty percent of the plant's financing will come from
\ndomestic banks, comprising Bank Dagang Negara, Bank Negara
\nIndonesia, Bank Ekspor Impor Indonesia, Bank Tabungan Negara (all
\nstate banks) and privately-owned Bank Niaga, while the other 20
\npercent will come from Semen Bosowa Maros' equity.<\/p>\n
A Daewoo executive noted that the cement plant's construction
\nwill begin in early July and will require two years for
\ncompletion, scheduled for the middle of 1998.<\/p>\n
He added that the plant will begin trial production during the
\n17th month of the construction and commence commercial production
\nfollowing the project's completion.<\/p>\n
Meanwhile, Mahmud said his company has targeted sales of 60
\npercent of its total output on the domestic market, especially in
\neastern provinces, while the other 40 percent will be exported
\n\"provided that the local market has been satisfied\".<\/p>\n
He was very optimistic about the local cement market, saying
\nthat his company would recover its investment within 10 years of
\noperation.<\/p>\n
\"There are still tremendous opportunities in the cement
\nindustry, as our per capita consumption of cement is among the
\nlowest in the region,\" Mahmud said.<\/p>\n
To illustrate, he noted that Indonesia's per capita
\nconsumption of cement stood at 84 kilograms, as compared with 120
\nkilograms in the Philippines, 400 kilograms in Malaysia and 500
\nkilograms in Singapore.<\/p>\n
Agreeing with Mahmud's assessment, Tunky said demand for
\ncement is increasing by 15 percent per annum, reaching a total of
\n28 million tons this year from 24.1 million tons in 1995.<\/p>\n
Indonesia's cement plants currently have a combined production
\ncapacity of 26.5 million tons a year.<\/p>\n
He said Indonesia needs a significant amount of new investment
\nin cement plants, as the country still suffers a deficit in
\ncement because demand exceeds supply.<\/p>\n
Tunky earlier predicted that cement imports are likely to
\nincrease by 218 percent this year to 3.5 million tons, including
\nclinker -- raw material for cement manufacturing -- from 1.1
\nmillion tons last year.<\/p>\n
He added that Indonesia would export some 500,000 tons of
\ncement this year during a season of low demand.<\/p>\n
Tunky responded to critics by saying that Indonesia's
\ninvestment climate has been marred by the introduction of the
\nnational car policy, which discriminates against foreign car
\nmanufacturers.<\/p>\n
Tunky said the construction of the cement plant in Maros,
\nSouth Sulawesi, is expected to stimulate investments in eastern
\nprovinces. (rid)<\/p>",
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"sponsor": "Okusi Associates",
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