Andalas seeks to double cement output

Andalas seeks to double cement output

Leony Aurora, The Jakarta Post/Jakarta

In view of the estimated rise in demand for cement in years to
come, cementmaker PT Semen Andalas Indonesia (SAI) will speed up
plans to build a plant in Langkat, North Sumatra, while
reconstructing its heavily damaged facility in Lhok Nga in Aceh.

SAI president Thomas P Ehrhart said on Friday the company, 99
percent owned by French-based cement chain Lafarge, had for some
time planned to build a second plant near Medan.

"We halted the plan in 1998 when the monetary crisis hit," he
said. The dollar skyrocketed against the rupiah at that time and
sent the construction industry into a tailspin after enjoying a
boom in the previous years.

Studies to exercise options to build another plant resurfaced
last year. The intention got even stronger following the recent
calamity in the province, in which the rebuilding of the badly
damaged infrastructure would spur demand for certain products,
including cement.

"We'll incorporate it (the planned new facility) into the
rebuilding of our plant in Aceh," said Thomas.

While the capacity of the new plant is yet to be determined,
the company aims to increase its total output capacity in the
country to 2.5 million tons a year, from the 1.3 million tons
produced in its plant in Aceh, Thomas said.

Luring investors is among the government's main priorities, in
part to help finance massive infrastructure projects across the
archipelago. For those purposes, it will hold the country's first
ever Infrastructure Summit on Monday, which will put 91 projects
worth Rp 22 billion on offer.

The provinces of Aceh and North Sumatra are the company's main
consumers, which were the hardest hit by the disaster.

SAI's facility in Lhok Nga, 25 kilometers west of Banda Aceh
and around 250 km from the epicenter of the Dec. 26 earthquake,
was severely hit by the tsunami. Parts of the plant were
shattered, electricity is dead, while offices and employees
housing do not exist anymore.

A technical team will be dispatched to make an assessment on
the damages next week. "It (the losses) will be worth tens of
millions of dollars," said Thomas.

Rebuilding works, to be conducted in phases, will begin as
soon as possible.

Thomas said it would take about one year for the firm to
return to its normal, pre-tsunami production, but ensured that
the company would meet its commitments as well as its demand
target.

"We have asked our sister companies in Asia, and managed to
secure nearly all of the demand," said Thomas.

Cement will be pouring in from Lafarge subsidiary in Langkawi,
Malaysia, and packaged in SAI's terminals in Lhokseumawe -- which
has started operating again -- Belawan, and Batam in Riau
Islands.

The company also plans to make a floating packaging terminal
offshore Banda Aceh within four to six weeks.

At present there is no demand for cement in the province
capital, as building material shops there have yet to reopen
their businesses.

"Hopefully when they are ready, we'll be ready as well," said
Thomas.