Construction of Kodeco's cement plant starts
Construction of Kodeco's cement plant starts
KOTABARU, South Kalimantan (JP): PT Indo Kodeco Cement, a
Korean-Japanese-Indonesian joint venture, held its ground
breaking ceremony here yesterday to launch the construction of
its US$495-million cement plant.
The executive director of the company, Daddy Hariadi, said the
cement project, scheduled to be completed in August 1998, will
have an annual production capacity of 2.5 million tons.
The cement plant project, located on 500 hectares, will
procure its raw materials from a 4,000-hectare plot of land in
Batulicin, 260 kilometers east of the provincial capital of
Banjarmasin.
The project site is next to a palm plantation owned by the
Sinarmas Group which is owned by Indonesian tycoon Eka
Tjiptawidjaja.
Kodeco started its Indonesian logging operations in Batulicin
in 1968 before expanding into wood processing.
Hariadi said that the company plans to gradually increase its
production capacity to 10 million tons per annum.
The company is 51 percent owned by PT Investama, a subsidiary
of the Indocement Group, 46 percent by Korean Development Co.
Ltd. (Kodeco) of South Korea, and 3 percent by Marubeni Co. of
Japan.
Marubeni and Kodeco are newcomers to the cement industry in
Indonesia.
South Korean Ambassador Min Hyung Ki said the joint venture is
the largest ever between Korean and Indonesian companies.
Some 30 percent of the funds for the project will come from
shareholders and the other 70 percent from a syndicated offshore
loan.
In addition to the cement plant, the project will include the
construction of a 55-megawatt power station, jetty and cement
terminals, a water treatment plant, a 15-kilometer water
pipeline, a 24-kilometer overland belt conveyor and a 25-
kilometer access road.
The cement plant will also have a seaport capable of berthing
ships with 2,500 tons of cargo.
The construction of the project will employ some 2,000 workers
while the plant will need 1,000 employees when it begins
operating.
Costs
Hariadi said that the plant's production costs would be among
the lowest in Indonesia due to its proximity to raw materials and
energy or coal resources.
"Using coal as an energy resource can save costs by up to 40
percent compared to oil or natural gas," said Hariadi, adding
that coal will also be used for the power plant.
He said huge deposits of limestone, clay, iron ore and silica
sand are available in the nearby villages of Sei Kupang,
Mangkirana and Kampung Baru. Fresh water will come from the
Sarongga river.
Indo Kodeco Cement will be the tenth cement producer in
Indonesia after the five firms owned by the government and
another four by private firms.
The state owned cement firms are PT Semen Baturaja in South
Sumatra, PT Semen Padang in West Sumatra, PT Semen Gresik in East
Jakarta, PT Semen Tonasa in South Sulawesi and PT Semen Kupang in
East Nusatenggara.
The privately-owned firms are PT Indocement Tunggal Prakarsa
and PT Semen Cibinong in West Java, PT Semen Nusantara in Central
Java and PT Semen Andalas Indonesia in Aceh.
Director General of Metal, Machinery and Chemical Industries
Effendi Sudarsono said that domestic demand for cement will be
about 27 million tons this year, while the national supply will
reach an estimated 25 million tons. (kod)