Gresik H1 cement sales up 20%

Gresik H1 cement sales up 20%

The Jakarta Post, Jakarta

The country's largest cement producer, PT Semen Gresik (SG),
said sales surged by 20 percent in the first half of this year,
driven primarily by soaring demand from government-sponsored
projects in East Java.

SG corporate secretary Soebagyo said sales, excluding those
from subsidiaries PT Semen Padang and PT Semen Tonasa, had soared
to around 3.5 million tons in the first half of this year from
round 2.9 million tons in the same period last year.

"Our sales have been boosted by massive government projects
currently under construction in East Java," said Soebagyo, before
attending a seminar held by the Indonesian Association of Listed
Companies (AEI) on Friday.

He said that the projects included the 5.4-kilometer Suramadu
bridge, which would link Java with Madura island, the development
of Juanda International Airport and the construction of Surabaya
outer ring road.

For the Rp 2.83 trillion (US$350 million) Suramadu project,
which will be the longest bridge in Indonesia, the publicly
listed cement firm was appointed by the developer as sole cement
supplier to provide around 300,000 tons of cement over the next
four years.

According to Soebagyo, the cement sold to the developer was
priced at around Rp 400,000 per ton.

Soebagyo also said that SG's local market share had increased
to 23 percent, from 21 percent at the end of last year.

With regard to a plan by Semen Padang to set up a new plant
that will cost $345 million, Soebagyo said that construction was
likely to start after the runoff presidential election in
September.

In a bid to finance construction of the plant, SG was
currently seeking a suitable financing mechanism with an option
to borrow from banks or issue bonds.

"We are still discussing the plan. Until now no decision has
been taken," he said.

West Sumatra-based Semen Padang plans to construct a new plant
that will have an installed capacity of 2.3 million tons per
year. Construction is expected to be concluded in 36 months.

Semen Padang said the reason for construction of the new plant
was to anticipate soaring demand, both at home and in the export
market, starting in 2009 or 2010.