New cement plant to be built in South Kalimantan
New cement plant to be built in South Kalimantan
JAKARTA (JP): PT Indo Kodeco Cement, a Korean-Japanese- Indonesian joint venture, signed yesterday a contract worth US$380 million with Marubeni Corporation of Japan to supply equipment and build a new cement plant in South Kalimantan.
The joint venture company, which will set up its cement plant at Batulicin with a production capacity of 2.45 million tons a year, is 46 percent owned by PT Indocement Investama, a subsidiary of the Indocement Group, 5 percent by several Indonesian shareholders, 46 percent by Kodeco and 3 percent by Marubeni.
Indocement's chief commissioner, Sudwikatmono, Kodeco's chairman, Choi Gye Wol and Director Lee Chun Ok, and Marubeni's director of plant division, Tetsuo Nishizaka, signed the contract in a ceremony at Wisma Indocement.
The contract will include the construction of the production plant and some 26.5 kilometers of overland belt conveyor at a cost of $300 million and the building of related infrastructure such as a jetty and cement terminal, power plant of 55 megawatts and a water treatment plant with 15 km of piping network at a cost of $80 million.
The project is to be supported by 1,000 hectares of areas with limestone deposits, 100 hectares with clay and 1,000 hectares with iron sand.
An executive of Indo Kodeco Cement said in April that the plant's production costs would be one of the lowest in Indonesia due to its proximity to raw materials and energy (coal).
He said the plant also will use its own specially-designed bulk carriers and seaport.
The plant is one of the 21 projects licensed by the government to expand the country's cement manufacturing capacity. Most of the other projects are still in stages of preparation for implementation.
Indonesia still partly relies on cement imports because the industry has not been able to catch up with the high growth in demand.
Marubeni and Kodeco are newcomers to the cement industry in Indonesia.
Indo Kodeco Cement said in a statement that the cement plant construction will take 30 months until April 1998 and will start production the following month.
The construction will employ some 2,000 workers and the plant will need 1,000 employees when it starts production.
The company said 30 percent of the funding for the project will come from shareholders and the remaining 70 percent from a syndicated offshore loan. The syndication will include Bank Nationale de Paris, the Fuji Bank Ltd., the Mitsubishi Bank Ltd. and Korean Exchange Bank. The Japan-Export Import and Marubeni Corporation will be acting as guarantors of the syndication loan.
A director of Indocement said in January that although Indocement has conducted massive expansions in its plants in Cibinong and Cirebon, both in West Java, it will not able to meet the rapidly growing demand on the domestic market.
The shortage of cement supplies has often forced prices to rise.
Director General of Chemical Industries Sujata has said that Indonesia's cement demand is projected at 26 million tons this year but its production will most likely reach only 24.5 million tons.(kod)