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)