New joint venture formed to build cement plant
New joint venture formed to build cement plant
JAKARTA (JP): Korea Development Co. Ltd. (Kodeco), Marubeni Corp. of Japan and Indonesia's Indocement Group set up a joint venture company yesterday to develop and operate a US$488 million cement plant, with an annual capacity of 2.45 million tons in Batulicin, South Kalimantan.
The joint venture company is 46 percent owned by PT Indocement Investama, a unit of the Indocement group, five percent by several other Indonesian shareholders, 46 percent by Kodeco and three percent by Marubeni.
The plant, to be built by Marubeni, is slated to come on stream in 1998.
An executive of the company said yesterday that $146.4 million of the total investment would be financed with equity capital and the remaining $341.6 million funded by loans.
The project, he said, is supported by 1,000 hectares of limestone deposits, 100 hectares of clay and 1,000 hectares of iron sand, all located near Batulicin.
He said that the plant's production cost 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 21 projects licensed by the government to expand the country's cement manufacturing capacity. Most of the other projects are still in various stages of preparations 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.
The new plant will further strengthen Indocement's position in the industry because the group already accounts for more than 40 percent of the national capacity.
However, both Marubeni and Kodeco are newcomers to the cement industry.
Kodeco, the first South Korean investor in Indonesia, began investing in Indonesia in forest-based ventures, such as logging and sawn timber in the late 1960s. But it has diversified into plywood, the hydrocarbon sector, electronics, container boxes and rubber plantations. (vin)