Semen Fatoele'oe finally gets license for cement plant

Semen Fatoele'oe finally gets license for cement plant

KUPANG, East Nusa Tenggara (JP): PT Semen Fatoele'oe Permai,
after waiting eight years, has finally secured a license to
exploit a 600-hectare plot here for its planned cement plant
which is expected to produce up to one million tons a year.

The company's operation director, Habel Junus Alexander
Toepitoe, said here yesterday that his company was now waiting
for an operations license from the provincial administration.

"After the (provincial) license is issued, we will immediately
start building our cement plant," Habel told The Jakarta Post.

Last year, the company publicized its long wait for a license
to develop the cement plant.

Sources said the provincial administration had delayed the
license because three cement companies were vying to operate in
the same area.

They are Semen Fatoele'oe, PT Semen Osin and state-owned PT
Semen Kupang.

Semen Kupang, the only cement producer in the area, can
produce up to 120,000 tons here a year. Last year, it upgraded
its production plant to raise its production capacity by 150,000
tons a year.

East Nusa Tenggara Governor Herman Musakabe dismissed a
suggestion that his administration had delayed issuing licenses
for cement plants.

He said his administration had to wait for an approval from
the central government before it could award a license.

Habel said his company would work with an Australian investor
to exploit the 600-hectare concession, with a supporting area of
10,000 hectares.

The area, rich with raw materials for cement, is projected to
be able to support a cement plant producing one million tons
yearly for more than 100 years.

Habel said his company would build the cement plant at Fatoele
village, some 10 kilometers west of here. The plant would cost Rp
1.7 trillion (US$713 million) to build, mostly financed by local
banks.

Habel said that, if the company started building the plant
this year, it could start operating next year.

The company wants to export 60 percent of its cement to
Australia, and sell the rest domestically.

The company signed a purchase agreement with an Australian
importer in Jakarta last month.

If the company goes ahead with its plan and starts commercial
production next year, it will significantly raise the country's
output of cement, which is projected to oversupply the domestic
market this year and next year.

The Indonesian Cement Association has predicted that there
would be an oversupply of two million tons this year and 3.5
million tons next year.

This calculation does not include Semen Fatoele'oe's planned
output.

If the company can run the new plant at 40 percent capacity,
it would add about 160,000 tons of cement a year to the domestic
market.

State-owned PT Semen Andalas in Aceh is another company with
plans to produce more cement. It will upgrade its plant to raise
its output to two million tons next year, up from 1.12 million
tons last year.

The company's president, Martin R. Wilkes, said the upgrade
would start this year and finish early next year.

Aceh Governor Syamsuddin Mahmud said in Lhoknga, Aceh, on New
Year's eve that Semen Andalas should produce more cement to
anticipate the development of an industrial estate in Aceh.

"I predict that demand for cement will increase drastically in
years to come. Investors have expressed their readiness to build
the industrial estate, and President Soeharto has given his
approval," the governor said. (yac/rid)