INDONESIA: Bosowa builds $310 million clinker plant

Cement producer PT Semen Bosowa Maros officially began construction on a new clinker plant in South Sulawesi on Monday, as part of the expansion program. The new plant, which is called Kiln Plant Line 2, is located in Maros regency of South Sulawesi and will be built with an investment of about US$310 million. It will have a production capacity of 5.2 million tons of clinker a year, far larger than the existing plant that has an annual capacity of 2.5 million tons.

Semen Bosowa Maros, the unit of diversified business group Bosowa Corporation, expects to complete the plant’s construction before the end of 2014. 

Higher clinker production is expected to help the company increase its cement production to meet the country’s growing cement demands. “As of now, our cement production is 3.2 million tons per year, only about 6 percent of the national demand,” Bosowa Corporation chief executive officer Erwin Aksa said.

The total production comes from Bosowa Corporation’s two cement units, Semen Bosowa Maros with 2.2 million tons and Batam-based PT Semen Bosowa Indonesia with 1 million tons. 

Erwin said that the group expected to have production capacity of around 10 million tons of cement in 2015, or about 20 percent of the country’s estimated cement demands of around 53 million tons.

According to figures from the Indonesian Cement Association, national cement consumption reached 44.64 million tons as of the end of October, a 14.5 percent increase from the 38.98 million as of the end of October last year.

Clinker produced by Kiln Plant Line 2 will be delivered to Bosowa’s grinding plants. Semen Bosowa Maros is now developing new grinding plants in Banyuwangi in East Java, Cilegon in Banten, Sorong in West Pa-pua and Amurang in North Sulawesi.

The Banyuwangi grinding plant will have a production capacity of 1.8 million tons per year with investment reaching Rp 1 trillion ($103 million), is scheduled to be ready for operations before the end of 2013. 

Semen Bosowa Maros will also spend Rp 1 trillion on its Cilegon grinding plant, which will have an annual production capacity of 1.8 million tons after its completion in 2014. The company will also spend Rp 500,000 billion each to develop Sorong and Amurang grinding plants, which will have production capacity of 700,000 tons per year and are expected to start operations in 2014.