The second largest national cement producer PT Indocement Tunggal Prakasa Tbk plans to build two cement plants in Central Java and outside Java with the purposes of investment of around U.S. $ 600 million.
Indocement Company Secretary Sahat Panggabean disclose the construction of two new cement plants each with a capacity of 2.5 million tons was done to anticipate the surge in demand for cement in 2013.
"The demand is quite strong domestic market, if such growth continues, would be supply shortages in 2013," he told the Business, last week.
He explained the plan to build the plant is currently still in the feasibility study stage (feasibility study / FS) is targeted for completion in the fourth quarter of this year. "The need for funding for a new factory wasteland [green field] was about U.S. $ 300 million. If the two plants is about U.S. $ 600 million," he explained.
Company, he added, currently has two funding options, from internal cash and bank syndicated loan. "We'll see where the cost is cheap. If interest is good, we can use syndication, but if it is cheaper to use his own money, we will use internal cash conditions are quite strong today," he said.
Referring to the financial statements of the Company as at 30 June 2011, total cash and cash equivalents company Rp6, 18 trillion, up 32.1% compared to the position late last year Rp4, 68 trillion. In terms of debt to equity ratio (debt to equity ratio / DER) at the level of 0.2 times, which means the company still has plenty of space for a loan.
Sahat declared the construction of two new plant is targeted to begin late this year and is estimated to be completed end of 2013. "Late 2013 and early target is already operating commercially in 2014 already," he said.
According to him, along with the high national cement demand, competition in the cement industry is also going to increasingly stringent especially with the increasingly aggressive foreign investment in the cement industry the country. Company's 51% stake held by the German Heidelberg Cement Group currently has three cement plants, namely in Citereup (Bogor), Palimanan (Cirebon) and Tarjun (Kota Baru, South Kalimantan) with a total production of 18.6 million tons per year.
In the first half of this year, Indocement current period net profit of Rp1, 73 trillion, up 5.4% compared with achieving the same period the previous year Rp1, 64 trillion.
The increase in net profit was driven by revenue increases 18.1% to Rp6, 33 trillion, compared with the performance of the same period a year ago Rp5, 36 trillion. The increase in revenues was supported by strong domestic sales and domestic price increase of 3% in October 2010.
The company's domestic sales volume in the first half of 2011 reached 7.4 million tons or 10.8% higher compared with sales of 6.7 million tonnes last year. The high achievement was driven by strong demand in the private sector (housing and buildings), especially in Java which grew 18.7%.
Meanwhile, for export sales decreased 33.7% to 0.3 million tonnes compared with last year's performance of 0.5 million tonnes. The decrease is due to the company focuses on high domestic demand.