JAKARTA. Publicly listed cement producer PT Semen Gresik Tbk (SMGR) plans to develop packing plants in strategic areas in the archipelago with the aim of improving product distribution and consequently cutting logistics costs. “Currently, Semen Gresik has 18 packing plants. We hope to have 16 to 17 more in the next five years to lower distribution costs,” Semen Gresik finance director Ahyanizzaman told The Jakarta Post by telephone on Sunday. Each packing plant, with a capacity to bag 200,000 to 300,000 tons of cement per year, would require about US$10 million, he said. Semen Gresik expects to complete the construction of at least four packing plants this year, according to Ahyanizzaman. The company’s ongoing packing-plant projects comprise factories in Sorong, Papua; Banyuwangi, East Java; Banjarmasin and Balikpapan in Kalimantan and Riau. “The packing plant in Banyuwangi is almost finished and the Papua plant is about 50 percent complete. Meanwhile, we are ready to construct the plants in Kalimantan. We expect to build in more areas in Kalimantan, however, we remain constrained by land acquisition,” Ahyanizzaman said. New packing plants are part of Semen Gresik’s effort to improve its distribution, especially in areas in eastern Indonesia, which frequently face delivery hurdles leading to higher cement prices. Each packing plant will bag cement sent from their closest Semen Gresik factory. The plant in Sorong, for example, will process cement produced by Semen Gresik’s factories in Sulawesi. The packing plant will have a capacity of bagging 600,000 tons of cement per year. Semen Gresik is investing around Rp 200 billion in the Papua packing plant, which is supported by a silo with a capacity of 10,000 tons and a 150-meter harbor. Semen Gresik is constructing Tonasa V, a cement factory in Pangkep, South Sulawesi that is designed to produce 2.5 million tons of cement per year. Tonasa V is expected to be completed this June. The company is also working on the Tuban IV cement plant project in Tuban, East Java. Tuban IV, designed to have a total capacity of 2.5 million tons cement per year, is expected to be finished in March. Both Tonasa V and Tuban IV will help Semen Gresik to reach a production capacity of 23 million tons this year from last year’s 19.7 million tons. “Tonasa V and Tuban IV will have only started production later this year and will contribute less than their capacities,” Ahyanizzaman said. The higher production would lead to a 10 to 12 percent increase in Semen Gresik’s revenue this year, he said. Semen Gresik president director Dwi Soetjipto recently said that his company aimed to book Rp 17 trillion in revenue this year, increasing from an estimated Rp 16 trillion in 2011. Semen Gresik has yet to publish its financial report of 2011. Despite the two digit growth in revenue, Semen Gresik will likely experience only a slight increase in net profits. “We estimate a growth of 1 to 2 percent in net profits this year compared to last year. The slight increase is due to the new factories producing below their full capacity,” Ahyanizzaman said. (Raras Cahyafitri, The Jakarta Post)
Semen Gresik to spend US$170 M on packing plants
JAKARTA. Publicly listed cement producer PT Semen Gresik Tbk (SMGR) plans to develop packing plants in strategic areas in the archipelago with the aim of improving product distribution and consequently cutting logistics costs. “Currently, Semen Gresik has 18 packing plants. We hope to have 16 to 17 more in the next five years to lower distribution costs,” Semen Gresik finance director Ahyanizzaman told The Jakarta Post by telephone on Sunday. Each packing plant, with a capacity to bag 200,000 to 300,000 tons of cement per year, would require about US$10 million, he said. Semen Gresik expects to complete the construction of at least four packing plants this year, according to Ahyanizzaman. The company’s ongoing packing-plant projects comprise factories in Sorong, Papua; Banyuwangi, East Java; Banjarmasin and Balikpapan in Kalimantan and Riau. “The packing plant in Banyuwangi is almost finished and the Papua plant is about 50 percent complete. Meanwhile, we are ready to construct the plants in Kalimantan. We expect to build in more areas in Kalimantan, however, we remain constrained by land acquisition,” Ahyanizzaman said. New packing plants are part of Semen Gresik’s effort to improve its distribution, especially in areas in eastern Indonesia, which frequently face delivery hurdles leading to higher cement prices. Each packing plant will bag cement sent from their closest Semen Gresik factory. The plant in Sorong, for example, will process cement produced by Semen Gresik’s factories in Sulawesi. The packing plant will have a capacity of bagging 600,000 tons of cement per year. Semen Gresik is investing around Rp 200 billion in the Papua packing plant, which is supported by a silo with a capacity of 10,000 tons and a 150-meter harbor. Semen Gresik is constructing Tonasa V, a cement factory in Pangkep, South Sulawesi that is designed to produce 2.5 million tons of cement per year. Tonasa V is expected to be completed this June. The company is also working on the Tuban IV cement plant project in Tuban, East Java. Tuban IV, designed to have a total capacity of 2.5 million tons cement per year, is expected to be finished in March. Both Tonasa V and Tuban IV will help Semen Gresik to reach a production capacity of 23 million tons this year from last year’s 19.7 million tons. “Tonasa V and Tuban IV will have only started production later this year and will contribute less than their capacities,” Ahyanizzaman said. The higher production would lead to a 10 to 12 percent increase in Semen Gresik’s revenue this year, he said. Semen Gresik president director Dwi Soetjipto recently said that his company aimed to book Rp 17 trillion in revenue this year, increasing from an estimated Rp 16 trillion in 2011. Semen Gresik has yet to publish its financial report of 2011. Despite the two digit growth in revenue, Semen Gresik will likely experience only a slight increase in net profits. “We estimate a growth of 1 to 2 percent in net profits this year compared to last year. The slight increase is due to the new factories producing below their full capacity,” Ahyanizzaman said. (Raras Cahyafitri, The Jakarta Post)