Semen Indonesia, which is controlled by the government is developing a Rp 1.2 trillion cement plant in Papua.
“For the Papua plant, we will seek external funds like from loans on top of equity [injection],” Semen Indonesia finance director Ahyanizzaman said recently.
He said the cement maker is still looking for some suitable land, and the bank loans are expected to be secured next year. Construction, set to start in 2015, is estimated to take three years to complete.
Semen Indonesia is completing the feasibility study for the project. According to its plan, the factory will have annual capacity of 600,000 to 1 million metric tons.
Upon the factory’s completion, it will be the first cement plant in Papua.
Being situated far from Java — the most populous island where the main industrial plants take place — prices of some commodities in Papua, including cement is more expensive than in Java.
A sack of cement could be as much as Rp 1 million on the island, compared to around Rp 50,000 to Rp 65,000 in Java.