State-owned cement producer PT Semen Indonesia (SI) president director Hendi Prio Santoso says the company will be able to produce 53 million tons of cement following the company’s acquisition of PT Holcim Indonesia.
“Semen Indonesia alone controls 40 percent of the cement market in Indonesia, while Holcim controls 15 percent of the market. It means that we will control 55 percent of the domestic market,” he said as reported by kontan.co.id on Wednesday.
Hendi said the company had anticipated an increase in the demand for cement ahead of the acquisition.
SI announced on Tuesday it had taken over 6.18 billion shares of Holcim, 80.6 percent of the company’s shares in a US$916 million transaction. The acquisition was held by PT Semen Indonesia Industri Bangunan, a subsidiary of SI.
SI corporate secretary Agung Wiharto said there were 15 cement producers in the country with total installed capacity of 107 million tons, while domestic consumption reached 66.5 million tons.
Market demand increased to 70 million tons in 2017, meaning that the gap reached 37 million tons, he added.
Agung estimated that supply and demand would balance out in 2027, with an estimation of 7 percent annual growth in demand. He added that SI sales had grown 5 percent from January to September, while the company’s capacity utilization had reached 90 percent.
“Without any additional capacity, Semen Indonesia could do nothing to fulfill the increase in market demand,” Agung added. (bbn)
The Jakarta Post