New Indonesian plant for Siam Cement

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Indonesia: Thai cement giant Siam Cement Group (SCG) will further expand its presence in Indonesia by building a new cement plant and acquiring more companies in the country, according to a company executive.

Chief finance officer Chaovalit Ekabut said that SCG expected to start the construction of a greenfield cement plant in Sukabumi, West Java with a total investment of US$356m."We expect to start construction this year and finish by 2015. We hope to commence operations at this cement plant in the second half of 2015," Chaovalit said on 27 February 2013.The cement plant will have a production capacity of 1.8Mt/yr.

Chaovalit added that SCG had decided to be careful and make small-scale investments in the cement market in Indonesia, which has grown rapidly on the back of increased housing demand and infrastructure projects.

"Some projections calculate that cement capacity (in Indonesia) may reach 100Mt/yr in another five to six years. This is very dangerous because you face a kind of bubble. When the demand seems to be very high, people build more and more plants and then everything stops and you end up having so much extra capacity," Chaovalit said."I hope we shall not fall into the same trap again. Companies should look at the market and continue to invest to serve the demand and not to overexploit something that is not real."

Last modified on 06 March 2013

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