REPUBLIKA.CO.ID, By Otniel Tamindael

JAKARTA -- Publicly listed cement company PT Semen Indonesia, previously known as Semen Gresik, has set a target to increase the number of its packing plants to 30 by 2016.

By increasing the number of packing plants, PT Semen Indonesia is making every effort to step up its production capacity and sales to 31 million metric tons in 2014, raising it from 27.95 million metric tons from the 15 existing packing plants in 2013.

The largest cement producing company in Indonesia has just set up a packing plant that will soon be operational in Banjarmasin, South Kalimantan.

Company's Secretay Agung Wiharto stated in the East Java provincial city of Surabaya, on Monday that the construction of the packing plant in Banjarmasin, with an investment of around Rp120 billion, took a year to complete.

"The presence of Banjarmasin's packing plant that will soon be inaugurated in January 2014, will further strengthen the existence and expansion of the company's businesses," Agung stated.

He noted that the presence of Semen Indonesia's packing plants in various areas across the country was part of the company's strategy to get closer to consumers.

According to him, the packing plant in Banjarmasin has a silo with the capacity to store 600 thousand tons of cement per year, and is equipped with two pocket lines with the capacity of 2,200 bags per hour and a rotary packer for cement in bulk with the capacity of 120 tons per hour.

"All packing plants, which spread over several areas from Sumatra to Papua, have special ports to boost efficiency in terms of transport costs and distribution," he explained.

He added that the company has also set up a packing plant in Sorong, West Papua, to meet the growing demand of cement in the region.

PT Semen Indonesia, hitherto has operated 21 packing plants spread across Aceh, Belawan, Padang, Dumai and Batam in Sumatra; Ciwandan in West Java, Tanjung Priok in Jakarta; Tuban, Gresik and Banyuwangi in East Java; Banjarmasin, Samarinda and Celukan Bawang in Kalimantan; Tonasa, Makassar, Palu and Bitung in Sulawesi; Ambon in Maluku and Sorong in Papua.

"The company is and will continue to increase the number of packing plants in order to reduce logistic cost, that will invariably make the price of its cement products more affordable," he explained.

Semen Indonesia is the holding company that operates four cement plants, namely Semen Padang, Semen Gresik, Semen Tonasa, and Thang Long Cement in Vietnam.

Semen Padang operates a plant in Padang, Sumatra to serve the island and export markets in South Asian countries, Semen Gersik mainly serves Java, the country's largest cement market. Meanwhile, Semen Tonasa caters to the eastern part of the country.

Thang Long Cement, a subsidiary in Vietnam, sells cement in Vietnam and to other Southeast Asian nations.

Meanwhile, Semen Indonesia President Director Dwi Soetjipto stated in Gresik, on Wednesday that the company will increase its production and sales capacity by 10 percent to 31 million tons this year.

According to him, the production and sale capacity will also be supported by the existing 11 special sea ports and the network of 361 distributors in various regions across the country.

Relating to the "strategic holding" of PT Semen Indonesia to enhance the competitiveness and to increase bargaining power, Dwi pointed out that it will provide added value to each region.

"The regions need not worry about the strategic holding of Semen Indonesia because it will create a good synergy and foster the potentials of each region," he noted.

Late in 2012, the publicly listed PT Semen Gresik had changed its name to PT Semen Indonesia to give an impetus to the company's future growth.

Dwi stated that the new name was expected to represent a wider umbrella for its subsidiaries whose headquarters are located in several regions such as Padang in West Sumatra, Gresik in East Java and Tonasa in South Sulawesi.

"Regionalism perception being quite strong, a name change was required to support the corporate vision," he explained.

According to him, the new name can directly benefit each region because it would stimulate regional development and reduce unemployment in the region.

Dwi pointed out that up to November 2013, Semen Indonesia recorded sales of around 23.41 million tons in domestic and export markets, or up by 14.6 percent from 20.43 million tons during the same period in the previous year.

He noted that the company aims to maintain its market share with the introduction of new cement varieties to meet customers' demand, as well as by improving its existing packing plants with new machinery.

Semen Indonesia has teamed up with state-owned steelmaker Krakatau Steel to produce slag powder for use in specialized cements.

The joint venture company, to be called Krakatau Semen Indonesia, will require a total investment at Rp 440 billion ($36 million) to turn blast furnace slag into an ingredient in cement.

"To date, Semen Indonesia dominates the domestic market with a market share of around 43.8 percent, and therefore we will continue to control it," Dwi said.

Further, he added that such an outstanding achievement by the company is the fruit of its superior product and the application of integrated marketing strategy.

He noted that the strategy was also supported by existing special ports and packing plants in various areas across the country.

"Seeing the bright industrial development prospects and economic growth, we are optimistic that the cement market at a national level will grow even better in 2014," he assured.

Meanwhile, PT Varia Usaha, one of Semen Indonesia subsidiaries, continues to support the increase of cement distribution to many areas across the country.

Varia Usaha President Director Sunardi Prionomurti stated on Wednesday that the company will fully support cement distribution by increasing the number of its truck bulks.

He pointed out that Varia Usaha is a rapidly growing company in Indonesia that deals with concrete and aggregate business, and actively participates in supplying cement-based products, including ready mixed concrete, crushed stone, concrete masonry and other building materials.

"Along with the rapid development of PT Semen Indonesia with its sales target of 31.8 million tons of cement in 2014, we will continue to support its distribution to every part of the country," Sunardi assured.

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