A memorandum of understanding (MoU) on the cement factories development plan was signed by the industry ministry`s Director General for Manufacturing Industry Base Panggah Susanto and a Chinese consortium here Thursday.
The Chinese consortium consists of Anhui Province`s State Enterprise Administration and Supervision Commission Director General Xu Chong Xin, Chairman of Prosperity Group Huang Bing Jun, and Guo Wen San of Anhui Conch Cement Company LTd.
The MoU signing was witnessed by among others Industry Minister Hidayat, Chairman of the Investment Coordinating Board (BKPM) Gita Wirjawan, and East Kalimantan Governor Awang Farouk.
Several projects included in the MoU are among other things a cement factory to be built at Tanjung, South Kalimantan, Toeti Rahajoe, the industry ministry`s downstream chemical industry director, said.
The planned total investment would reach 400 million US dollars, with an initial investment amounting to 250 million US dollar, she added.
The second factory will be constructed at Tanah Grogot (Paser), Sepinang, East Kalimantan, with a total production capacity of 10,000 klinker tons per day. Its investment will reach around 600 million US dollars.
Two other cement factories will respectively be built in Pontianak, West Kalimantan Province, and Papua Proivnce, with investments amounting 600 million US dollars and 750 million US dollars.
Industry Minister MS Hidayat welcomed China`s plan to build the four cement factories in Indonesia as the domestic demand for cement is expected to increase 7-10 percent.
He estimated the cement demand in Indonesia in 2015 will reach 55 million ton, while the total cement productions from the existing nine cement producers are recorded at 53 million tons. The factories are located at Java, Sumatra, Kalimantan, Sulawesi and Nusa Tenggara islands.
"The cement demand in 2010 in Indonesia was 40.7 million tons while production totaled 37.8 million tons. Demand for cement in the future is expected to increase 7-10 percent," he said.