Indonesia's largest cement producer, Semen, plans to build a new $300 million cement plant in Vietnam as part of its expansion in Southeast Asia. It is reported that the existing plant of Indonesia Semen's subsidiary in Vietnam, Thang Long Cement Company (hereinafter referred to as TLCC), is located in the north of Vietnam, while the new plant will be built in the south of Vietnam, near the company's limestone mine.
Indonesia's Semen hopes to expand TLCC's capacity by building a new plant with an annual cement capacity of 1.5 million tons, said Dwi Soetjipto, a senior executive of Indonesia's Semen. In addition, construction of the plant will begin early next year and take three years to complete.
Mr Soetjipto said investment in the new plant was estimated at $250m-300m, most of which would come from bank loans. Soetjipto also said that in order to consolidate Indonesia Semen's position in Vietnam, the company had two options, namely, to acquire a company smaller than TLCC or to increase the production of its subsidiary in Vietnam. "The capacity utilization rate of TLCC has reached 100%, which means we have to expand and add a new cement plant to meet the market demand," he told reporters.
Mr Soetjipto also said that, like the existing cement plant, the products produced by the new plant will be used to supply the Vietnamese market and exported to other ASEAN countries, such as Singapore, Cambodia, Laos and Myanmar. In addition, Bangladesh and Sri Lanka will also be the export targets of Semen Indonesia. It is reported that in 2013, Indonesia Semen's revenue from exports rose sharply.
In addition, Mr. Soetjipto added that Semen Indonesia also plans to acquire a grinding mill in Bangladesh and is studying several companies it is interested in acquiring.
It is reported that TLCC currently has an annual cement production capacity of 2.5 million tons. Once the new plant starts commercial operation, Indonesia Semen will have an annual cement production capacity of 4 million tons in Vietnam.
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