Publicly listed PT Holcim Indonesia, the nation's third largest cement producer, plans to build a new plant worth US$400 million with an annual production capacity of 3.5 million tons in Tuban, East Java, by the end of 2009.

Corporate communication manager Jeffry Sani said Monday the construction would take around three years to complete.

"So we expect the site to start operations in 2011," he said.

The firm currently has two plants. Last year it produced a combined output of 7.9 million tons of cement, around 80 percent of the two plant's combined production capacity.

President director Tim Mackay is upbeat the new plant would increase company performance.

In the first quarter of 2008, the firm booked a 14.9 percent sales increase to Rp 885.77 billion, resulting in Rp 138.17 billion in net profit. In the same period last year, the company suffered Rp 14.48 billion in losses.

Mackay said Holcim's market share rose last year by 2 percent to 23 percent, with 60 percent of sales coming in Central Java.

"We want to focus on fulfilling domestic needs, especially in Java, instead of exporting," he said.

Of the total 6.96 million tons in sales, 4.9 million tons were sold to the domestic market.

In addition to the Tuban project, Holcim also plans to acquire more small cement plants in East Java, having completed the acquisition of PT Pendawa Lestari Perkasa recently.

"In April 30, we acquired a 100 percent stake in PT Pendawa, which is based in Surabaya."

Pendawa has a production capacity of 700,000 tons a year. (rff)

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