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T Semen Gresik, the nation's largest cement producer, has booked a 18.3 percent increase in net profits during the January-September period from a year earlier, with better prices compensating for reduced demand.

"Although national demand for cement has dropped by 4.9 percent this year, we booked 34.4 percent growth in net profits during the first nine months of 2009," Gresik president director Dwi Soetjipto said Thursday.

Despite a decline in demand for the industry, the company managed to sell almost 13 million tons of cement during this period, slightly more than the 12.4 million tons a year earlier, he said.

During this period, the publicly listed firm posted Rp 2.4 trillion (US$250 million) in net profits, up from Rp 1.791 trillion the previous year. Its revenue also increased by 18.3 percent to Rp 10.4 trillion, from Rp 8.8 trillion a year before.

"We are quite optimistic that domestic demand for cement will improve. We expect demand will grow by 5 to 6 percent next year," Dwi said, adding that the company was also targeted a 5 to 6 percent increase in production next year.

Most of its products were intended for domestic market. After the first nine months of the year, the company exported only 572,000 tons, far less than the 800,000 tons it sold in the same period in 2008.

The Semen Gresik Group - comprising Semen Gresik in East Java, Semen Padang in West Sumatra and Semen Tonasa in South Sulawesi - is the largest cement producer in Indonesia, with a 45 percent market share of Indonesia's cement industry.

It produces around 18 million tons per year, 98 percent of its total capacity.

To help increase production, the company is now concentrating on constructing two new cement factories in Tonasa and Tuban, East Java, slated for completion by 2011 and 2012.

Those factories, including their power plants, require about $784 million in investment, Dwi said.