The nation’s largest cement producer, PT Semen Gresik, says that the completion of its power plant project in Pangkep, South Sulawesi, will be delayed due to bad weather and manpower limitations.

In a file submitted to the Indonesia Stock Exchange (IDX) on Tuesday, Semen Gresik said that its 2x35 megawatt (MW) coal power plant would be completed by the second quarter of 2013, a delay from the initial target of the third quarter of this year.

“Extreme weather has hampered construction work, particularly in civil engineering, leading to delays in the mechanical and electrical works. The bad weather has also disturbed the delivery of materials. Moreover, the [available] workforce in the area is very limited,” the company said in the statement.

Semen Gresik started construction on the power plant in 2009, aiming at ensuring an electricity supply for its cement plant in Sulawesi.

With the delay, however, the company said that the budget for the plant would likely go up by as much as 10 percent over the original estimate of US$114 million, according to Semen Gresik corporate secretary Agung Wiharto.

“We haven’t counted it all up yet. However, it will be between 5 and 10 percent,” Agung said, adding that higher spending on the plant would not disrupt Semen Gresik’s operations.

The power plant is intended to supply Semen Gresik’s recently completed Tonasa V cement factory, which would operate using electricity supply from state power company PT Perusahaan Listrik Negara (PLN) until the power plant was finished, Semen Gresik said.

According to Agung, construction on the plant was 92 percent complete at the end of August. Agung said the company had appointed several contractors, including PT Rekayasa Industri, to build the plant.

The firm’s finance director, Ahyanizzaman, said that Semen Gresik was still considering building more power plants to guarantee Semen Gresik an independent and secure electricity supply.

“However, it will depend on whether current electricity supplies [from PLN] are enough to support our factories,” Ahyanizzaman said.

Semen Gresik’s previous plans to build power plants in Java and Sumatra to support local operations were canceled due to the 2008 global economic crisis, which led the firm to cancel plans to issue dollar-denominated bonds to finance the plants.

Despite the cancellation, Semen Gresik has remained upbeat on power following PLN’s accelerated 10,000-MW power plant development program.

“Following PLN’s plan to build the 10,000 Megawatt plants, we have decided to focus on building our cement plants. However, we will still continue with the South Sulawesi power plants, because PLN’s supply cannot meet electricity demand in the area,” Agung said.

Shares in Semen Gresik (SMGR) dropped 2.84 percent to Rp 13,700 apiece on Tuesday compared to closing price of Rp 14,100 a day earlier.

The company’s market capitalization reached Rp 81.56 trillion.

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