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Indocement disburses low capex on first half
Major cement producer Indocement Tunggal Prakarsa has disbursed only 20 percent of its total anticipated capital expenditure (capex) in the first half of 2014
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ajor cement producer Indocement Tunggal Prakarsa has disbursed only 20 percent of its total anticipated capital expenditure (capex) in the first half of 2014.
The company had allocated Rp 4 trillion (US$339.59 million) to Rp 5 trillion for capital expenditures for the entire year.
'Our capex disbursement was between Rp 800 billion and Rp 900 billion in the first half to expand the capacity of our P14 plant in Citeureup, West Java,' Indocement finance director Tju Lie Sukanto said, as quoted by kontan.co.id on Sunday.
Meanwhile, Indocement CEO Christian Kartawijaya said the P14 plant would have the capacity to produce 4.4 million tons of cement, with around $120 to $125 worth of investment per ton of cement needed to build the plant.
'In total, we have to invest Rp 5.5 trillion to Rp 6.5 trillion for the plant's construction, which we hope to finish by the end of 2015,' he said.
'The plant's contribution will help us produce 24.9 million tons per year,' he added.
According to Christian, the value of investments may swell with the rupiah depreciating against the US dollar, as 80 percent of the investments are in dollars.
However, he said his company had secured around half of the investment funds through hedging by buying a large number of US dollars since 2012, when the rupiah was in the range of 9,800 to 9,900 per dollar.
Previously, Christian said that his company had readied up to $150 million to finance the construction of two greenfield plants in North Sumatra and in Pati, Central Java, to boost the company's production by 2018.
