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Chinese-owned firm to build cement plant in Aceh despite moratorium
The Industry Ministry is set to hold a meeting to gather information on how China-owned subsidiary Kobexindo Cement was able to obtain an NIB through the OSS, according to its cement industry director.
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Rini M. Soemarno (center right, front), in her capacity at the time as state-owned enterprises minister, visits on March 17, 2017 the factory of state-owned cement producer PT Semen Indonesia in Rembang, Central Java. (JP/Suherdjoko)
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local company belonging to a Chinese conglomerate is to build a cement factory in South Aceh regency, despite a nationwide moratorium in place since 2020.
Interim South Aceh regent Cut Syazalisma signed an agreement on May 18 that permits PT Kobexindo Cement, part of China’s cement conglomerate Hongshi Holding Group as a subsidiary of Zhejiang Hongshi Cement Co., Ltd., to construct a factory in the regency.
The prospective investment amounts to Rp 10 trillion (US$622 million) for the facility, which is to have a production capacity of 6 million tonnes per year.
The deal contravenes a moratorium the central government imposed to halt the construction of cement factories across the country, except in Papua, West Papua, Maluku and North Maluku.
The moratorium was issued in response to cement oversupply in the domestic market, as the national output of 119.9 million tonnes far surpassed the annual demand of 65.5 million tonnes, according to the Indonesia Cement Association (ASI).
The policy is implemented in the Online Single Submission (OSS) system, the government’s business permit platform.
With that in mind, Kobexindo Cement should not have been issued a Business Identification Number (NIB), an essential step in the licensing process, the ASI says.
