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hina’s largest cement producer Anhui Conch Cement announced its commitment to set up four new cement plants on the islands of Kalimantan and Papua this year with a collective investment worth US$2.35 billion.

The commitment was detailed in a Memorandum of Understanding (MoU), which was signed by Anhui Conch Cement president Guo Wen Shan and the Industry Ministry director general of manufacturing industries Panggah Susanto in Jakarta on Thursday.

Speaking after the signing ceremony, Guo said that the MoU was a follow-up to Chinese Prime Minister Wen Jiabao’s two-day state visit to Indonesia in late April, during which 22 cooperation agreements were made to broaden and deepen the bilateral cooperation between Indonesia and China in the fields of infrastructure, energy and manufacturing.

Guo said that, as a result of the visit, Anhui Conch Cement would establish three cement plans in three provinces in Kalimantan and another one in West Papua province.

The Chinese company intended to build one plant each in Tanjung, South Kalimantan; Tanah Grogot, East Kalimantan; Pontianak, West Kalimantan; and one in West Papua, Guo said.

“The establishment of plants in Tanjung and Tanah Grogot will be our priority,” he said,
adding that the abundance of limestone, smooth transportation logistics and stable geological conditions made Kalimantan a suitable place to establish a large-scale cement plant.

Of the $2.35 billion investment, Guo said that around $400 million would be invested in the Tanjung plant, while another $600 million would be for the plant in Tanah Grogot.

“Another $600 million would be invested in the Pontianak plant and the remaining $750 million would be used to establish the plant in West Papua,” he said.

He said that the four plants would have a production capacity of 10,000 tons per clinker per day, except the one in Tanjung which would have production capacity of 6,400 tons of clinker per day.

He added that each plant would be equipped with a cement grinding plant, a seaport, a power plant capable of producing 60 megawatts of electricity and other production support facilities.

Industry Minister M.S. Hidayat, who also witnessed the signing of the MoU, said that he welcomed the plan and that he would facilitate the issuance of recommendations and licenses that would help Anhui Conch Cement in their plan to establish cement plants in Kalimantan and Papua.

According to Hidayat, Indonesia currently has nine cement producers in Java, Sumatra, Kalimantan, Sulawesi and Nusa Tenggara with a total production capacity of 52 million tons.

The demand for cement in 2010 reached 40.7 million tons, while the total cement production was only 37.8 tons, he said.

“With a 7- to 10-percent yearly increase, we estimate the cement demand will reach 55 million tons in 2015 and 100 tons in ten years,” Hidayat told reporters.

“Anhui Conch Cement’s plan to establish cement plants in Kalimantan and Papua will hopefully strengthen the national cement industry in fulfilling domestic and export demands, boost regional economic activities, decrease unemployment and improve social infrastructure for local people,” Hidayat said.

“Fulfilling domestic demand will certainly be the priority,” he added.

“I hope this will increase the investment climate in Indonesia and draw other foreign business firms to invest here,” Gita said.

“We are ready to help Anhui Conch Cement in their future business development plans,” he said, adding that he was sure there would be no business rivalries between the Chinese firm and national cement producers (mim)