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ocal diversified business group Bosowa Corporation says next year it plans to build a cement factory in Cilegon, Banten, with an estimated investment of Rp 1.5 trillion (US$123.92 million).

CEO Erwin Aksa said on Monday that the construction would be covered by combined funding, of which 70 percent would be loans from local and foreign banks and the remaining 30 percent from internal cash.

The construction is set to kick off in the first quarter of next year and will take around 1.5 years to complete, he added.

'€œIf we can begin construction in March next year, we expect operation can commence by the end of 2015,'€ he told reporters at the Industry Ministry.

The output of the plant, slated to produce 1.5 million tons of cement per year, would be distributed to surrounding areas, particularly Banten, Greater Jakarta and Lampung, Erwin added.

At present, Bosowa is building a cement plant in Banyuwangi, East Java, which will cost around Rp 773.45 billion. The plant will have a production capacity of 1.5 million tons upon completion in the third quarter next year with target markets in East Java, Bali and West Nusa Tenggara (NTB).

The output of the planned plants in Cilegon and Banyuwangi will help Bosowa to significantly push up its market share in Java from around 4 percent.

'€œWe expect a 10 percent market share in Java with the total output from the two plants,'€ Erwin said.

Bosowa, one of the few successful Indonesian conglomerates, controls a wide ranging of businesses, from infrastructure to finance, especially in the eastern part of the country.

Through its subsidiaries PT Semen Bosowa Maros and PT Semen Bosowa Indonesia, it has gained a strong position in the local cement industry.

Its cement business gives the biggest contribution to the group with a 60 percent share, followed by its automobile dealership (20 percent), infrastructure and energy (10 percent) and other sectors.

The firm is slated to begin operating its cement plant in Makassar, South Sulawesi, later this month. The plant will be able to generate around 1.8 million tons of cement annually.

Along with the operation of its Makassar cement plant, Bosowa is also scheduled to start operation of its liquefied petroleum gas (LPG) terminal in the same city, the development of which is costing Rp 800 billion in investment.

Erwin said that apart from the cement plant, Bosowa would also build a 250-megawatt (MW) coal-fired powerplant in Jeneponto next year, which might take up approximately Rp 3.5 trillion. The new power plant will add to the capacity of its existing coal-fired power plant (2x125 MW) nearby.

Earlier the firm said that the development of the new power plant would anticipate high energy demand from a smelter that it plans to build in early 2015. The smelter, estimated to cost $300 million, is slated to process nickel ore into 10,000 tons of ferronickel annually.

Indonesia will stop mineral ore exports starting next month in order to spur growth in its downstream industry and increase the added value of its exports. A number of companies have already expressed their intention to build smelters locally.