La Farge Indonesia looking to 23 percent increase in sales

Andi Haswidi, The Jakarta Post, Banda Aceh

The world's largest cement producer, La Farge, sees a growing market in Indonesia, and predicts its Aceh subsidiary will book a 23 percent increase in sales this year to 1.6 million tons from 1.3 million tons last year.

"Many studies, including ours, say that the average increase throughout the country will be around 6 percent. But Aceh and other regions near it are still actively involved in reconstruction," PT Semen Andalas Indonesia's senior vice president for commercial and logistics Haryanto Chandra told reporters Tuesday in Banda Aceh. Semen Andalas is La Farge's Aceh subsidiary.

Haryanto said that the company's cement plant, located at Lhoknga beach, had been badly damaged by the tsunami disaster in December 2004.

"Since then, we have been importing all of our products from a sister company in Langkawi, Malaysia," he said. "In 2005, total imports amounted to 1 million tons, and these then increased to 1.3 million last year," he said.

According to Haryanto, the company had consistently controlled between four and five percent of the Indonesian cement market from year to year. Now the company hoped to increase its share through the construction of another plant at Langkat in North Sumatra.

"About the plant in Langkat, we are still at the feasibility-study stage. No commitment has been made yet. However, we are also open to the possibility of constructing further plants in other areas," Haryanto said.

The tsunami caused some $100 million-worth of damage to the firm's cement plant, and about 200 of its employees were killed, Haryanto said, while stressing that the company was committed to staying in Aceh and had allocated approximately $167 million for rehabilitation work and new investments.

"About $17 million has been spent on cleaning the factory and the area around it from the debris left by the tsunami. The work includes building a breakwater, upgrading buildings and structures, and preparing escape routes just in case another tsunami strikes," communications manager Tri Rachman Batara said.

Other rehabilitation work, such as the rebuilding of the plant's 35-megawatt power plant and the reopening of a quarry, was still underway.

"We expect the plant to be fully operational again by the end of 2008," Tri said.

Apart from rehabilitating the factory, the company has also been actively pursuing its corporate social responsibility programs.

"After the tsunami, we spent $5 million on rehabilitating the area, including building 274 houses in this subdistrict and another 274 in another area, plus we have also been active in helping the social economy to get back on track through the holding of a series of training courses and the granting of scholarships," Tri explained.