UBS Holcim (SMCB Under review PT 2,300): Awaiting approval from Holcim Switzerland

SMCB plans to build 1.6 mn tpa capacity cement factory in Tuban, East Java, with total investment of US$400-500 mn. The new plan will increase SMCB’s annual capacity to 10 mn.

Sales comment: Cement plant development typically takes 2.5 years to complete. The faster SCMB get the approval, the better. We prefer Indocement (INTP Buy PT16,600) in the cement space, due to its strong management and fundamentals.