Australian-based BlueScope Lysaght Indonesia, which produces an array of steel products, plans to expand its business by building 10 factories in Indonesia between now and 2016.

Willius Suwandana, the president director of the company, said on Friday that the firm recocognized the advantages of expanding its work in the coated-steel business in Indonesia.

He said investment for a factory that should produce about 1,500 tons of coated-steel products would cost around $500,000. This makes the total cost for the plan at around $5 million.

Willius said the company is eyeing Semarang, Makassar, Palembang and Balikpapan as potential sites for new factories.

“These factories will help fill demand from the local market. BlueScope Lysaght’s factory in Cibitung, West Java, will be focused on fulfilling demand from big projects,” Willius said, adding that factories in 10 cities would help cut distribution costs for consumers.

In the Cibitung plant, The company manufactures rollforming, cladding and associated building products.

BlueScope Lysaght will get its supply of raw material from BlueScope Steel Indonesia. Almost 20 percent of BlueScope Steel products are set aside to fill demand for coated-steel in Indonesia.

“BlueScope Steel itself has a production capacity of 265,000 tons per year, so it still needs other imported products,” Willius said.

Lucia Karina, the country vice president for corporate and external affairs at BlueScope Steel Indonesia, said that the BlueScope group aims to boost production of BlueScope Steel, but she did not elaborate on the capacity expansion.

The chairman of BlueScope Steel, Graham Kraehe had previously said the company had invested $250 million for its business in Indonesia.

“We are not hesitant to pour money here because Indonesia is an important market for BlueScope,” said Paul O’Malley, managing director and chief executive of BlueScope Steel.

Both BlueScope Lysaght and BlueScope Steel are part of Australian-based steel company, BlueScope Steel Limited.

The BlueScope group has operations in many countries including in New Zealand, China, Vietnam, Brunei, Singapore, Indonesia, Malaysia, Thailand, India, Sri Lanka, Fiji, Vanuatu, and New Caledonia.

It also has operations in the United States