Cement consumption to reach record high this year<\/p>\n
Adianto P. Simamora, The Jakarta Post, Jakarta<\/p>\n
Although the economy is still struggling to recover from the
\ndevastating impact of the 1997 economic crisis, domestic cement
\nconsumption is expected to jump to an all-time high of 29 million
\ntons this year, according to the Indonesian Cement Association
\n(ASI).<\/p>\n
This estimate exceeds even the precrisis domestic consumption
\nlevel of 27 million tons.<\/p>\n
The association, however, did not say what was behind this
\nexpected robust demand. But industry experts said that new
\nhousing projects and renovations would drive demand this year.<\/p>\n
Tim Clough, president of publicly listed PT Semen Cibinong,
\ntold The Jakarta Post that new housing projects would boost
\ndomestic cement consumption this year to precrisis levels.<\/p>\n
Ahmad Solichin, a cement sector analyst at securities firm
\nVickers Ballas, said that although the overall construction
\nsector had been in the doldrums, cement consumption had been on
\nthe rise since 2000, thanks to housing construction.<\/p>\n
\"Demand for cement will hit the precrisis level this year with
\nsome 78 percent to be used mainly for the construction of new
\nresidential houses and renovations,\" Ahmad said.<\/p>\n
According to property consultant Panangian Simanungkalit, some
\n110,000 new houses will be built this year.<\/p>\n
Data from the ASI shows that in the first six months of this
\nyear, domestic cement consumption reached 12.6 million tons.<\/p>\n
To meet the higher demand this year, the country's cement
\nfirms will have to boost their average capacity to 72 percent
\nfrom 65 percent last year. In 1998, the average capacity was only
\n50 percent.<\/p>\n
Domestic demand for cement plummeted at the start of the
\nregional economic crisis, which hit Indonesia in mid-1997. Demand
\ndropped by 31 percent to 19 million tons in 1998 from 27 million
\ntons in 1997.<\/p>\n
The property sector, which had been fueling demand for cement
\nbefore 1997, was badly affected by the crisis, forcing many
\ndevelopers out of business.<\/p>\n
Elsewhere, ASI said cement exports this year would reach eight
\nmillion tons, lower than last year's 9.5 million tons.<\/p>\n
Indonesia exported some 4.5 million tons of cement and clinker
\nin 1998 following the plunge in domestic demand, while production
\nreached some 22 million tons.<\/p>\n
The country's cement producers are Semen Gresik, Indocement
\nTunggal Perkasa, Semen Padang, Semen Baturaja, Semen Cibinong,
\nSemen Tonasa, Semen Bosowa Maros and Semen Kupang.<\/p>",
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"sponsor": "Okusi Associates",
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