Govt increases reference prices of cement<\/p>\n
JAKARTA (JP): The government, under pressure from producers,
\nraised the reference prices of cement across the country by an
\naverage of 40 percent over the weekend in an effort to attract
\nmore investment in the cement industry.<\/p>\n
Lily Rosyana, spokeswoman for the Ministry of Trade, said that
\nthe new reference prices, effective from Friday, are expected to
\ndrive investors licensed to build cement plants to materialize
\ntheir investment plans soon.<\/p>\n
According to official data, the government has issued 23 new
\nlicenses to private companies to construct new cement plants.
\nMost companies have not accomplished their plans.<\/p>\n
According to the Minister of Trade's Decree No.
\n48\/Kp\/III\/1995, the new price of first quality cement at retail
\noutlets in Java is set at Rp 8,290 (US$3.76) per 40 kilogram
\nsack, excluding sales tax, up by 39.79 percent from Rp 5,930, or
\nRp 10,360 per 50 kilogram sack.<\/p>\n
The new reference prices in Sumatra range between Rp 8,290 and
\nRp 10,165 per 40 kilogram sack. The lowest price is found in
\nPadang, where PT Semen Padang is located, and the highest is in
\nboth Bangka and Belitung, two islands off the South Sumatra
\nmainland.<\/p>\n
In Kalimantan, the government has set the new prices from Rp
\n9,920 to Rp 10,165 per 40 kilogram sack. In Bali, Nusa Tenggara
\nand East Timor they range between Rp 8,305 and Rp 9,865.<\/p>\n
The government has set the new prices in Ambon and Ternate in
\nMaluku at Rp 10,130. In Irian Jaya it is between Rp 11,180 and Rp
\n11,970.<\/p>\n
Lily was quoted by Antara as saying that the local reference
\nprices will be reviewed every January and July.<\/p>\n
Investment<\/p>\n
Last year, Minister of Industry Tunky Ariwibowo acknowledged
\nthat the old reference prices were not attractive to companies
\nentering the cement industry because the prices had not changed
\nsince January 1993.<\/p>\n
Minister of Trade Satrio B. Joedono vehemently argued that the
\ngovernment's set prices could not be blamed for the slow-down in
\ninvestment growth because they still promised significant profits
\nto cement companies.<\/p>\n
The old cement reference prices had been continuously violated
\nby almost all cement companies in the last two years. The
\ncompanies, through their marketing arms, sold their product above
\nthe government prices.<\/p>\n
Last year in Jakarta, for instance, cement prices hit a record
\nhigh of over Rp 10,000 per 40 kilogram sack, well above the
\ngovernment set price of Rp 5,930.<\/p>\n
The Indonesian Cement Association has repeatedly suggested
\nthat the government raise the reference prices or even abolish
\nthem.<\/p>\n
A number of officials, including Director General of Chemical
\nIndustries Sujata, predicted that the annual cement crises will
\ncontinue until 1997, the year the expansion projects of a number
\nof major cement factories are expected to start production.<\/p>\n
Sujata has said that demand is projected at 26 million tons
\nthis year but production will likely reach only 24.5 million
\ntons.<\/p>\n
Minister Tunky said Indonesia would import up to five million
\ntons of cement and clinker -- a substance used in the production
\nof cement -- this year to cover the domestic deficit caused by
\nthe wide gap between the supply and demand. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-increases-reference-prices-of-cement-1447893297",
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"sponsor": "Okusi Associates",
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