Indocement boosts output by 1.3m tons<\/p>\n
JAKARTA (JP): PT Indocement Tunggal Prakarsa will expand the
\nproduction capacity of its cement plant in Cirebon, West Java, by
\n1.3 million tons per annum with an investment of US$142 million.<\/p>\n
The company's president, Sudwikatmono, told journalists
\nyesterday that 70 percent of the cost for the expansion will be
\nfinanced by loans.<\/p>\n
Indocement, the country's largest cement producer, yesterday
\nsigned an agreement with Marubeni Corporation of Japan for the
\narrangement of loans worth $100 million with a maturity of 11
\nyears.<\/p>\n
Indocement also signed a contract with a consortium of
\nKawasaki Heavy Industries, Ltd. of Japan and Marubeni to supply
\nmachinery and equipment for the expansion.<\/p>\n
With the expansion to be finished in early 1997, Indocement,
\nwhich currently controls almost 50 percent of the country's total
\nannual cement output of 21 million tons, will increase its total
\noutput capacity to 11.3 million tons.<\/p>\n
Indocement, besides acquiring the Cirebon plant from PT
\nTridaya Manunggal Perkasa Cement, also holds a 51 percent stake
\nat Indo Kodeco's cement plant in South Kalimantan, which is
\nexpected to start operation in 1997 to produce 2.3 million tons
\nof cement annually.<\/p>\n
Daddy Hariadi, a director of Indocement, said that although
\nIndocement has conducted massive expansions in a number of its
\nplants, it will not able to meet the rapidly growing demand of
\nthe domestic market.<\/p>\n
He predicted that the current shortage of cement supplies will
\ncontinue until 1997, when the expansion projects of a number of
\nleading cement factories will be completed and production begins.<\/p>\n
Minister of Industry Tunky Ariwibowo said recently Indonesia
\nwould import up to five million tons of cement and clinker -- a
\nsubstance used for the production of cement -- this year to cope
\nwith the supply shortage.<\/p>\n
Director General of Chemical Industries Sujata said that
\nIndonesia's cement demand is projected at 26 million tons this
\nyear but production will likely reach only 24.5 million tons.<\/p>\n
Reference<\/p>\n
To attract more private investments for cement manufacturing,
\nSudwikatmono suggested yesterday that the government revise local
\nprice references of cement, which have remained unchanged since
\nJanuary 1993, or remove them altogether<\/p>\n
The government, in this case the Investment Coordinating
\nBoard, has issued licenses for 23 new cement projects. However,
\nmost of them have not been utilized.<\/p>\n
\"If some of those idle licenses are offered to me, I'll surely
\ntake them and then optimize them,\" Sudwikatmono challenged.<\/p>\n
Minister Tunky has acknowledged that financial constraints and
\nthe government-set local price references are the main barriers
\nfor new investments in the establishment of new cement factories.<\/p>\n
The price references have been virtually violated by almost
\nall cement producers, who sell their products far above the set
\nlevels.<\/p>\n
As reported by Antara yesterday, cement prices in Palembang of
\nSouth Sumatra dropped to Rp 7,500 ($3.4) per 40-kilogram sack
\nfrom Rp 9,000 last week and prices in Semarang of Central Java
\ndipped to Rp 8,750 from Rp 10,500. Price references for both
\ncities are Rp 5,930.<\/p>\n
Minister of Trade Satrio B. Joedono, who is responsible for
\nprice references, has hinted that domestic prices should be
\nallowed to move within the international price range, otherwise
\ninvestors will not be interested in building new cement plants.
\n(rid)<\/p>",
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"sponsor": "Okusi Associates",
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