Low demand hurting cement production<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The country's cement output is expected to grow by a maximum of 3
\npercent this year, falling short of the initial target primarily
\ndue to low domestic demand, according to the Indonesian Cement
\nProducers Association (ASI).<\/p>\n
ASI said on Monday the industry only saw a 0.4 percent rise in
\ndomestic demand during the first semester, from the same period
\nlast year.<\/p>\n
\"Total national demand in the January-June period reached
\n12.62 million metric tons, a slight increase from 12.56 million
\nmetric tons the year before,\" ASI said in a statement as quoted
\nby Antara.<\/p>\n
The association predicted earlier that the cement output would
\ngrow by between 5 to 10 percent this year on the back of rising
\nlocal demand. Cement output in 2002 grew by 6.8 percent to 27.19
\nmillion metric tons.<\/p>\n
President of the country's largest cement producer PT Semen
\nGresik Satrio confirmed the weaker outlook.<\/p>\n
He said that while there would be an increase in demand in the
\nsecond half of the year, the pace would not be fast enough to
\nmeet the initial output projection.<\/p>\n
\"We're expecting a rise (in demand) in the second semester --
\nin fact, demand in July-August already increased by 11 percent,
\nbut toward the year's end, it would only grow an average 2 to 3
\npercent,\" he said.<\/p>\n
Satrio said that as of June, the company's total sales volume
\nstood at 5.41 million metric tons, a decline from 5.65 million
\nmetric tons booked in the same period in 2002, most of which went
\nto the domestic market.<\/p>\n
The figure included output from the company's two
\nsubsidiaries, PT Semen Padang and PT Semen Tonasa.<\/p>\n
Analysts have attributed the low demand to a slow pace of
\nrecovery in the property sector, as well as the slow progress of
\ngovernment development projects.<\/p>\n
The slower progress in government-funded projects was
\nindicated in the low realization of state budget development
\nexpenditures. Of the full-year target of Rp 65.1 trillion, the
\nrealization in the first semester stood at Rp 14.1 trillion.<\/p>\n
A stronger growth in the cement industry is considered crucial
\nfor the economy, not only because the industry employs many
\nworkers, but also because it would be seen as a clear sign of an
\neconomy moving toward recovery.<\/p>\n
As reported earlier, PT Indocement Tunggal Prakarsa and PT
\nSemen Cibinong, respectively the country's second and third
\nlargest cement producers, recorded a decline in their first-
\nsemester net profits because of the low demand.<\/p>\n
Indocement and Semen Cibinong together handle around half of
\ndomestic cement sales, while the remainder is dominated by state-
\nowned Semen Gresik.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/low-demand-hurting-cement-production-1447893297",
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"sponsor": "Okusi Associates",
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