More cement imported to curb prices<\/p>\n
JAKARTA (JP): Minister of Industry Tunky Ariwibowo announced
\nyesterday that Indonesia will import some 800,000 tons of cement
\nover the next three months to cover shortages at home and to curb
\nthe steep price rise.<\/p>\n
\"Increasing the supply is the only way to curb the soaring
\nprices,\" the minister said, dismissing allegations of political
\nmotives or market manipulation behind the severe cement shortage,
\nwhich has hit Jakarta and other major cities over the past three
\nweeks.<\/p>\n
Tunky said that Indonesia had initially planned to import
\naround 400,000 tons of cement and clinker from October to
\nDecember in addition to the 600,000 tons of imports already
\ndelivered, but the persistently severe shortages in recent weeks
\nprompted the government to double cement imports to 800,000 tons
\nover the next three months.<\/p>\n
\"This measure will bring total imports to around 1.4 million
\ntons for the whole year, up significantly from the initial
\nprojection of one million tons,\" the minister said after meeting
\nwith President Soeharto.<\/p>\n
He said that Indonesia imported around 600,000 tons in the
\nJanuary-September period.<\/p>\n
Cement prices in Jakarta and other major cities have soared by
\nover 35 percent to around Rp 10,000 (US$4.59) per 40 kilogram bag
\nfrom the government-set reference price of Rp 7,200 early last
\nmonth due to the shortage of supply.<\/p>\n
Tunky said the steep price rise was caused mainly by the
\nsevere shortage due to the almost 20 percent increase in domestic
\ndemand, much higher than the 12 percent rise estimated by the
\ngovernment.<\/p>\n
The latest wave of price increases, the second since July, has
\nbeen widely suspected as having been engineered by cement
\nproducers and distributors, who colluded to raise prices.<\/p>\n
Coordinating Minister for Political Affairs and Security
\nSoesilo Soedarman even went as far as alleging a political motive
\nbehind the acute cement shortage, blaming it on remnants of the
\nbanned Indonesian Communist Party (PKI).<\/p>\n
Head of the Armed Forces information center Brig. Gen. Syarwan
\nHamid said Saturday that the military would take stern actions
\nagainst speculators, who piled up cement stocks to raise prices.<\/p>\n
He said that a special military team has been established to
\nlocate speculators and manipulators who intentionally tried to
\ndestabilize the cement market.<\/p>\n
Tunky said that since all cement factories have been operating
\nat full capacity, the only way to cope with the problem is to
\nincrease imports.<\/p>\n
Several ministers, including Minister of Trade Satrio
\nBudiardjo Joedono and State Minister for Public Housing Akbar
\nTandjung, however, took exception to Tunky's arguments about the
\nhigher-than-expected increase in demand and the soaring prices.<\/p>\n
Engineered<\/p>\n
Joedono said that the supply shortage was \"engineered\" by
\nproducers, who themselves controlled the ownership of most cement
\ndistributing companies.<\/p>\n
Tandjung shared Joedono's view that the sharp rise in the
\ncement price was not caused by the shortage of the supply, which
\nhe said remains much higher than demand.<\/p>\n
\"The supply scarcity occurred because many people hoarded
\ncement to push up prices,\" Tandjung said<\/p>\n
Tunky contended that the higher-than-expected increase in
\ndemand was caused by the sharp increase in construction projects
\nin Jakarta and West Java during the January-August period.<\/p>\n
\"As you see, many contractors are rushing with their project
\nconstruction during the prolonged dry season and many government
\nprojects usually start in the third quarter\" he said about the
\nreasons for the astronomical increase in demand for cement.<\/p>\n
In a related development, Sudwikatmono, president of PT
\nIndocement, the country's largest single cement producer, also
\nblamed the unusually high increase in the cement demand for the
\nsteep price rise.<\/p>\n
Sudwikatmono announced yesterday that the demand on Java had
\nrisen by 30 percent.<\/p>\n
He added, however, that the cement prices would decline again
\nwhen the additional imports arrive within the next few weeks.<\/p>\n
Indocement itself, he said, would import two million tons of
\ncement and clinker from China, Malaysia and Thailand within the
\nnext 15 months.<\/p>\n
Tunky said that many property developers have speeded up the
\npace of their construction projects in anticipation of the rainy
\nseason, which usually begins in October.<\/p>\n
Indonesia's total cement production capacity reaches around
\n21.3 million tons a year and annual demand was estimated at 20.1
\nmillion tons.<\/p>\n
Tunky said that the cement industry's capacity had increased
\nby around 3.3 million tons with the recent expansion of the East
\nJava-based Semen Gresik and the West Sumatra-based PT Semen
\nPadang by 2.3 million tons and one million tons, respectively.
\n(hen\/rid\/vin)<\/p>",
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"sponsor_url": "https:\/\/okusiassociates.com"
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