Cement exports rise 200 percent in first quarter: ICPA
JAKARTA (JP): Cement exports rose 200 percent to 2.2 million tons in the first quarter of the current year from the same period last year, according to the Indonesian Cement Producers Association.
The association said cement exports began to pick up in February when a number of local producers began to sell their products overseas to compensate for sluggish demand in the domestic market.
In February, cement exports surged to 900,000 tons from an average of 300,000 tons per month in 1998. In March, cement exports further increased to 1.02 million tons, an increase of over 157 percent compared to the 397,160 tons exported in the same month last year.
The association said exports in April surged 152 percent to over 1.03 million tons from 399,706 tons in April last year.
It added that exports were expected to reach around one million tons in May, about a 175 percent increase over the 366,944 tons which were exported in the same month in 1998.
Domestic cement demand reached 6.22 million tons in the first quarter of the current year, an increase of about 24 percent over the 5.02 million tons recorded in the same period of 1998.
Local demand in March reached 1.13 million tons, while in April it was 1.5 million tons.
The director of nonorganic chemical industries at the Ministry of Trade and Industry, Ida Bagus Agra Kusuma, said cement exports this year could exceed the ministry's target due to an increase in orders received by local producers.
This year, cement exports are projected to increase to some 11 million tons, an increase of 150 percent compared to 4.5 million tons in 1998.
Indonesia saw over a 450 percent increase in its cement exports in 1998 from slightly over 800,000 tons in 1997, and this trend is likely to continue this year, he said.
Indonesia exports its cement to more than 20 countries in Asia, South America, the Middle East and Africa, with Bangladesh the biggest importer. Mexico, Chili and Egypt are emerging as new markets for Indonesian cement.
"Most producers currently are relying on overseas markets to offset the slump in the local market. Exports are badly needed to maintain the utility level of the their plants," he said.
"Our cement is currently very competitive in overseas markets due to the sharp depreciation of the rupiah," he said.
Production
Agra said cement producers could not reduce production because local demand had waned because that would affect the condition of their machinery and increase production costs.
Most of the country's cement producers are operating at 70 percent of production capacity. However, this is an increase over the 65 percent production capacity cement producers averaged last year.
Agra said some big cement producers, including state-owned PT Semen Gresik and PT Semen Padang, had upgraded their port facilities while other producers were ready to raise their production capacity in order to fill the increased number of export orders.
The biggest exporters during the first quarter of this year were PT Semen Cibinong, Semen Padang and PT Indocement Tunggal Perkasa, he said.
He said PT Semen Gresik, which is affiliated with Cemex SA de CV of Mexico, planned to increase its exports by 80 percent to around 2.5 million tons this year.
Agra predicted domestic demand would continue to be sluggish this year despite the first quarter's slight improvement.
This year's local demand for cement is projected at 20.8 million tons, only slightly higher than 1998's 19.5 million tons.
In 1998, the country's total cement production dropped to 22.3 million tons from 27.5 million tons the previous year due to the sharp decline in domestic demand.
Last year, over 40 percent of the domestic demand for cement was filled by PT Semen Gresik, Agra said.
Agra said cement production was expected to increase to over 33 million tons this year to meet the projected rise in demand from both the overseas and local markets. Around 11 million tons of the cement will be exported, he added.
"We hope to be able to export at least six million tons in the first semester and expect to export at least five million tons in the second semester," he said. (gis)