Cement firms blast cartel accusation

Adianto P. Simamora, The Jakarta Post, Jakarta

The country's cement producers have denied allegations that they had formed a cartel to fix prices for the commodity on the domestic market.

Jannus Hutapea, legal and corporate affairs director of publicly listed PT Semen Cibinong, said that the country's cement producers had never conspired to prop up cement prices on the domestic market.

"The cartel allegation is absolutely wrong as we have never even discussed cement prices with our competitors," Jannus said during a hearing with the Business Competition Supervisory Committee (KPPU).

The hearing was held Wednesday following complaints from Monopoly Watch, a non-governmental organization, which suspected that the country's cement producers had formed a cartel to fix prices on the local market.

The complaint was made in August amid rising cement prices.

Jannus said the current prices were relatively lower compared with those in neighboring countries.

A senior official of PT Semen Baturaja, who did not disclose his name, shared Jannus' opinion, saying that current cement prices were still very low.

"If the price of cement were to remain lower, Indonesia would suffer a scarcity of cement over the next four to five years as the existing companies won't be able to expand their plants," he said during the hearing.

Data from the Indonesian Cement Association (ASI) showed that the country's cement industry was dominated by four major players, namely the PT Semen Gresik Group (including PT Semen Padang and PT Semen Tonasa), PT Semen Cibinong, PT Indocement Tunggal Prakarsa and PT Semen Andalas Indonesia.

Overall, the four companies account for 93 percent of the country cement production.

World cement giants, including Holcim, Heidelberger and Lafarge, respectively control more than a 60 percent stake in Semen Cibinong, Indocement and Semen Andalas.

Mexico's Cemex SA de CV now owns more than a 25 percent stake in state-owned Semen Gresik, and is planning to purchase another 51 percent stake.

The government is also planning to sell more shares in Semen Gresik as part of this year's privatization program.