Cement firms blast cartel accusation

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.