Cement rescheduling won't affect supply

Cement rescheduling won't affect supply

JAKARTA (JP): Director General of Domestic Trade at the
Ministry of Industry and Trade Ilchaidy Ilyas said yesterday the
government's decision to review several cement projects would not
affect future supply.

He said those cement projects, if postponed, would lower the
country's cement production growth in the future but the demand
for cement would also decline due to the postponement of the
country's large industrial infrastructure projects.

"Therefore, we need not worry about (shortages of supply)," he
was quoted by Antara as saying after inaugurating the electrical
wire factory of PT Karya Yasantara Cakti in Cikampek, West Java.

The government recently announced a retrenchment measure to
cope with the rupiah's depreciation against the U.S. dollar,
which included the postponement and review of 156 government
projects worth Rp 111.18 trillion (US$38 billion).

Eighty-one projects have been postponed and 75 others are
under review.

The reviewed projects include six government cement projects:
Tuban V of PT Semen Gresik, Kupang III of PT Semen Kupang, Jabar
I of PT Semen Padang, Jabar II of PT Semen Padang, Tonasa V of PT
Semen Tonasa and Jambi I of PT Semen Padang & PT Semen Baturaja.

Minister of Finance Mar'ie Muhammad said last week that based
on the results of a study, projects would either be continued,
postponed or rescheduled.

Ilchaidy said the cement projects were designed to anticipate
the country's growing demand for cement in the construction and
toll road sector in the future.

But a significant growth in cement demand was not likely to
occur due to the postponement of many toll road and construction
projects.

In the toll road sector alone, 36 projects have been postponed
and 17 projects are under review.

Ilchaidy said there was currently an oversupply of cement in
Indonesia, which reached 2 million tons a year.

He said if local demand exceeded the country's production
capacity in the future, Indonesia could still import from
Thailand which now produced more cement than demanded by the
local market.

According to Ilchaidy, Thailand's cement production totals 32
million tons a year, while the country's demand has declined to
20 million tons a year amid the monetary crisis which has
battered the country since July. (jsk)