Cement supply to increase by 16 percent to 11.7m tons

JAKARTA (JP): Minister of Industry Tunky Ariwibowo said here yesterday that the cement supply will be raised by around 16 percent in the second semester of this year to around 11.7 million tons.

Speaking to newsmen following a meeting with President Soeharto, Tunky said that the 16 percent increase in the cement supply will be adequate to meet the rising demand in the country.

The minister said the planned increase in the cement supply in the second semester will be lower than the 18 percent increase made in the first six months of this year.

He said he is optimistic that the lower increase in the cement supply will not destabilize cement trading in the country as the expected increase in demand will not reach 16 percent.

Tunky said the sharp increase in demand in Jakarta and some other parts of the country in the last few weeks was not real as it was only caused by "a psychological factor."

"Rumors of the supply shortage prompted institutional buyers to increase their cement reserves for fear that they would not have enough stock for their ongoing projects," he said.

The minister said that cement producers are now encouraged to sell the cement directly to institutional buyers rather than through their appointed agents to avoid speculative trading on the market.

"We also encourage producers to increase the production of cement of lower quality such as mixed cement, mansory cement, portland and mozoland cement for individual buyers," he said.

Several approaches, the minister said, have been set forth to meet the 16 percent increase in the country's cement production during the second half of the year, the minister said.

The minister said Indonesia will also import around 50,000 tons of cement and 325,000 tons of clinker from Thailand, South Korea and China during the second semester so that a number of cement factories will be able to optimize their capacity utilization.(hen)