Construction sector pushes cement demand
JAKARTA (JP): The growing construction industry will increase Indonesian cement demand to 30 million tons next year from about 28 million tons this year and 15.4 million tons last year, the country's largest cement producer predicted yesterday.
President of the publicly listed PT Indocement Tunggal Perkasa (ITP), Sudwikatmono, said yesterday the demand for cement would increase steadily to reach 67 million tons in 2005.
"We will therefore build two more cement plants, one in Citeureup, West Java and another one in South Kalimantan with a total combined investment of around US$728 million (Rp 1.74 trillion)," Sudwikatmono added.
He said total investment for the Kalimantan plant was $499 million and the one in Citeureup $229 million, Sudwikatomono said after the company's shareholders meeting.
He said the Citeureup plant was expected to be in operation by mid-1999 and the Kalimantan plant by mid-1998. Both plants would each have an annual capacity of 2.5 million tons.
He said the two new plants would expand Indocement's total cement capacity to 15 million tons per year in 1999 from 10 million tons at present.
"ITP's production capacity will continue to be expanded to reach 20 million tons by 2000," he said, adding that Indonesia would not see any cement glut as predicted by some analysts.
President of PT Semen Cibinong Hashim Djojohadikusumo early this month predicted that Indonesia would have a cement oversupply of between three to four million tons a year from 1998 to 2000.
"No I don't think there will be cement oversupply during those years," Sudwikatmono added.
He contended, however, an oversupply might occur if all the cement projects already licensed would be completed on schedule.
According to Indocement's report, there are now nine cement makers with a different production capacity. They include PT Indocement Tunggal Perkasa, PT Semen Cibinong, PT Semen Gresik, PT Semen Andalas Indonesia, PT Semen Padang, PT Semen Baturaja, PT Semen Tonasa, PT Semen Kupang and PT Indo Kodeco Cement.
Sudwikatmono said yesterday that ITP currently commanded 40 percent of the cement market in the country.
He said Indocement recorded a total net profit of Rp 551 billion ($225.8 million) in 1996.
He said the company would distribute around Rp 169.01 billion as dividend to its shareholders, would keep Rp 25 billion for company's cash reserves and Rp 352.8 billion in retained earnings and would allocate Rp 4.67 billion for the poverty alleviation program through Yayasan Dana Kesejahteraan Mandiri foundation.
Finance director of the firm Benny S. Santoso said Indocement projected a 15 percent in next profit this year. (09)