Five cement producers win export licenses

JAKARTA (JP): The government has licensed five local cement producers to export in the first quarter of this year, a Ministry of Trade official says.

The director general of metal, machinery and chemical industries, Effendi Sudarsono, said Wednesday that they were allowed to export because there would be an oversupply of about two million tons of cement this year.

The five cement producers are PT Indocement Tunggal Prakarsa, PT Semen Cibinong, both in West Java, PT Semen Andalas Indonesia in Aceh and North Sumatra, PT Semen Padang in West Sumatra and PT Semen Tonasa in South Sulawesi.

Effendi said the export licenses could be revoked immediately if there was a domestic cement shortage.

"The domestic market remains a top priority. The five firms must import if there is a domestic shortage," he said, adding that the five companies were only allowed to export around 215,000 tons between January and March.

Director of Non-Metal Mineral Industries Agra Kusuma projected earlier that domestic demand for cement would grow 13 percent to 28.8 million tons for 1997 from 25.5 million tons for 1996.

Because the domestic cement supply would reach 30.9 million tons this year, Indonesia would have an oversupply of two million tons, he said.

Agra said the two million-ton oversupply would result from three big extensions to existing plants in Java which would add an installed capacity of 6.2 million tons a year.

The plants were operated by PT Semen Nusantara with an annual installed capacity of 2.6 million tons, state-owned PT Semen Gresik with 2.3 million tons and Indocement with 1.3 million tons, he said.

On the export licenses, the chairman of Indonesian Cement Association, Soepardjo, asked the government to be consistent in its policy on cement exports.

"Please don't cancel the licenses all of a sudden, because that could damage our credibility overseas," he said.

He said earlier that the country's cement producers were sometimes considered unreliable by foreign buyers because they often cut off supply abruptly to follow the government's orders that they must meet domestic demand. (04)