For Advertorial: Indocement ----- to be published on August 4, 2005

Wed, 03 Aug 2005, 00:00 WIB

Indocement translates vision of sustainable cement initiative into reality
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Cement is an essential material in today's society. As a major
constituent of concrete, cement forms a fundamental element of
housing and infrastructure project, including the construction of
roads, bridges, airports, seaports, water treatment facilities,
schools, hospitals, etc.

The revival of housing and infrastructure development projects
in Indonesia over the last several years has led to an increase
in demand for this important product and has thus benefited
cement producers in the country. Amid the good prospects for the
cement industry, however, cement producers are also facing the
fact that the rising global population places increasing pressure
on essential natural resources, such as land and energy. This
means cement producers with long-term visions of sustainable
development must find ways to use these resources more
efficiently.

Major cement companies have developed a long-term vision of
sustainable development and are committed to implementing
sustainable development in a proper manner. Among them is PT
Indocement Tunggal Prakarsa Tbk, which since 2001 has been
controlled by HeidelbergCement of Germany.

Established in 1975, Indocement has been widely recognized as
a socially and environmentally responsible cement company in
Indonesia thanks to its strong commitment to the idea of
sustainable development.

As a member of the World Business Council for Sustainable
Development (WBCSD) and one of the signatories of the Cement
Sustainability Initiative, HeidelbergCement Group has led
Indocement to operate based on three pillars of sustainable
development: economic growth, ecological balance and social
progress.

Many property projects were halted due to the economic crisis
in the mid-1997, painting a bleak picture for cement producers,
including Indocement. Many companies had huge debts due to the
weakening of the rupiah against the US dollar. However, the bad
news for cement producers is a thing of the past, particularly
for Indocement. The company has refocused its activities on the
core business of producing cement and has taken other efficiency
measures, helping the company to regain its financial strength.

"Since 2004, Indocement has been financially sound. Our
average sales growth rate is 9 percent per annum and we control
about 30 percent of the market," said Indocement president
director Daniel Lavalle.

While efforts to boost its business performance continue,
Indocement has been engaged in numerous projects related to
social and environmental issues under community development (CD)
or social corporate responsibility (CSR) programs, part of its
commitment to be good corporate citizens.

Currently, Indocement operates 12 plants, nine of which are
located in Citereup, Bogor, in West Java; two in Palimanan,
Cirebon, also in West Java, and one in Tajun, Kotabaru, in South
Kalimantan.

For Indocement, living in harmony with the surrounding
community is essential part of assuring the sustainability of
its business. Therefore, as part of its efforts to reduce the
social impact of the company's operations and improve the welfare
of local residents, the company provides job opportunities for
local residents. The company employs over 6,000 people, many of
them from villages near where the plants are located.

Daniel Lavalle said employee welfare received a great deal of
attention from management and was regularly updated and improved
from time to time.

"The year 2004, for instance, witnessed the revision of
Indocement's Collective Labor Agreement, with a strong focus on
ethical issues," he said. "This communication forum, which is
held every two years, serves as a means of discussing employee
welfare covering benefits and allowances," Daniel Lavalle.

He said Indocement always made safety and health issues key
priorities, and did everything it could to provide a safe and
healthy working environment. "Indocement has been able to
minimize the number of accidents by employing rigorous
occupational health and safety standards in line with
international best practices," he said.

Besides providing job opportunities, Indocement has also
undertaken a wide range of Community Development projects such as
building roads, bridges, water distribution systems, schools and
mosques. Furthermore, Indocement is providing mobile health
services and support education through training courses for local
residents in areas, such as farming, duck or sheep breeding, the
production of handicrafts, etc.

At Indocement, all Community Development (CD) projects are
designed based on the requirements from local communities, said
Indocement director Iwa Kartiwa. For example, small and medium
enterprises (SMEs) surrounding Indocement's plants in Citereup
were in dire need of capital for their ventures and "so we
collaborated with bank BRI in launching a loan-lending program.
Locals can take advantage of loans with low interest rates", he
said.

Indocement also has scholarship programs that help children
from low-income families and outstanding students.

In 2004, the company allocated some Rp 12 billion for
Community Development programs in several villages.

Meanwhile, as an environmentally responsible company,
Indocement finds it essential to take concrete steps to protect
the environment as part of its commitment to sustainable
development, both locally and globally.

Local environments are sensitive to dust emissions that must
be contained using state-of-the-art technology.

With regard to emission reductions, Indocement has decided to
change most of the filters on its kilns in order to improve their
performance and comply with national and international
environmental standards. Furthermore, emission-monitoring
equipment is being installed on each individual kiln to
continuously monitor emissions, Daniel Lavalle said.

CO2 emissions -- resulting from the combustion of fossil fuels
in the cement kilns and the de-carbonization of calcium carbonate
inherent in the process -- contribute to global CO2 emissions and
have become a global issue due to their likely influence on
climate change.

The Kyoto Protocol has introduced new flexible mechanisms to
help curb the increase of CO2 emissions.

Indocement has introduced such an initiative -- a Clean
Development Mechanism (CDM) project -- and was the first
Indonesian company to do so. In this regard, Indocement uses
alternative fuels such as rice husks, palm kernels and sawdust to
replace fossil fuels, while using various alternative materials
in the production process.

The CDM project is now being implemented at all of the
company's factories.

To implement the CDM project, Indocement signed an agreement
on CO2 emissions reduction with the World Bank in Cologne,
Germany on June 9, 2004. Under the agreement, Indocement will
collaborate with Prototype Carbon Fund (PCF), one of the World
Bank's funding arms. This represents the first undertaking of its
kind in Indonesia, and one of the first in the cement industry
anywhere in the world.

The use of alternative materials results in reduced
requirements of clinker and hence a reduction in the consumption
of energy. The reduction of clinkers contributes directly to less
decarbonation. But using alternative materials also means that
Indocement will be encouraged to use diversified materials taken
from natural resources and thus, this will further contribute to
sustainable national development. The project uses clean
technology that will have an adverse impact on safety and health
of the local community. In addition, with the job of collecting,
choosing and transporting alternative fuels and materials needed,
the project also means new job opportunities.

Indocement's strong commitment to operate the company in a
responsible and sustainable manner through Community Development
(CD) or Corporate Social Responsibility (CSR) programs has led
the company to receive numerous awards. Among the most recent
awards that Indocement has received are the OHSAS 18001
Certification for the implementation of Occupational Health &
Safety Assessment Series in September 2004, the Superbrands Award
2003-2004 in October 2004 from UK-based Superbrands Organization
and the Green Rating for implementing environmental safety
measures that exceed the minimum statutory requirements from the
Ministry of Environment in October 2004. On July 21, Indocement
also achieved the accreditation for laboratory testing (SNI 19-
17025-2000) from National Accreditation Committee of Indonesia.

The numerous awards Indocement has earned are, surely, only
part of the evidence of the company's strong commitment to a
sustainable cement industry. Thus, Indocement translates long-
term vision of sustainable development into reality.

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