Govt to revoke cement licenses
Govt to revoke cement licenses
JAKARTA (JP): The Central Java office of the Investment
Coordinating Board wants the revocation of 11 licenses for the
establishment of cement plants in the province because their
sponsors have failed to start the projects after some years.
The office's chief, Soedarsono, told Antara in Semarang over
the weekend that his office has asked the government to revoke
the licenses because the would-be investors, whose licenses were
approved by the Investment Coordinating Board (BKPM) in the
period between 1991 and 1994, did not show any signs of starting
the construction of their cement projects.
A government ruling says that any investment license can be
revoked if its sponsor fails to start its project in the three
years after being granted it.
The 11 companies holding the licenses for the cement projects,
with an annual production capacity of between 600 tons and 3.5
million tons, include PT Pantja Mekar, which plans to construct a
cement plant in Grobogan, PT Makmur Jaya Utama in Pati, PT Java
Semen in Grobogan, PT Semen Gombong in Gombong, PT Himkonam
Pertiwi in Grobogan, PT Semen Wonogiri in Wonogiri and PT
Tensindo Semen in Pati. All these firms received their licenses
in 1990 and 1991.
The other sponsors of the cement projects also include PT
Gunung Ngadeg Djaja and PT Patriot Global Semen, which received
licenses in 1992 and 1993.
Soedarsono said the main reason for the delayed construction
of the cement projects is related to the poor knowledge of the
investors on the conditions at the sites.
But a director of the largest cement producer in Indonesia, PT
Indocement Tunggal Prakarsa, said in a hearing with the House of
Representatives' Commission VI here last week that the main
barrier for the establishment of new cement plants is the
unfeasibility. of such projects.
The director, Ibrahim Risjad, told the hearing that the rate
of return on investment of a cement plant is very low.
He said high interest rates and marginal profits from the
cement industry have caused investors to be reluctant to realize
their commitment to build new cement plants.
Cement prices on the domestic market are determined by the
government with its local price reference system.
Ibrahim said it needs an investment of about Rp 800 billion
(US$345 million) to establish a cement factory with an annual
production capacity of one million tons.
Indonesia's cement plants have a current total production
capacity of 27.9 million tons, while demand is predicted at 28.5
million tons this year. (kod)