Indocement hike cement prices

JAKARTA (JP): A rise in cement prices was essential to cover rising production costs, president of the country's largest cement producer PT Indocement Tunggal Prakarsa, said yesterday.

Sudwikatmono said the rupiah's depreciation against the dollar had increased the production cost of cement as some raw materials like gypsum from Thailand and coal from Australia were imported.

Sudwikatmono said the value of import components in cement production reached about 3 percent of the total production cost.

"As imported materials were paid in dollars, cement producers, with the sharp drop in rupiah, should pay more for imports," Sudwikatmono told reporters at the palace after attending the opening ceremony of the Ministry of Tourism, Post and Telecommunications' work meeting.

Sudwikatmono said cement producers had increased the factory price of cement between 3 percent and 5 percent and the move was approved by the Association of Indonesian Cement Producers.

He said state-owned cement producers like PT Semen Gresik and PT Semen Baturaja had increased the factory price of their cement earlier than Indocement.

"Other companies have increased factory prices of their cement. Why can't we follow suit?" he said.

Sudwikatmono said the increase in the price of cement had given more profit to distributors.

Sudwikatmono warned cement distributors not to raise the retail cement prices too high since it would have a bad impact on the public. Indocement was ready to stage market operations to reduce the price if distributors raised it too high.

"I guarantee the increase will not have a bad impact on the public," he said.

Local newspapers reported the retail cement price in several cities in Central Java, for example, increased to between Rp 12,500 (US$4.38) and Rp 14,000 per 50-kilogram bag, higher than the indicative retail price of Rp 10,000 per bag set by the government for the province.

The government periodically sets the retail price of cement in every province.

The Minister of Trade and Industry Tunky Ariwibowo previously warned cement makers not to increase the cement price amid this tight monetary policy.

Sudwikatmono said Indocement imported 30,000 tons of cement from Japan in anticipation of cement scarcity in the country. (jsk)