Semen Andalas suffers losses of Rp 2.4b

JAKARTA (JP): PT Semen Andalas Indonesia suffered a total loss of Rp 2.4 billion (US$1.1 million) in the first seven months of this year due to a 15-day stop in production activities during the period.

The company's president, Martin R. Wilkes, said in Banda Aceh, the capital of Aceh, on Saturday that his company stopped its production activities because it was holding a large volume of cement stocks in its warehouses.

As of June 30, for example, the company had stockpiled 44,472 tons of cement, he said.

Martin said his company halted its production activities for four days in January, four days in April and seven days last month.

He explained that demand for Semen Andalas cement had been low during the last six months.

The government has limited the marketing areas of the country's cement producers. Semen Andalas's marketing areas include North Sumatra, Riau, and its base province of Aceh.

Semen Andalas, with an installed annual production capacity of 1.5 million tons of cement, produced an average of 3,000 tons per day during the last seven months, while the market's absorption averaged only 2,000 tons.

Semen Andalas was inaugurated by President Soeharto in 1983 as the country's only foreign-owned cement firm with an initial annual production capacity of one million tons.

Martin said his company planned to expand its capacity from the current level of 1.5 million tons per annum to three million tons.

To finance its expansion project, he added that the company would seek funding from the country's capital markets through an initial public offering of a portion of its shares.

He suggested that the government ease exports of cement so that cement companies would not be forced to halt production activities at a time when cement demand was decreasing.

"A flexible policy on exports and imports of cement will ensure more stable cement supplies and prices and create a conducive climate for new investors to enter the cement industry," Martin was quoted by Antara as saying.

According to Minister of Information Harmoko, President Soeharto assigned the trade minister to attend last week's cabinet meeting to ease regulations on cement exports.

Harmoko said nation-wide stocks of cement as of early this month stood at 503,684 tons. The cement output for this month is expected to reach 2.12 million tons and imports 160,000 tons. At the end of this month, there will most likely be some 309,000 tons of cement in stock. (rid)