Six new cement projects to be ready by end of 1997
Six new cement projects to be ready by end of 1997
JAKARTA (JP): Indonesia's annual cement production capacity of
20 million tons will increase by 12 million tons by the end of
1997 with the completion of six new projects.
Director General of Chemical Industries Sujata told a hearing
with Commission VI of the House of Representatives (DPR) here
yesterday that the new projects are expected to meet the growing
demand for cement, which is projected to increase by 12 percent
per annum.
"It might not entirely satisfy the growing demand in the
future as the ideal cement production increase should be over 15
or 20 percent annually," Sujata said.
He noted that three of the six projects are established by
state-owned companies. They are the fourth unit of PT Semen
Tonasa in South Sulawesi, the second and third units of PT Semen
Gresik in East Java.
The other three projects are to be carried out by private
companies, including the optimization project of PT Indocement
Tunggal Prakasa, the expansion of PT Semen Nusantara and the
construction of a new factory by PT Indo Kodeco.
The production capacity of each project is 2.3 million tons
per annum, except Indocement's expansion, which will have a
capacity of 500,000 tons.
Sujata noted that of the six projects, two -- constructed by
Semen Gresik and Indocement -- will start operating this year.
"Next week President Soeharto is scheduled to inaugurate the
second unit of Semen Gresik," Sujata told the commission, which
deals with the manufacturing, mining and energy industries.
Licenses
Minister of Industry Tunky Ariwibowo said in a separate
hearing with the commission on Monday that the government is
expecting more cement projects to be built by private sectors.
The government, in this case the Investment Coordinating Board
(BKPM), has issued licenses for 23 new cement projects. However,
most of the approved projects have not been accomplished.
Tunky acknowledged that financial constraints and the
government-set local price references are the main barriers
facing investors when building new cement factories.
The price references have been violated by almost all cement
producers by selling their products far above the government-set
prices.
PT Semen Padang and PT Semen Tonasa, two state companies, have
unilaterally increased the sales prices of their cement to Rp
6,600 (US$3) per 40-kilogram sack, well above the local price
reference of Rp 5,930. Their executives said the price references
are too low as they cannot compensate with their production
costs.
Meanwhile, cement prices in Jakarta yesterday soared to Rp
11,000 per sack from a range of Rp 7,000 and Rp 8,000 four days
ago.
Rizal Ramli, chairman of the Advisory Group in Economics,
Industry and Trade (Econit) has stated that the price increase in
cement is not caused by high production costs or the imbalance
between supply and demand but by oligopolistic practices by
certain cement producers.
Legislator Sunaryo Hardade yesterday urged the government to
control cement prices from increases.
He proposed that Commission VI conduct a coordinating meeting
with related commissions in the House to discuss the uncontrolled
increases of cement prices.
Commenting on Sunaryo's suggestion, Sujata noted that the
government has asked cement producers to import 124,000 tons of
cement and 600,000 tons of clinker -- a substance used in the
production of cement -- by the end of this year.
The producers empowered to import cement are Semen Tonasa and
Indocement, while those assigned to import clinker are Semen
Gresik, PT Semen Nusantara and PT Semen Kupang. (rid)