Soeharto defends big business in cement projects

JAKARTA (JP): President Soeharto denied yesterday that he was bias in licensing cement plants and other capital-intensive factories.

Speaking in Central Java's southern coastal town of Cilacap, Soeharto said the government was often criticized for only letting big business undertake cement projects.

He said the government had licensed big businesses to build cement plants because small firms could not afford to develop them.

"Yes, we take equality into account. But if they say they are capable but in reality are not, in the end the people will suffer," Soeharto said when inaugurating six industrial plants.

The six plants are state-owned PT Semen Gresik's second Tuban cement plant in East Java, the fifth unit of PT Semen Cibinong's cement plant in Cilacap, PT Indocement Tunggal Prakarsa's tenth unit in Cirebon, West Java, PT Citra Flourmills Persada's flour mill in Cilacap and two chemical plants in West Java.

Semen Cibinong is controlled by Hashim Djojohadikusumo, Indocement by Sudono Salim, also known as Liem Sioe Liong, and Citra Flourmills by Soeharto's daughter Siti Hardiyanti Rukmana.

Soeharto said the government had given 23 smaller firms the opportunity to build cement plants but all their projects had failed, creating a national cement crises.

Opportunity

He said the government would not sacrifice the public's interests anymore for the sake of giving equal opportunity to small and big business or for equal wealth distribution.

"When the new factories start production, we hope that we will no longer suffer cement shortages as happened a few years ago," Soeharto said.

"Fulfilling the people's needs is of utmost importance," he added.

The President said more cement should be exported because it was expected that the country would have an oversupply of more than two million tons this year.

With the newly opened cement plants, the Indonesian Cement Association predicts that overall cement supply will be 30.9 million tons this year, while domestic demand for cement will be 28.86 million tons.

On flour milling, Soeharto said the country needed more flour mills to meet rising demand.

"An adequate supply of wheat flour will hopefully encourage the growth of food industries in rural areas," he said.

Citra Flourmills' mill, costing Rp 100 billion (US$41.3 million), can make up to 1,000 tons of flour a day and will use between 220,000 and 260,000 tons of wheat grain a year.

There are only two other domestic flour milling companies: PT Bogasari Flour Mill, owned by Sudono Salim; and state-owned PT Berdikari Sari Flour Mill in Ujungpandang, South Sulawesi.

They get their wheat from the National Logistics Agency, which monopolizes the import and distribution of wheat and other commodities.

Critics have said that Bogasari has a monopoly on domestic wheat milling because it controls the management of Berdikari's flour mill. (rid)