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Indocement translates vision of sustainable cement initiatives into reality
Indocement has strong commitment to sustainable development
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Cement is an essential material in today's society. As a major
constituent of concrete, cement forms a fundamental element of
any housing and infrastructure projects, such as roads, bridges,
airports, seaports, water treatment facilities, schools and
hospitals etc.
The revival of housing and infrastructure development projects
and property in Indonesia over the last several years has led to
the increase in demand for this important product and thus
benefited cement producers in the country. Amid the good prospect
for cement industry, however, cement producers are also facing
the fact that the rising global population places increasing
pressure on essential natural resources, such as land and energy.
This causes cement producers with long-term vision of sustainable
development to have to find ways of using these resources more
efficiently.
Major cement companies have developed a long-term vision of
sustainable development and are committed to implement
sustainable development in a proper manner. Amongst them is PT
Indocement Tunggal Prakarsa Tbk., since 2001 controlled by
HeidelbergCement of Germany.
Established in 1975, Indocement has been widely recognized as
a socially and environmentally responsible cement company in
Indonesia thanks to its strong commitment to the idea of
sustainable development.
As a member of the World Business Council for Sustainable
Development (WBCSD) and one of the signatories of the Cement
Sustainability Initiative, HeidelbergCement Group has led
Indocement to operate based on three pillars of sustainable
development: Economic growth, ecological balance and social
progress.
Many property projects were put to a halt due to economic
crisis in the mid-1977, painting a bleak picture for cement
producers, including Indocement. Many companies were involved in
huge debts due to the weakening of the rupiah against US dollar.
However, the bad story on cement producer is a thing of the past
for Indocement. The company refocused its activities on core
business of producing cement and took other efficiency measures,
which led the company to regain its financial strength.
"Since 2004, Indocement is financially sound. Our average
sales growth rate is nine percent per annum and we control around
30 percent market share," said Indocement's president director
Daniel Lavalle.
While efforts to boost its business performance continue,
Indocement has been engaged with numerous projects related to
social and environmental issues under community development (CD)
or social corporate responsibility (CSR) programs to demonstrate
its commitment to be a good corporate citizens.
Currently, Indocement operates 12 plants, nine of which are
located in Citereup, Bogor in West Java; two in Palimanan,
Cirebon, also in West Java, and one in Tajun, Kotabaru in South
Kalimantan.
For Indocement, living in harmony with the surrounding
community is an essential part to assure the sustainability of
its business. Therefore, as part of its efforts to reduce the
social impact of the company's operation and improve of the
welfare of local residents, the company provides job
opportunities for local residents. The company employs over 6,000
people, many of them are from villages where the plants are
located.
Daniel Lavalle said that employee welfare receives management
attention and is regularly updated and improved from time to
time. "The year 2004, for instance, witnessed the revision of
Indocement's Collective Labor Agreement, with a strong focus on
ethical issues," he said. "This communication e forum, which is
held every two years, serves as a means of discussing employee
welfare covering benefits and allowances", said Daniel Lavalle.
He said that Indocement tried to always place safety and
health issues as key priorities by providing safe and healthy
working environment. "Indocement has been able to minimize the
number of accidents by employing rigorous occupational health and
safety standard in line with international best practice," he
said.
Besides providing job opportunities, Indocement has also
undertaken a wide range of Community Development projects such as
building roads, bridges and water distribution system, school
buildings, mosques. Furthermore Indocement is providing mobile
health services and support education through training courses
for local residents in areas, such as farming, duck or sheep
breeding, production of handicrafts etc.
At Indocement, any Community Development projects is designed
based on the requirements from the localcommunities, said
Indocement's director Iwa Kartiwa. For instance, small-and-medium
size enterprises (SMEs) surrounding Indocement's plants in
Citereup were in dire need of capital for their venture and "so,
we collaborate with BRI in launching the loan-lending program.
Locals can take advantage of the loan with low interest rate," he
said.
The programs include scholarship programs provided for both
poor school children and those that have good achievement.
In 2004, the company allocated some Rp12 billion for the
Community Development (CD) programs covering several villages.
Meanwhile, as an environmentally responsible company,
Indocement find it essential to take concrete steps to protect
the environment as part of its commitment on sustainable
development, not only locally but also globally.
Local environment is sensitive to dust emissions that must be
contained using state-of-the-art technology.
With regard to emissions reduction, Indocement has decided to
change most of the electro filters of the kilns in order to
improve the performance and comply with national and
international environmental standards. Futhermore continous
emission monitoring equipment is being installed in each
individual kiln, Daniel Lavalle said.
CO2 emissions - resulting from the combustion of fossil fuels
in the cement kilns and the de-carbonization of calcium carbonate
inherent to the process - contribute to global CO2 emissions and
have become a global issue due to the likely influence on climate
change.
The Kyoto Protocol has introduced new flexible mechanisms to
help humanity curb the increase of CO2.
Indocement has introduced such an initiative - a Clean
Development Mechanism (CDM) project - and was the first
Indonesian company to do so. In this regard, Indocement uses
alternative fuels such as rice husk, palm kernel and sawdust to
replace fossil fuels, while using various alternative materials
in the production process.
The CDM projects are now being implemented in all company's
factories.
To implement the CDM project, Indocement signed an agreement
on CO2 emission reduction with the World Bank in Cologne, Germany
on June 9, 2004. Under the agreement, Indocement collaborate with
Prototype Carbon Fund (PCF), one of the World Bank's fund
institutions. This represents the first undertaking of its kind
in Indonesia, and one of the first in the cement industry
throughout the world.
The use of alternative materials result in reduced
requirements of clinker and hence a reduction in the consumption
of energy. The reduction of clinkers contributes directly to less
decarbonation. But using alternative materials also means that
Indocement will be encouraged to use diversified materials taken
from natural resources and thus, this will further contribute to
sustainable national development. The project uses clean
technology that won't have adverse impact on safety and health of
local community. In addition, with job of collecting, choosing
and transporting alternative fuels and materials needed, the
project also means new job opportunity.
Indocement's strong commitment to operate the company in a
responsible and sustainable manner through CD programs has led
the company to receive numerous awards. Among the most recent
awards that Indocement has receive are the OHSAS 18001
Certification for the implementation of Occupational Health &
Safety Assessment Series in September 2004, Superbrands Award
2003-2004 in October 2004 from UK-based Superbrands Organization
and Green Rating for implementing environmental safety measures
that exceed the minimum statutory requirements from the Ministry
of Environment in October 2004. On the 21st of July 2005,
Indocement also achieved the accreditation for laboratory testing
(SNI 19-17025-2000) from Komite Akreditasi National in Indonesia.
The numerous awards Indocement has earned are, surely, only
part of evidences of the company's strong commitment on
sustainable cement industry. Thus, Indocement translates long-
term vision of sustainable development into reality.