Indonesian Cement Association Proposes Moratorium on New Plant Construction Permit

By : Hariyanto And Aldi Firhand. A | Friday, August 25 2017 - 21:06 IWST

Illustration of cement industry. (Merdeka / Dwi Narwoko)
Illustration of cement industry. (Merdeka / Dwi Narwoko)

INDUSTRY.co.id - Jakarta - The Indonesian Cement Association (ASI) is responding to the higher supply surplus, reaching 106 million tons, exceeding domestic demand of only 63 million tons or only 60 percent. The installed capacity of existing manufacturers exceeded the demand for cement over the past two years.

ASI claimed to have proposed to the government to conduct a moratorium related to licensing the construction of new plants for cement companies this year. The goal, so that more optimal utilization.

"We have written to the government for a moratorium on new permits, but the factories that have already obtained permission will continue," said ASI Chairman Widodo Santoso in Jakarta, Thursday (8/24/2017).

According to him, this condition is the impact of many local entrepreneurs who scramble to expand in 2014. For information, at that time cement is still imported because of insufficient capacity. "Finally in 2015 many new cement plants are emerging to meet domestic demand," he continued.

The investment is excessive so that the growth of cement capacity is not directly proportional to the growth of consumption. Should, according to Widodo, investors need to take account of annual demand before developing capacity.

Domestic cement consumption in July 2017 amounted to 5.59 million tons, an increase of 54.5% on an annual basis or year on year (yoy). While in the previous month, cement consumption fell 26.8 percent to 3.73 million tons. For the period from January to July 2017, cement consumption was 34.6 million tons, up 4.4% on an annual basis.

Demand for cement, continued Widodo, rose on average by 5% or about 3 million tons. This creates a balance point between production capacity and new demand will be achieved within 10 years. In fact, in the year 2026 also according Widodo capacity will remain higher.

With this oversupply market condition, the price of cement has decreased every year from 8% to 10%. Prices have plummeted since the end of 2015.

News Comment

Today's Industry

Presiden Jokowi dalam rangkaian acara peringatan Hari Sumpah Pemuda. (Foto Biro Set Pres)

Senin, 18 Desember 2017 - 15:00 WIB

President Jokowi is scheduled to meet 1100 Millenials in Bandung

Jakarta - President Joko Widodo will greet about 1,100 young people or generations of "millenials" attending the Entrepreneurs Wanted event! (EW!) Held in Bandung, Monday (18/12/2017).

Tanah Gambut (Ali Fahmi / jurnalbumi)

Senin, 18 Desember 2017 - 14:00 WIB

PP Peak Losses Rp76.04 Trillion

Jakarta - The results of a study by the Institute for Economic and Social Research (LPEM) of the University of Indonesia estimated that the economic losses after five years of PP 71/2014 jo…

Surabaya City

Minggu, 17 Desember 2017 - 21:58 WIB

During 2017, Surabaya Visited by 24 Million Tourists

Department of Culture and Tourism of Surabaya City states the level of tourist visits to the City of Heroes during 2017 reached 24 million people.

BI Fintech (ist)

Minggu, 17 Desember 2017 - 20:54 WIB

Fintech Future Solutions for the Financial Industry

Fintech which is considered the future for the financial industry has been recognized by many parties, including the banking sector, who are competing to launch innovations in the field of fintech.…

Fintech

Minggu, 17 Desember 2017 - 20:40 WIB

Fintech Industries Become Alternative Financing Solutions for Business Capital

Only 19 percent of Indonesians use banks. There are still 81 percent who have not come into contact with the bank.