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

L/R: Alwin Zecha, Founder - Pacific Leisure Group, Thailand; Hiran Cooray Chairman - Jetwing Symphony PLC, Sri Lanka; and Akbar Shareef, Chairman & Chief Executive - Rakaposhi Tours (Pvt) Ltd., Pakistan (Photo by Global Travel Media)

Jumat, 16 Oktober 2020 - 17:15 WIB

PATA Honours Industry Leaders, Pioneers and Professionals at 69th Annual General Meeting

The following awards were presented during the 69th Annual General Meeting held online PATA Gallery of Legends Award, PATA Life Membership, and PATA Chair’s Award.

Evan Dumas, Regional Director, Southeast Asia, Check Point Software Technologies (Photo by Linkedin)

Jumat, 16 Oktober 2020 - 17:00 WIB

3 Key Principles Businesses Must Keep In Mind When Securing the Remote Workforce

It is critical that organisations take steps to secure the remote workforce to prevent falling victim to the next cyber attack.

Tim Mackey, Principal Security Strategist, Synopsys Cybersecurity Research Centre (CyRC) (Photo by Synopsys)

Kamis, 15 Oktober 2020 - 19:05 WIB

Common Questions When Establishing an Organisational Culture of DevSecOps

Organisations are introducing security earlier in the software development life cycle (SDLC) by expanding close collaboration between development and operations teams in the DevOps movement…

Evan Dumas, Regional Director, Southeast Asia, Check Point Software Technologies (Photo by Linkedin)

Rabu, 14 Oktober 2020 - 21:45 WIB

Securing the Remote Workforce in the New Normal — 5 New Cyberthreat Trends to Look Out For

Check Point Research have observed 5 new trends in cyberthreats that were triggered by the outbreak of the coronavirus.

Hypertherm, a U.S. Based Manufacturer of Industrial Cutting Systems and Software

Rabu, 14 Oktober 2020 - 21:30 WIB

Hypertherm Releases New CSR Report with Updates On Community Outreach, Environmental Impact, and Associate Well-Being

Hypertherm, a U.S. based manufacturer of industrial cutting systems and software, announced the release of its 2019 Corporate Social Responsibility Report.