Cement Demand Predicted To Increase

Citeureup, Bogor, 21/3 (Antara) - Cement producer PT Indocement Tunggal Prakarsa Tbk predicted that cement demand in the country would grow faster this year. There are more infrastructure and real estate projects to be built this year, corporate secretary of the publicly traded company Sahat Panggabean said here on Friday. In order to keep pace with the growing market demand, the company would expand its production capacity by building a brownfield and two "greenfield factories", Sahat said. As part of the plan, on March 25, 2013, the company signed an agreement with Tianjin Cement Industry Design & Research Institute Co. Ltd of China on the preparation of equipment and engineering for the new projects in Citeureup . The groundbreaking ceremony to mark the start of the construction of the project with a capacity of 4.4 million tons was already held on 9 October, 2013, he said. Construction of the new factories will cost around Rp5.5 trillion -Rp6.5 trillion, he said. The company is in the process of seeking licenses for the two greenfield factories with a production capacity of 2.5 million tons each, one to be built in Central Java and the other one outside Java. Indocement Presaident Director Daniel Lavalle said the year 2013 Indonesia and the world faced a heavy economic challenges. The trend, however, has been encouraging for cement industry, Lavalle said The country`s Gross Domestic Product (GDP) grew 5.8 percent pushing up development of cement industry to a more competitive ground, he added. In 2013, the company was confronted with a sharper competition with more new players entering the market and old players expanding their capacity, he noted. A number of new players entered the market with cement imported from neighboring countries, he said giving no names. An addition challenge came in the form of rupiah depreciation that put pressure on production cost, he said. The company, therefore, has maintained its strategic policy of improving cost efficiency and setting a tighter profit margin. "The policy succeeded in increasing and expanding sales in 2013," he said. Sahat Panggabean said by Dec. 31, 2013, the company recorded Rp12,595.2 billion in net cash and cash equivalent on strong cash flow and efficient management of working capital. In 2013, capital spending of the company was set at Rp2,199.8 billion mostly for the construction of new "vertical raw mill" with a capacity of 1.9 million tons and the "brownfield project", both in Citeureup. There was also investment in "batching plant" and new mixer trucks to support strategic expansion, Sahat said.