Impending energy price and electricity tariff hikes are likely to hinder the Indonesian cement industry`s growth this year, PT Semen Gresik President Director Dwi Sucipto said.
"The global economic recovery will prompt oil and coal prices to increase and this will burden the cement industry this year," he said at the weekend.
Energy cost accounted for 40 per cent of Semen Gresik`s production cost so that the rising energy prices would no doubt influence its performance, he said.
Semen Gresik had yet to set its growth for this year, he said. "We will only try to maintain the trend of positive growth."
Sucipto said Semen Gresik`s growth last year was the result of its efficiency program.
"Demand for cement was stagnant last year because of the global economic crisis," he said.
Last year the state-owned cement maker posted an unaudited net profit of Rp2.408 trillion (US$257.6 million), up 34.4 per cent from the year before. Until the third quarter of 2009 sales reached 12.97 billion tons, down 1.5 per cent from the previous year.
Director General of Electricity and Energy Utilisation at the Energy and Mineral Resources Ministry J Purwono said last Thursday the government would go ahead with its plan to raise electricity tariffs this year as part of its efforts to reduce its subsidy burden.
Electricity tariffs for medium-and large-scale subscribers were likely to be raised by an average of 15 per cent. However, the increase in electricity tariffs for small-scale subscribers had yet to be set, he said.
The government had originally planned to increase the electricity tariffs in January. But President Susilo Bambang Yudhoyono then decided to put the plan on hold, he said.