Indonesia: KPPU scrutinizes suspected cement cartel

Indonesia: KPPU scrutinizes suspected cement cartel
Published: 21 January 2010

The Business Competition Supervisory Body (KPPU) of Indonesia has started an investigation into an alleged cartel involving eight major cement producers across the country.

Spokesman for the anti-monopoly body Ahmad Junaidi said Wednesday the investigation was based on the commission’s monitoring of cement prices during 2009.

"Our early findings discovered irregularities in cement supplies," Junaidi told The Jakarta Post.

He cited cement producers had not operated at their full capacities while cement supplies in the market failed to meet to growing demands.

"As a result, cement prices jumped up to 100 per cent," he added.

According to KPPU data, the eight cement producers produced only 35.4Mt of cement or 62.26 per cent of the total capacity of 56.86Mt in 2008.

"Cement demands during the year reached 38.81Mt, meaning that 2.68Mt of cement was left uncovered by domestic producers," Junaidi explained.

The preliminary investigation will be completed on February 24.