PT Indocement Tunggal Prakarsa, a publicly listed cement maker, is optimistic that the company will be able to fulfill domestic demand, that is forecasted to increase about five per cent, next year.
Indocement executive director, Christian Kartawijaya, said Thursday that in order to do that, the company would increase its production volume by 13.65Mt in 2007, from this year’s 13Mt.
"Some factors that will enhance the demand include the stable macro-economic condition, the decrease of the BI rate, as well as the reduction of the mortgage interest rate," he told The Jakarta Post at a ceremony of the signing of an agreement between the company and its labor union.
BI Rate at present stands at 9.75 percent and is expected to go down further next year – a move that will as well force banks to gradually cut its mortgage rates which should eventually push up demand for housing loans.
In addition to supplying the domestic market, the company also exports its products to several Asian and African countries, with Bangladesh and Brunei becoming its main markets.
"As a local player in cement manufacturing, we always give our priority to the domestic market rather than exporting our products," he said.
"After we have met the local demand, we then export the rest of the products."
Currently the company exports about 25 percent of its total output. In term of sales, Indocement controls about 30 per cent of domestic market share.
Indocement currently has three production plants: the Citeureup plant and the Palimanan plant in West Java, and the Tarjun plant in Kalimantan, with a total production capacity of 16.5Mta.
He added that the company plans to modify its Citeureup plant to be able to increase its production capacity by 600,000 tons, with the production cost of US$25 per ton.