Indocement mulls price cuts, Indonesia

Indocement mulls price cuts, Indonesia
Published: 19 May 2006

Indonesia’s second largest cement maker, PT Indocement Tunggal Prakarsa, is considering the possibility of price cuts in order to regain market share, particularly in the key Jakarta and West Java markets – reports the Jakarta Post. Finance director Christian Widjaja said Thursday that the company was focussing on increasing its domestic market share to 30.4 percent this year from 28.8 per cent.

"We’re thinking of several strategies to achieve this goal, including possible price reductions," he told reporters during a tour of the company’s plants in Citeureup, West Java. The publicly listed cement producer wants to sell more cement in its core market areas, and hopes to achieve three per cent sales growth this year, Christian said.

From its 12 plants - nine in Citeureup and two in Cirebon, West Java, and one in Tarjun, South Kalimantan - the company can produce up to 15.4Mt of cement every year. Indocement still has a lot of available capacity to supply the domestic market with three kilns currently idle that have a production capacity of about 3Mta. The company also plans to expand its capacity by 600,000t in 2007, he said.

However, cement consumption dropped four per cent during the first quarter of this year, which, according to Christian, made it difficult to expect growth for the overall industry this year. He said that the combined sales of Indonesian cement makers would likely remain at the same level as last year. "It’s impossible to expect growth in the industry this year. Even to have flat sales, we will need to have growth in the coming months," he said.