Prominent figures urged local investors to purchase Mexico-based Cemex Asia Holdings’ 25.53 per cent stake in the country’s largest cement producer, PT Semen Gresik (SG), to avoid foreign domination of the domestic cement industry. Capital markets expert Dandossi Matram said that the domestic supply of cement would be very vulnerable over the next two years due to limited production capacity.
Data from the Industry Ministry show that Indonesia has a total cement production capacity of 33Mta, while demand increased from 29.3Mt in 2004 to 32.2Mt in 2005. The demand is projected to increase further by an average of 10 per cent per annum to 52Mt in 2010.
"It is very important for the government and domestic investors to control this industry because the demand for cement will continue increasing in line with the country’s infrastructural development," Dandossi said.
Aries Muftie, an expert advisor to the state minister for state enterprises, said that the government was hoping local investors would bid for the shares. "We also hope that local administrations will submit bid, as happened in the cases of Freeport and the Cepu oil concession," he said. "It represents an open opportunity and everyone has the right to participate ... however, we can’t do much to determine who actually buys Cemex’s shares. It is up to the capital markets," he said.
Currently, several foreign and local investors are competing for the SG stake, including Lafarge, Australia’s Boral and Indonesia’s Sampoerna Group, PT Djarum, Wings Group and the Rajawali Group. Meanwhile, House of Representatives member Dradjad Wibowo, who is also an economist, said that the government needed to control strategic industries that involved the public interest.