PT Indocement Tunggal Prakarsa expects its domestic cement sales to increase by up to four per cent this year from around 9.5Mt last year, a director with Indonesia’s second-largest cement company said. "We expect domestic cement sales to only grow by between 3-4 per cent this year given weak purchasing power," Indocement Finance Director Christian Kartawijaya told reporters. He said such domestic sales growth target is conservative, given high inflation and interest rates. "The target (for domestic cement sales) is in line with the national cement consumption forecast," he added.
Analysts expect many Indonesian companies to book lower sales in the first half of this year as high interest rates and inflation weigh on consumers’ purchasing power. To maintain overall sales growth, Kartawijaya said, Indocement also plans to increase its export volume to 3M this year from 2.5Mt in 2005.
Indocement also plans to refinance as much as $340 million of its foreign debt with syndicated bank loans in an effort to reduce cost of debt services, Kartawijaya said. "After refinancing, we expect our foreign debt will reduce and it would pave the way for a dividend payout," he said without elaborating.