PT Indocement Tunggal Prakarsa (part of the HeidelbergCement Group) said it may boost its cement capacity by 600,000t this year following a US£20m optimisation of its plant. It also predicted production cost per ton to rise 20-25 per cent this year due to the full effect of fuel price hikes last year. Energy prices account for 50 per cent of the company’s production costs.
Indocement is Indonesia’s second-largest cement producer with an installed capacity of 16.5Mta. Last year, it sold 12.06Mt of cement, down three per cent from 2004, with local sales amounting 9.5Mt or nearly 30 per cent of nationwide consumption.
The company said domestic cement consumption may only grow by 3-4 per cent this year, with a pick-up in demand expected only later this year when macroeconomic conditions improve and the government spends more on infrastructure projects. It said it stands ready to increase its output in the next 2-3 years if domestic demand grows at a stronger pace, such as 10 per cent per annum. Given the fact that it is not yet operating at full capacity, it can raise its supply by 4Mt if necessary over the next four to five years, it said.