JSX Reprimands Semen Cibinong over closure plan

JSX Reprimands Semen Cibinong over closure plan
Published: 30 September 2005

President Director of the Jakarta Stock Exchange, Erry Firmansyah temporary suspended the trading of Semen Cibinong’s share on the (26/9) in order to force the management to disclose the information on the plant closure plan to all investors. Erry were disappointed that the management first disclosed the information to the media instead of to the JSX. The capital market regulation stated that all issuers should report its corporate actions to the bourse before disclosing the information to the public. "Or at least disclose the information at the same time," he said.

Semen Cibinong’s management said in a letter to JSX that the company has temporarily halted the operation of its first plant in Cilacap (CC-1) for seven months from 1 October 2005 to 1 April 2006 of the four active plants owned by the company. During the period, the domestic and export cement supplies will be met by its second plant in Cilacap (CC-2) with production capacity of 2.6Mta.

"The temporary suspension of a plant’s operation within a production unit of a cement company is a common business practice," said Tim Mackay, President Director of Semen Cibinong in the letter.

Semen Cibinong was forced to halt the CC-1 operation for several reasons, including the lower cement demand by the country’s construction industry as well as the industrial diesel oil price increase (IDO). The IDO price increase would lead to the significant increase of the operational costs of fuel fired generators of the company.  Therefore, the company would switch the plant’s power source from fuel-fired generators to electricity interconnection to state electricity firm PT Perusahaan Listrik Negara (PLN).