PT Semen Gresik (SG), has projected a shortfall in cement supply in 2007 due to the high demand from government-driven infrastructure projects.
To anticipate the shortage, SG is planning to construct new plants, either in Sukabumi, West Java, or near Pacitan, East Java, with an installed capacity of between 2.5Mt and 3Mta.
"We are forecasting that there will be a shortage of cement within the next two years amid rising demand from infrastructure projects," SG President Director Satrio said during a press gathering.
The state-owned company’s forecast of a cement shortage in 2007 is earlier than it’s previous prediction of 2010. The firm did not include in its original forecast the expected increased demand for cement arising out of the major infrastructure projects offered by the government to local and overseas investors at January’s Infrastructure Summit.
The government has estimated that investment in infrastructure -- including roads, ports and seaports – will surpass US$150bn in the next five years, with the bulk of the money coming from the private sector.
Satrio said that cement producers would be able to keep up with the demand for the immediate future as most of the projects were unlikely to start this year or next due to regulatory constraints.
"Several infrastructure projects, although the number is not so significant, will start this year and next year. The cement industry will feel the pressure from the projects in the following years," he said.