Indocement plans to close three inefficient lines, Indonesia

Indocement Tunggal Prakarsaplans, part of the HeidelbergCement Group, plans to discontinue production activities of lines P1, P2, and P6 at its flagship Citeureup works, Indonesia.

"We seek to stabilise margins this year by shutting down factories that are not efficient, including factories P1, P2, and P6 in Citeureup with a total production capacity of 1.2-1.5Mta," Indonesia Finance Today quoted Christian Kartawijaya, President Director of Indocement as saying.

Mr Kartawijaya said operations in lines P1, P2, and P6 were no longer efficient, as the factories are old factories that were usually only used as backup when another factory was on maintenance. The lost production from the shutting down of the three factories will soon be replaced by production from factory P14 with a capacity of 4.4Mta which is targeted to be completed by the end of this year.

Indocement’s revenues for the first six months of 2015 dropped 6.6 per cent to IDR8.87trn from last year's IDR9.49trn due to the decline of sales volume in the domestic market by 8.8 per cent to 8.2Mt. Its market share also fell to 29.1 per cent from 30.5 per cent due to weak domestic consumption, tight competition, and oversupply in the national market.