Wednesday, 21 Augst 2019 | 12:01 WIB

Indonesian Gov‘t Optimistic on Better Performance of the Cement Industry

Indonesian Gov't Optimistic on Better Performance of the Cement Industry (eljohnnews)

JAKARTA, NETRALNEWS.COM -- The performance of the cement industry is projected to be more attractive in 2019, as the Indonesian government continues to create conducive business climate in the country.

"After the general elections, the activities of the manufacturing industry are expected to return to normal," said Director of the Cement, Ceramics and Nonmetal Processing Industry of the Directorate General of Chemical, Pharmaceutical and Textile Industry (IKFT) at the Ministry of Industry Adie Rochmanto P. in Jakarta, Tuesday ( 6/11/2019).

Adie is optimistic that the growth of the IKFT sector, which covers the cement industry, will reach 4.3 percent so far this year. The target surged from the achievement in the first quarter of 2019 of 3.6%. "In the long term, the cement industry will continue to grow significantly. This is in line with the incessant infrastructure projects and property development, "he said.

In fact, this year's cement industry utilization will be better than last year or above 75%. This utilization takes into account the growing domestic and export markets. "We hope that our economic recovery after this election will at least provide leverage for our current capacity utilization," he added.

To boost cement sales this year, one alternative for industry is exports. The Indonesia Ministry of Industry targets cement and clinker exports to reach 7 million tons in 2019, up 24% compared to 5.64 million tons in 2018.

Previously, the Minister of Industry Airlangga Hartarto stressed that his party also continued to increase cement consumption in the domestic market through several ongoing project opportunities, especially those announced by the government. For example, development programs in the infrastructure, property and manufacturing sectors.

Another step, the Ministry of Industry directs the domestic grinding plant using clinker raw materials, which are expected to absorb from local production. This effort is to reduce imports of similar products.

Airlangga explained, these policies are a form of the government's commitment to maintain a conducive business climate so that the national cement industry can grow and develop. "We also encourage diversification of cement products as well as mandatory application of Indonesian National Standards (SNI) for cement," he added.

Currently the domestic cement market is oversupply. The production capacity of the cement industry is integrated in the country reaching 109.9 million tons per year, while consumption in 2018 is around 69.6 million tons.

"The domestic cement industry is in an over capacity condition. In the past, cement demand growth was indeed high, so investors were competing to make factories and investments, but in the course of growth it was not as big as expected so that over capacity was happening now," explained Minister of Industry

Besides that, which is also important, the Ministry of Industry requests that the domestic cement industry players continue to build an innovation ecosystem to enhance competitive advantage amid increasingly fierce competition both at regional and international levels. Such innovation can be an advantage for the company because it is more efficient, especially in overcoming the excess national cement production capacity.

"The cement industry is expected to be able to carry out a transformation in accordance with the latest technological developments in the industrial revolution era 4.0 which can be applied in stages," said Minister of Industry.

This is to look for efficiency measures and optimize the production process in order to achieve maximum results.

According to Airlangga, the development of strategic industries such as cement factories needs to be maintained because they bring multiple effects to the regional and national economies, including the absorption of labor and small-scale cement-based industrial growth that can be developed.

"The cement industry is an industry that can encourage the growth of local industries, especially for the cement goods industry," he said.