The Business Competition Supervisory Body (KPPU) has kicked off an investigation into an alleged price fixing ring involving eight major cement producers across the country.
Spokesman for the anti-monopoly body Ahmad Junaidi said last week the investigation was based on the commission’s monitoring of cement prices between late 2008 and the end of 2009.
“Our early findings discovered irregularities in cement supplies.”
KPPU alleged that the eight companies had deliberately made an “agreement” to control production volume in order to increase prices.
He claimed that cement producers had not operated at their full capacity while cement supplies in the market failed to meet growing demand. “As a result, cement prices jumped despite the decrease in the price of coal, a major component in cement production.”
For example, Junaidi explained, cement prices were increased by 12 percent by the eight companies together during the first semester of 2009. But, coal prices dropped by 22.33 percent on average.
According to KPPU data, the eight cement producers produced only 35.4 million tons of cement during 2008 or 62.26 percent of the total capacity of 56.86 million tons during the year.
“Cement demand during the year reached 38.81 million tons, meaning that 2.68 million tons of cement [demand] was left uncovered by domestic producers despite idle production capacity of 21.46 million tons,” Junaidi explained.
The Indonesian Cement Association (ASI) presented different data.
ASI chairman Urip Timuryono claimed in an official statement that cement production capacity in 2008 reached 44.8 million tons.
Urip also denied that cement producers had made an agreement to limit production volume.
KPPU refused to name the eight companies under investigation.
At present Indonesia’s top eight cement makers are PT Semen Gresik, PT Semen Padang, PT Semen Tonasa, PT Semen Bosowa, PT Semen Andalas Indonesia, PT Indocement Tunggal Prakarsa, PT Holcim Indonesia and PT Semen Baturaja.
— JP/bbs
