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Cement industry demands tighter moratorium on new factories
Industry association ASI has called for stricter enforcement of the moratorium on new factories as well as more targeted application of the policy to protect cement producers.
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Cranes operate on Nov. 13, 2024, at a construction site overlooking Thamrin Residences in Tanah Abang, Central Jakarta. (AFP/Bay Ismoyo)
C
ement producers have called on the government to strengthen its moratorium on the construction of new factories to stave off competition from market entrants.
In a statement released on Jan. 30, Indonesian Cement Association (ASI) chairman Lilik Unggul Raharjo said a broader application of the policy was needed to safeguard the industry’s profit margin.
“At present, a moratorium is in place for the construction of new cement factories […], but only for new investment recorded in the [Online Single Submission] system,” Lilik said on Sunday, as quoted by Kontan.co.id on Monday.
He also urged a “better and more directed [legal] structure” to protect the industry.
The combined capacity of domestic cement factories has been rising from 107 million tonnes in 2018 to 119.9 million tonnes in 2023, but demand for cement has dropped from 69.5 million tonnes in 2018 to 64.9 million tonnes last year, according to ASI data.
The utilization rate of cement factories plummeted during the COVID-19 pandemic, when many construction projects were put on hold. It rose slightly last year to 56.5 percent, but remains well below the pre-pandemic level of 65 percent.
Taufiek Bawazier, director general of chemicals, pharmaceuticals and textiles at the Industry Ministry, admitted the government was still open to investment in the cement industry, but only in regions that did not have cement factories.
