Dian Kuswandini, The Jakarta Post, Jakarta | Thu, 05/15/2008 12:35 PM | Business
Publicly listed cement producer PT Indocement Tunggal Prakarsa will further limit its cement exports as higher domestic demand has boosted net profits, an official says.
Indocement president director Daniel Lavalle said Wednesday despite a 16.5 percent price increase in the beginning of the year, the company's sales in the first quarter grew 25.3 percent to 2.9 million tons compared to in the same period last year.
The first quarter growth, Lavalle said, exceeded the national growth average of 16.8 percent. In last year's first quarter, the company only saw a 7.9 percent growth to 10.7 million compared to 10 million in the first quarter of 2006.
The sales growth, Lavalle said, helped the company book a total net profit of Rp 377 billion, up 235 percent compared to the same period last year.
"The first three months surprisingly showed strong demands. We never expected high demand from the local market because it was quite slow last year due to heavy rains, which hampered constructions," Daniel said after a shareholder meeting in Jakarta on Wednesday.
The company, he said, initially expected consumers' purchasing power would decrease in light of the government's plan to increase fuel prices by up to 30 percent in June.
However, he said the plan actually prompted construction projects to stock cement before fuel price hikes triggered price increases in other commodities.
At the end of December, he said, the company had to raise sales prices 16.5 percent as industry fuel prices had already grown 60 percent, and coal 100 percent.
Lavelle said domestic demand mostly came from the private sector, rather than the government, indicating a continuing willingness to invest in construction projects despite the soaring fuel prices.
He said the growing domestic demand allowed Indocement to reduce its export volume 22.3 percent in the first quarter of this year to 600 tons compared to 800 tons in the same period last year.
"Now, we're focusing more on our local market. We believe the good trend... will continue, that's why we aim to increase our production capacity by around 21 to 22 million tons every year," he said.
Currently, Indocement produces around 17 million tons of cement every year.
To meet rising local demand, Daniel said Indocement would invest in three new cement mills, one of them in Cirebon, West Java, to increase annual production by 1.2 million tons. The investment would cost between US$48 and $60 million.
The company has yet to decide the locations for the other two mills.
"Increasing our production volume is the method we're undertaking to boost our net profits," Daniel said
Indocement booked Rp 7.3 trillion in net profits last year, 15.8 percent higher than in 2006.
Publicly listed cement producer PT Indocement Tunggal Prakarsa will further limit its cement exports as higher domestic demand has boosted net profits, an official says.
Indocement president director Daniel Lavalle said Wednesday despite a 16.5 percent price increase in the beginning of the year, the company's sales in the first quarter grew 25.3 percent to 2.9 million tons compared to in the same period last year.
The first quarter growth, Lavalle said, exceeded the national growth average of 16.8 percent. In last year's first quarter, the company only saw a 7.9 percent growth to 10.7 million compared to 10 million in the first quarter of 2006.
The sales growth, Lavalle said, helped the company book a total net profit of Rp 377 billion, up 235 percent compared to the same period last year.
"The first three months surprisingly showed strong demands. We never expected high demand from the local market because it was quite slow last year due to heavy rains, which hampered constructions," Daniel said after a shareholder meeting in Jakarta on Wednesday.
The company, he said, initially expected consumers' purchasing power would decrease in light of the government's plan to increase fuel prices by up to 30 percent in June.
However, he said the plan actually prompted construction projects to stock cement before fuel price hikes triggered price increases in other commodities.
At the end of December, he said, the company had to raise sales prices 16.5 percent as industry fuel prices had already grown 60 percent, and coal 100 percent.
Lavelle said domestic demand mostly came from the private sector, rather than the government, indicating a continuing willingness to invest in construction projects despite the soaring fuel prices.
He said the growing domestic demand allowed Indocement to reduce its export volume 22.3 percent in the first quarter of this year to 600 tons compared to 800 tons in the same period last year.
"Now, we're focusing more on our local market. We believe the good trend... will continue, that's why we aim to increase our production capacity by around 21 to 22 million tons every year," he said.
Currently, Indocement produces around 17 million tons of cement every year.
To meet rising local demand, Daniel said Indocement would invest in three new cement mills, one of them in Cirebon, West Java, to increase annual production by 1.2 million tons. The investment would cost between US$48 and $60 million.
The company has yet to decide the locations for the other two mills.
"Increasing our production volume is the method we're undertaking to boost our net profits," Daniel said
Indocement booked Rp 7.3 trillion in net profits last year, 15.8 percent higher than in 2006.