Anjar Priandoyo

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Why Indonesia’s cement industry is complicated

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1.Economic perspective is complicated
-Low consumption per capita
In 2016, per capita cement consumption in Indonesia is aroud 243 kilogram per year which is lower behind regional peers such as Malaysia at 751 kilogram, Vietnam at 661 kilogram and Thailand at 443 kilogram.

-Low consumption on infrastructure sectors
It is estimated more than 40 million tons out of 62 million tons of cement consumption used for 65% property sector. According to EY is 80%. As comparison in India (63% residential, 20% infrastructure, 13% commercial, 4% industrial)

-Low consumption on bulk cement
Indonesia (23% bulk, 77% bag), Saudi (59% bulk, 41% bag).

Business perspective is even more complicated
-Finding the right price for cement is not easy

-Buying cement basically buying energy
40% of total cost is cost of electricity

-Cost of cement transportation is high
Cement is so costly to transport that it rarely travels more than 200 miles (320km) by road, so its markets tend to be local.
It makes sense to produce it in vast plants close both to limestone quarries, which provide a vital raw material, and to customers

2.Environmental perspective is even more complicated
Environmental perspective is clear. Cement industry is bad for environment. By all measurement, cement industry is bad for environment.
-Greenhouse gas (long term)
Cement industry is one of the biggest industry that producing CO2. For every ton cement produced it is estimated that 860kg of CO2

-Air pollution (short term)
If GHG is not enough, cement industry also producing PM10 and PM2.5 that dangerous for human health. Every ton cement produced 3kg or particulate matter.

-Water pollution
Cement production requires water for cooling heavy equipment and exhaust gases, in emission control systems such as wet scrubbers, as well as for preparing slurry in wet process kilns. The Cement Manufacturers’ Association of the Philippines (CeMAP) according to figures put out by CeMAP, an average dry-process cement plant uses 100-200L of water per tonne of clinker produced. The performance of specific consumption of water per ton of cement in 2011 (314 l/t)

The solution for this? sustainable business. The only things to prevent the environmental damage is with proper monitoring and control. People need to be involve. It should be any solution for this.

https://www.indonesia-investments.com/news/todays-headlines/cement-industry-indonesia-disappointing-demand-in-2016/item7519?
http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.518.2170&rep=rep1&type=pdf
http://www.academia.edu/7560024/Sector_wise_consumption_of_cement_Infrastructure_Housing
http://www.ey.com/Publication/vwLUAssets/EY-staying-competitive-in-an-oversupplied-market-overview-of-indonesias-cement-industry/$FILE/EY-staying-competitive-in-an-oversupplied-market-overview-of-indonesias-cement-industry.pdf
https://www.oxfordbusinessgroup.com/analysis/concrete-proposals-cement-sales-have-increased-rapidly-recent-years-2016-set-follow-trend
http://www.semenindonesia.com/assets/files/files/SMGRCorpPresentation_NDR_Jan2012.pdf
http://www.globalcement.com/magazine/articles/922-the-cement-industries-of-southeast-asia
http://ijecm.co.uk/wp-content/uploads/2017/01/517.pdf
http://www.globalcement.com/news/item/1772-analysis-gimmie-water-water-conservation-in-the-cement-industry
http://www.globalcement.com/news/item/1772-analysis-gimmie-water-water-conservation-in-the-cement-industry
http://www.lafarge.com/05182012-publication_sustainable_development-Sustainable_report_2011-water-uk.pdf
https://www.wbcsdcement.org/pdf/tf1/cement-industry-environment-report-2003.pdf
https://www3.epa.gov/ttnchie1/ap42/ch11/final/c11s06.pdf

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Written by Anjar Priandoyo

Mei 12, 2017 pada 10:25 am

Ditulis dalam Science

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