JakartaPost-Apr 14, 2022
Russia’s invasion of Ukraine has affected Indonesian cement and fertilizer producers with many firms in the two industries, which are among the bellwethers of the construction and agriculture sectors, facing difficulty securing certain raw materials. State-owned cement producer PT Semen Indonesia Group (SIG) and state-owned fertilizer producer PT Pupuk Indonesia, the top companies in their respective industries, told lawmakers at a hearing on Tuesday that the industries were facing difficulty securing coal, kraft paper and a certain chemical used to make fertilizer due to the Ukraine war. SIG CEO Donny Arsal said surging international coal prices meant coal miners preferred to export the commodity instead of selling it at domestic market obligation (DMO) prices. Most DMO coal goes to the electricity industry. Fertilizer industries PT Pupuk Indonesia production director Bob Indiarto said the company was having trouble securing enough diammonium phosphate (DAP) and potassium chloride (KCI), which are necessary to produce subsidized nitrogen, phosphorus and potassium (NPK) fertilizer. The company sources most of its DAP from Russia, whereas most of its KCI was sourced from China, which has placed export restrictions on the chemical. The Indonesian government announced on April 5 that it would cut back on its subsidized fertilizer program to shield the state budget from rising commodity prices. The government would prioritize distributing subsidized fertilizers to producers of priority commodities, including rice, corn, soy beans, shallots, chilies, cocoa and sugarcane smallholders. Read more at: https://www.thejakartapost.com/paper/2022/04/13/ukraine-crisis-hits-indonesian-cement-fertilizer-industries.html.
