• CPO: India increases CPO import tax again
The Indonesian Palm Oil Entrepreneurs Association (Gapki) has urged the Indonesian
government to engage with Indian authorities regarding plans to increase taxes on imports
of crude palm oil (CPO) products. India is Indonesia’s second-largest export destination. In
2023, India imported 5.4 million tons of CPO from Indonesia, generating a total export
revenue of USD 4.52B. At this time, Gapki is unable to estimate the impact of India’s proposed
increase in CPO import taxes because the duration of the policy is unknown. However, if the
regulation is in place for an extended period, it could negatively affect not only domestic CPO
production but also Indian consumers. Previously, on September 14, 2024, the Indian
government raised the import tax on CPO, crude soybean oil, and sunflower seed oil from
5.5% to 27.5%. This change has already had consequences for exports, causing shipments to
India to drop from 730,000 tons to 310,000 tons in November 2024.
• Mining: Moratorium needs to be implemented immediately
The potential closure of one of the largest nickel smelters in Indonesia belonging to
Gunbuster Nickel Industry (GNI) in North Morowali, Central Sulawesi according to the Center
of Economic and Law Studies (CELIOS) is a sign that Indonesia should immediately
implement a moratorium on nickel smelters. GNI had cut production to the point of
potentially closing completely, several months after its parent company in China, Jiangsu
Delong Nickel Industry, went bankrupt. According to CELIOS, this is a sign of a mismatch
between smelter permits, which have been granted too easily in recent years, and the
readiness of governance on the mineral supply side. Critical mineral-producing countries
including nickel, such as Indonesia, must implement a smelter moratorium to control supply
and prices on the international market. According to CELIOS, nickel prices are too low, while
middle industries are not built (hollow in the middle), and environmental impacts are already
at high risk, causing producing countries to lose bargaining power in front of buyers of both
the stainless steel and electric vehicle industries. Efforts regarding a moratorium on nickel
smelters, especially those based on Rotary Kiln Electric Furnace (RKEF) technology, have also
previously been expressed by Mining Industry Indonesia (MIND ID) on the grounds of
preventing an oversupply of RKEF smelters derivative products such as ferronickel and
Nickel pig iron (NPI). It is to prevent an oversupply like what has happened with ferronickel,
whose price fell and now can barely cover production costs. (Kontan)
• INTP will strengthen production efficiency this year
Indocement Tunggal Prakarsa (INTP) will strengthen production efficiency amidst the
sluggishness of the national cement industry in 2025. This is reflected in domestic cement
production volume, which only reached 4.9M tons on Jan 25 (-5% yoy, -13% mom). INTP itself
recorded a decline in cement sales volume of 1.1% yoy. Based on product segmentation,
INTP’s bagged cement sales volume fell 0.1% yoy, while bulk cement declined by 3.7% yoy.
However, the company’s market share has risen to 31% from 29.8% on Jan 24. President
Director of INTP, Christian Kartawijaya, stated that 2025 will be quite a challenging year for
cement manufacturers in Indonesia. This is because the national cement industry is still
experiencing oversupply, coupled with the government’s infrastructure budget efficiency
measures. The efficiency of the infrastructure budget is reflected in the indicative ceiling for
the Ministry of Public Works (PU) in 2025 which is set at IDR 50.48T compared to the initial
ceiling of IDR 110.95T. However, INTP remains optimistic because several infrastructure
projects are continuing, such as the LRT, MRT, and Harbor Toll Road, as well as the three million construction program, school improvements, and property VAT discounts that are
still available. They also hope that the impact of lowering interest rates can move the
property sector and increase people’s purchasing power. In 2025, INTP projects domestic
cement consumption growth to be in the range of 1–3%. The company also hopes to grow in
line with these estimates, even though the challenges in the Indonesian cement industry are
still quite large. To face challenges in the national cement industry this year, INTP will
continue to implement an efficiency strategy by operating cost-effective factories, both in
terms of production and logistics. (Bisnis Indonesia)
