Demo, protests against mining companies not affect heavy industries

The chairman of the Heavy Industries Association, Gunawan Setiadi, said on Thursday that the increasing demonstrations, protests and strikes at mining companies had not significantly affect the operation of heavy industries.

On the contrary, Gunawan said, sales of heavy equipment had been on the rise because of rising demand. This is possibly an early indication of economic recovery.

Last year, Gunawan revealed 14 heavy equipment companies booked a new record sale of 4,000 units of heavy equipment such as shovels and bulldozers, compared to 2,000 units recorded in the previous year.

Nevertheless, he acknowledged that demands for heavy equipment had came from not only mining companies but also from logging companies.

However, local production of heavy equipment had been slow to respond to the increasing demands. This was because most of heavy equipment producers cut production level when the crisis hit.

Hitachi, for instance, produced about 800 units of heavy equipment per year before the crisis, and slashed it by half to 400 units when the crisis hit the country starting in the middle of 1997. Last year, Hitachi could only increase its output to 500 units.

During the crisis, Hitachi was also forced to cut down the selling prices of its heavy equipment by an average of 20 percent.

The chairman of the Steel and Machinery Industries Association, T. Sjamsu, said that metal industries were especially hit by the crisis because some 60 percent of components for their products were still imported.

Sjamsu said that plant utilization, nevertheless, had improved significantly from around 30 percent to 40 percent during the crisis to around 80 percent now. (*)