Corporate Governance

One of the more significant governance related matters to be resolved in 2010 was the conclusion of investigations into the alleged presence of a cement cartel and price fixing in Indonesia. The investigation, which involved Indocement and seven other cement producers was carried out by the Government of Indonesia’s KPPU – the Supervisory of Business Competition Committee. The KPPU alleged that the companies under investigation colluded to maintain prices at pre-crisis levels in spite of declines in the price of material inputs in the wake of the global financial crisis.
Indocement, like the other reported parties denied the allegations stating that its marketing decisions were made entirely independent of all other parties and were consistent with the Company’s goals. The hypotheses that long-term energy cost were declining proved to be unsubstantiated.

Rental Mobil Makassar - On 18 August 2010, the KPPU announced its decision, and stated that it had found no evidence sufficient to prove the existence of a cement cartel or any collective action on the part of cement companies to fix prices. Additionally, the KPPU recommended that the Government of Indonesia disband the Indonesian Cement Association and determine a highest retail price of cement to protect consumers. Indocement accepts and respects the decision made by the KPPU.