Update COVID-19 in Indonesia: 1,769,940 confirmed infections, 49,205 deaths (22 May 2021)
7 June 2021 (closed)
USD/IDR (14,146) -6.00 -0.04%
EUR/IDR (17,335) +57.05 +0.33%
Jakarta Composite Index (6,069.94) +4.77 +0.08%
Indonesia's cement sales in January 2014 declined 1 percent to 4.65 million metric tons from the same month in 2013 (4.68 million metric tons). The decline was caused by severe floods brought about by high rainfall amid a peak in Indonesia's rainy season. The floods resulted in disrupted distribution networks, therefore blocking cement shipments to retailers. Moreover, these weather conditions caused the postponement of several construction activities, thus reducing demand for cement.
Chairman of the Indonesia Cement Association (ASI), Widodo Santoso, stated that cement sales declined 1 percent in Sumatra (to one million tons) and 2 percent in Java (to 2.5 million tons). Together, Sumatra and Java - Indonesia's two most populous islands - account for about 75 percent of total Indonesian cement sales in January 2014. In other regions of Indonesia, cement sales also declined except for Kalimantan and Sulawesi. Sales in Kalimantan rose 7.2 percent to 374 thousand tons, while in Sulawesi sales surged 21.5 percent to 348 thousand tons.
In 2013, total Indonesian cement sales reached 58 million tons, a 5.6 percent increase from 2012. As cement sales and general economic growth are closely related, cement sales have slowed amid a slowing economy (the country's GDP growth pace slowed from 6.23 percent in 2012 to 5.78 percent in 2013). In 2014, forecasts for growth of cement sales suggest a slight improvement to a growth rate of 6 percent (to 61.5 million tons).
Production capacity in Indonesia's cement industry has expanded to 68.2 million tons in 2014 from 61 million tons last year as several companies have invested to increase production capacities. Semen Indonesia - the largest cement company in Indonesia - expanded production capacity by 2.5 million tons through its two subsidiaries Semen Gresik and Semen Padang. Semen Bosowa, a private company, added 1.5 million tons to its production capacity. By the end of 2017, Indonesia's cement production capacity is expected to reach beyond 100 million metric tons driven by investments of established cement producers and the influx of new companies eager to tap Indonesia's lucrative cement sector evidenced by cement sales which have grown over 10 percent per year in recent years (thus outpacing the nation's economic growth rate). With strong housing demand and large government infrastructure projects (within the MP3EI framework) ahead, there is still ample room for growth in the next two decades. These newcomers include China's China Triumph and Anhui Conch Cement, Thailand's Siam Cement, Taiwan's Jui Shin Indonesia and Semen Merah Putih of Singapore-listed palm oil producer Wilmar International. These foreign companies are also attracted by the abundant presence of limestone and clay in Indonesia (two of the basic ingredients for cement), thus being closer to raw materials and reducing operating costs. Meanwhile, domestic cement demand is forecast to increase to 85 million tons by the end of 2017. This growing demand has caused a significant decline of exports as companies prioritize supplies to the domestic market.
Indonesia's Cement Sales 2008-2013:
|Year|| Cement Sales
|| YoY Growth
Source: Indonesia Cement Association (ASI)