Indonesian cement sales jumped 37.4 percent (year-on-year) to 4.7 million tons in August 2014 due to higher cement demand from Indonesian property and infrastructure developers. Widodo Santoso, Chairman of the Indonesian Cement Association (ASI), said that the development of smelters, power plants, apartments, hotels, and social housing has been key to improved cement sales last month. However, the 37.4 percentage point growth was also caused by fewer working days in August 2013 as the Lebaran holiday fell in that month.
As such, cement sales rebounded in August after a 25 percentage point decline in the previous month as this year the Lebaran holiday fell in July (28 July to 1 August 2014), implying fewer working days (Lebaran, also known as Idul Fitri, marks the end of the Ramadan, the holy fasting month). During the week prior to Lebaran and four days after Lebaran, heavy trucks - such as those used for cement transport - are prohibited from driving on the main roads of Java (in an attempt to make room for the people's mudik tradition). Moreover, in July political uncertainties were still lingering in Indonesia due to uncertainty about the result of the 2014 presidential election. This resulted in delays of some projects.
Domestic cement demand increased most on the islands Java, Kalimantan and Sumatra, by 47 percent, 44 percent and 32.8 percent, respectively.
The ASI targets a five percent (year-on-year) growth of cement sales in 2014 to 61 million tons. Santoso expects that this target can be achieved if cement sales continue to grow in the last four months of the year. In the January-August 2014 period, cement sales in Indonesia have grown 2.45 percent to 37.5 million tons from the same period last year.
Indonesian Cement Sales 2008-2014:
|Year|| Cement Sales
|| YoY Growth
Source: Indonesian Cement Association (ASI)
Semen Indonesia, the largest cement producer of Indonesia, officially opened its new USD $5.76 million cement packing plant in Belang-Belang (West Sulawesi) on 9 September 2014. This plant has a (packing) production capacity of 450,000 tons of cement per year and is expected to strengthen the company’s distribution network. It will smoothen infrastructure development in eastern Indonesia, particularly on the island of Sulawesi. Currently, Semen Indonesia controls about 44 percent of the country’s cement market.