Cement Consumption in Indonesia Continues to Rise in May 2017
In May 2017 Indonesia's national cement consumption extended the rise that started in the preceding month supported by a recovery in the property sector and infrastructure development projects. Based on data from the Indonesian Cement Association (ASI), cement demand grew 7 percent year-on-year (y/y) to 5.47 million tons in May. Meanwhile, cement sales rose 4.1 percent (y/y) to 25.26 million tons in the January-May 2017 period.
Widodo Santoso, Chairman of the ASI, said cement exports from Indonesia performed well too. In May cement exports rose more than 60 percent (y/y) to 225,000 tons. In the first five months of the year Indonesia's cement exports reached 1.14 million tons. Therefore, Santoso is optimistic that Indonesia can achieve the target of 2.5 million tons of cement.
Read more: Overview of the Cement Industry in Indonesia
Regarding domestic cement sales, strong demand growth originated from the island of Java where cement sales rose 12.4 percent (y/y) supported by infrastructure and property projects. Examples are toll roads, power stations, dams, and housing projects.
Also in Sumatra, the second-largest source of cement demand in Indonesia (after Java), cement sales grew strongly (around 15 percent) due to various projects that were launched ahead of the Ramadan and Idul Fitri festivities. Meanwhile, in the eastern part of Indonesia cement demand fell as in several parts no new infrastructure projects were launched.
Indonesian Cement Sales 2008-2016:
Source: Indonesian Cement Association (ASI)
Meanwhile, installed cement production capacity of Semen Indonesia is set to rise up to 42 million tons per year by 2021 due to the construction of two new cement plants, one in Pidi (Aceh) and one in Kupang. Currently, the Semen Indonesia Group can produce up to 34 million tons of cement in one year. The group controls 41.7 percent of the domestic market, hence being the clear market leader.