Chairman of the Indonesia Cement Association (Asosiasi Semen Indonesia, or ASI) Widodo Santoso said on Tuesday (09/12) that domestic cement sales rose by 3.4 percent year-on-year (y/y) in the January-November 2014 period to 54.6 million tons. The annual growth pace of cement sales in full year 2013 was 5.6 percent. Cement sales are a key indicator for construction activity (infrastructure and property development absorb most cement) and closely linked to a country’s general gross domestic product (GDP) growth. Therefore, Indonesia’s current economic slowdown appears in tandem with slowing cement consumption. In the third quarter of 2014, Indonesia's GDP growth was recorded at 5.01 percent (y/y), the slowest pace in five years.

Forecasts for Indonesian cement sales in 2015 are more positive as the new Joko Widodo-led government is expected to enhance infrastructure development, such as the Trans Sumatra, Medan-Kuala Namu, and Manado-Bitung toll roads, as well as a series of new (or renovated) seaports across the archipelago. The Indonesia Builders Association (Gapensi) recently stated that Indonesia’s construction business (which includes the construction of roads, offices and houses) is estimated to grow by approximately 16 percent (y/y) in 2015. Andi Rukmana, Secretary General of Gapensi, requests the government to pay close attention to land-clearing as this matter is a well-known obstacle for infrastructure development in Southeast Asia’s largest economy.

Indonesian Cement Sales 2008-2013:

 Year    Cement Sales
   YoY Growth
 2013        58 million         +5.6%
 2012        55 million        +14.6%
 2011        48 million        +20.0%
 2010        40 million         +4.2%
 2009       38.4 million         +1.1%
 2008        38 million             -

¹ forecast
Source: Indonesia Cement Association (ASI)