Given the rising oversupply in Indonesia (both clinkers and cement), Santoso hopes that domestic demand will improve, while Indonesian cement producers should also focus more on export markets. He added that he would also like to see a stop to cement imports as domestic cement production capacity is more than sufficient to meet domestic demand, both in quantity and quality.

Read more: Overview of Indonesia's Cement Industry

Indonesia's cement demand rose 3.1 percent (y/y) to 29.48 million tons in the first half of 2016, supported by the construction of power plants, smelters and other infrastructure projects outside the island of Java, but slightly below the target that was set by ASI.

Six New Cement Plants in Indonesia that Open in 1H-2016:

Company Production Capacity
     (in million tons)
Semen Bosowa                2.5
Semen Tiga Roda                4.4
Semen Conch                1.7
Semen Indonesia¹                3.0
Semen Manokwari                1.5

¹ To open two cement plants
Source: Indonesian Cement Association (ASI)

Santoso is optimistic that cement demand in Indonesia will rise sharply in the second half of 2016 as the Indonesian government only spent up to 30 percent of its infrastructure budget. Furthermore, several private players are constructing power plants and smelters. Meanwhile, there is also still the government's One Million Houses program.

Indonesian Cement Sales in 1H-2016 per Island/Region:

Island/Region Cement Sales
(in million tons)
    % of Total
Domestic Sales
Java        16.24        55.08%  +1.3%
Sumatra         6.24        17.78%  +6.9%
Sulawesi         2.54         8.62% +24.8%
Kalimantan         2.00         6.78% -16.0%
Nusa Tenggara         1.68         5.72%  +2.1%
Moluccas & Papua      767,770         2.60% +16.9%
Indonesia        29.48         100%  +3.1%

Source: Indonesian Cement Association (ASI)

Indonesian Cement Sales 2008-2016:

Year Cement Sales
2016¹     63 million  +3.3%
2015     61 million  +1.8%
2014     60 million  +3.3%
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 ASI forecast
Source: Indonesian Cement Association (ASI)