Cement Sales in Indonesia Rise in February, Export in Focus
Cement sales in Indonesia rose 3 percent year-on-year (y/y) to 4.45 million tons in February 2016 from the same month one year earlier. Widodo Santoso, Chairman of the Indonesian Cement Association (ASI), said Indonesia's rising cement sales were caused by the ongoing development of infrastructure projects across the archipelago. Three regions showed a marked increase in cement sales last month: Sumatra (+16.5 percent y/y to 2.13 million tons), Sulawesi (+33 percent y/y to 841,000 tons) and the Moluccas & Papua (+31 percent y/y to 125,000 tons).
Besides government-led infrastructure projects (such as the one million houses program and infrastructure development in the villages), last month's cement demand in Indonesia was also supported by projects developed by the private sector. These projects include power stations and smelters (in line with the 2009 Mining Law).
However, compared to January 2016, Indonesia's cement sales fell 13 percent (m/m) last month. Santoso explained that this decline was caused by fewer working days in February, while the higher rainfall resulted in slower progress of infrastructure projects.
With the start of operations of four new cement plants (opened late last year and early this year), Indonesia's installed cement production capacity has risen to 92 million tons per year in 2016. As domestic cement demand is expected to reach 65 million tons only in 2016, Santoso says Indonesian cement producers need to focus on optimizing their export performance. Several interesting markets according to Santoso include Bangladesh, Africa, Australia, the Philippines and the Middle East.
The table below shows that Indonesian cement exports start to rise again. In February 2016 Indonesia exported 110,000 tons of cement, the highest volume since February 2011. The table also shows that Indonesia's February cement exports declined heavily between 2007 and 2012 as the result of higher domestic demand (particularly due to the property boom). However, as cement production capacity has expanded rapidly in recent years, there is again room to focus on export markets.
Indonesian Cement Exports in the Month February 2007-2016:
| Year | Cement Export (February) |
| 2016 | 110,000 |
| 2015 | 69,355 |
| 2014 | 11,200 |
| 2013 | 17,148 |
| 2012 | 9,991 |
| 2011 | 114,154 |
| 2010 | 167,098 |
| 2009 | 227,371 |
| 2008 | 299,637 |
| 2007 | 468,081 |
Source: Bisnis Indonesia
Indonesian Cement Sales 2008-2016:
| Year | Cement Sales |
YoY Growth |
| 2016¹ | 65 million | +6.6% |
| 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)