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
 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)