Domestic cement sales in Indonesia climbed 3.1 percent year-on-year (y/y) to 29.48 million tons in the first half of 2016. Widodo Santoso, General Chairman of the Indonesian Cement Association (ASI), said rising cement demand in Indonesia is particularly supported by the construction of power plants, smelters and other infrastructure projects outside the island of Java. However, he added that the cement sales growth figure in H1-2016 is slightly below the target of ASI.
According to the latest data from the ASI, cement sales in Sulawesi rose 25.7 percent (y/y) to 434,000 tons in June 2016, while cement sales in the eastern part of Indonesia (Moluccas and Papua) grew 9.1 percent (y/y) to 124,000 tons. Sumatra, traditionally the second-largest cement market in Indonesia, also saw a rise in cement consumption. In June 2016 cement sales rose 8.4 percent (y/y) to 1.04 million tons. Cement sales in Java (traditionally the largest cement consumer in Indonesia), Kalimantan and Bali all fell.
Widodo said Indonesia's cement export realization was very strong. In the first half of 2016, total cement export was recorded at 630,000 tons, up 83 percent (y/y) from exports in the same period one year earlier. Given Indonesia still has to cope with a cement oversupply (total installed annual cement production capacity is nearly touching 100 million tons, while domestic demand is estimated to reach 63 million tons this year), Widodo hopes that cement exports can grow further in the second half of the year.
Read more: Overview of Indonesia's Cement Industry
The ASI is also optimistic that cement demand in Indonesia will grow in the second half of 2016 as the government's infrastructure budget spending realization is expected to increase. In H1-2016 only up to 30 percent of the budget was spent.
Indonesian Cement Sales 2008-2016:
¹ ASI forecast
Source: Indonesian Cement Association (ASI)