Cement exports of Semen Indonesia, however, surged a whopping 212.1 percent to 1.87 million tons in 2017. This is a very strong growth pace but coming from a low base. It is important for Indonesian cement producers to boost their exports (in an effort to improve corporate earnings) because the nation's combined installed annual cement production capacity has now nearly reached 110 million tons, while actual domestic cement demand only stood at 66.4 million tons in 2017, thus there exists a major oversupply of cement. This results in fierce competition, hence puts pressure on cement prices.

The aforementioned figures also imply that Semen Indonesia accounted for 40.8 percent of total domestic cement sales in Indonesia in full-year 2017, hence remaining the biggest player in Indonesia's cement industry, followed by Indocement Tunggal Prakarsa.

Semen Indonesia (formerly known as Semen Gresik) sold 15.34 million tons in 2017. Its subsidiaries Semen Padang and Semen Tonasa sold 6.52 million tons and 5.22 million tons, respectively, last year.

However, the growth pace of Semen Indonesia's domestic cement sales (+5.5 percent) was below Indonesia's overall cement sales growth (+7.6 percent) in 2017. Agung Wiharto, Corporate Secretary of Semen Indonesia, said this is problematic because it means Semen Indonesia's market share declined. Rising sales volumes are therefore important to expand its market share in Southeast Asia's largest economy. In 2018 Semen Indonesia targets to sell 28.44 million tons on the domestic market.

Read also: Indonesia's Domestic Cement Sales Increased 7.6% in 2017

Meanwhile, annual installed production capacity of Semen Indonesia is expected to rise to 35 million tons in 2018 as construction at the Semen Indarung and Semen Rembang plants is scheduled to be completed soon. Both will be able to produce up to 3 million tons per year (each). However, in 2017 actual utilization of the company's total cement production capacity only reached 83 percent.

Shares of Semen Indonesia, listed on the Indonesia Stock Exchange, surged 3.50 percent to IDR 11,100 a piece on Thursday (25/01). So far this year, the company's shares climbed 12.12 percent.

Stock Quote Semen Indonesia - SMGR:

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