Cement Industry Update Indonesia: Rising Sales in January 2018
Cement sales were good in January 2018 for Indonesian cement manufacturers, growth that is attributed to rising cement demand on the back of the government-led infrastructure development program, particularly the construction of toll roads. Indonesia's cement consumption rose 9.9 percent year-on-year (y/y) to 5.68 million tons in January 2018.
Widodo Santoso, Chairman of the Indonesian Cement Association (ASI), said cement consumption rose at similar levels across the Indonesian regions. Highest growth was reported on Sumatra, traditionally the second-biggest cement consuming island in Indonesia, where a 17.8 percent increase in cement sales (to 1.21 million tons) was detected in the first month of 2018.
Meanwhile, growth of cement sales was slowest on Java (the biggest cement consuming island in Indonesia) and the Bali & Nusa Tenggara region (see table below).
The construction of toll roads, dams and power stations were cited as reason for strong cement demand growth on Sumatra. Meanwhile, strengthening commodity prices boost people's purchasing power in the commodity-rich areas on Sumatra and Kalimantan, hence part of the local population starts to renovate their houses or build a new house. Santoso said this was particularly visible in East Kalimantan and South Kalimantan where cement demand grew rapidly in accordance with the higher coal price.
Semen Baturaja, a cement manufacturer that is focused on the Sumatran market, saw its cement sales rise 25 percent (y/y) to 161,000 tons in January 2018. In full-year 2018 the company targets to sell 2.75 million tons.
Indocement Tunggal Prakarsa posted a 10 percent (y/y) increase to 1.5 million tons in the first month of 2018. This cement producer targets to see the full-year cement sales rise in line with the expected growth pace of total cement sales in Indonesia this year, namely 6-7 percent (y/y).
Cement sales of Semen Indonesia, the country's biggest cement producer, rose around 7 percent (y/y) to 2.34 million tons in January 2018.
Cement Sales Indonesia - January 2018:
| Region | Sales Volume |
Y/Y growth |
| Java | 3,180,000 | +8.1% |
| Sumatra | 1,210,000 | +17.8% |
| Sulawesi | 478,000 | +11.4% |
| Kalimantan | 355,000 | +12.9% |
| Bali & Nusa Tenggara | 288,000 | +7.5% |
| Moluccas & Papua | 167,000 | +17.0% |
| Total | 5,680,000 | +9.9% |
Source: Indonesian Cement Association (ASI)
Stock Performance Comparison Semen Indonesia, Indocement, Semen Baturaja:*
SMGR = Semen Indonesia
INTP = Indocement Tunggal Prakarsa
SMBR = Semen Baturaja
* normalized stocks, 1 January 2018 = 100