Cement Industry Indonesia: 6 New Plants Open in 1H-2016
Six cement factories with a combined annual production capacity of 13.1 million tons will be ready to start operations in the second half of 2016. These six cement plants are owned by Semen Bosowa, Semen Tiga Roda, Conch Semen, Semen Indonesia (two plants) and Semen Manokwari. Widodo Santoso, Chairman of the Indonesian Cement Association (ASI), said the development of the new plants will create an even larger cement oversupply in Indonesia. Annual national cement production capacity now stands at around 100 million tons, while demand is estimated at 63 million tons in 2016.
Given the rising oversupply in Indonesia (both clinkers and cement), Santoso hopes that domestic demand will improve, while Indonesian cement producers should also focus more on export markets. He added that he would also like to see a stop to cement imports as domestic cement production capacity is more than sufficient to meet domestic demand, both in quantity and quality.
Read more: Overview of Indonesia's Cement Industry
Indonesia's cement demand rose 3.1 percent (y/y) to 29.48 million tons in the first half of 2016, supported by the construction of power plants, smelters and other infrastructure projects outside the island of Java, but slightly below the target that was set by ASI.
Six New Cement Plants in Indonesia that Open in 1H-2016:
| Company | Production Capacity (in million tons) |
| Semen Bosowa | 2.5 |
| Semen Tiga Roda | 4.4 |
| Semen Conch | 1.7 |
| Semen Indonesia¹ | 3.0 |
| Semen Manokwari | 1.5 |
¹ To open two cement plants
Source: Indonesian Cement Association (ASI)
Santoso is optimistic that cement demand in Indonesia will rise sharply in the second half of 2016 as the Indonesian government only spent up to 30 percent of its infrastructure budget. Furthermore, several private players are constructing power plants and smelters. Meanwhile, there is also still the government's One Million Houses program.
Indonesian Cement Sales in 1H-2016 per Island/Region:
| Island/Region | Cement Sales (in million tons) |
% of Total Domestic Sales |
YoY Growth |
| Java | 16.24 | 55.08% | +1.3% |
| Sumatra | 6.24 | 17.78% | +6.9% |
| Sulawesi | 2.54 | 8.62% | +24.8% |
| Kalimantan | 2.00 | 6.78% | -16.0% |
| Nusa Tenggara | 1.68 | 5.72% | +2.1% |
| Moluccas & Papua | 767,770 | 2.60% | +16.9% |
| Indonesia | 29.48 | 100% | +3.1% |
Source: Indonesian Cement Association (ASI)
Indonesian Cement Sales 2008-2016:
| Year | Cement Sales |
YoY Growth |
| 2016¹ | 63 million | +3.3% |
| 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)