Cement Sales in Indonesia Rise on Infrastructure and Property Projects
Cement sales in Indonesia surged 21 percent month-to-month (m/m) to 5.6 million ton in September 2014 from 4.6 million ton in the preceding month. Widodo Santoso, Chairman of the Indonesian Cement Association (ASI), said that the increase in Indonesian cement sales was supported by the start of a number of central and regional government infrastructure projects. Santoso also detected an increase in development of property projects. Infrastructure and property are the sectors that absorb most cement.
Santoso added that there has been an increase in both infrastructure and property projects after Joko Widodo won the 2014 presidential election.
As usual, most cement was absorbed by the island of Java. In September 2014 a total of 3.26 million tons of cement was sold on Java (a 4.2 percentage point growth from the same month last year). On Sumatra 1.18 million tons of cement was sold (a 12.3 percentage point growth from the same month last year). The only island or region that showed a steep decline in cement demand was Bali. This decline was caused by the recent completion of the new Bali Toll Road.
ASI expects that total cement sales in Indonesia will grow about five percent (y/y) to 61 million tons in 2014.
The dominant market leader in Indonesia’s cement industry is Semen Indonesia which controls a 44 percent market share, followed by Indocement Tunggal Prakarsa (30.2 percent), and Holcim Indonesia (14.6 percent).
Due to various government infrastructure projects that are ready to start (for example the Giant Sea Wall project in Jakarta), cement consumption is expected to grow further in the years ahead. However, due to the relatively high benchmark interest rate of Bank Indonesia (7.50 percent), growth in the country's property sector has somewhat slowed.
Indonesian Cement Sales 2008-2014:
| Year | Cement Sales |
YoY Growth |
| 2014 | 61 million¹ | +5.1% |
| 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 forecast
Source: Indonesia Cement Association (ASI)