Indocement Opens New Cement Terminal & Aims for Low-End Market
Indocement Tunggal Prakarsa, the second-largest cement manufacturer in Indonesia, has high hopes for its second brand in the low-end cement market of Indonesia. Considering the challenging environment for the nation's cement companies - most notable the fierce competition and significant supply glut - Indocement is using another strategy in order to gain its market share.
Antonius Marcos, Corporate Secretary of Indocement Tunggal Prakarsa, said the company has been developing another brand - called Rajawali - to improve its corporate earnings because Rajawali cement is offered at more affordable prices to the consumer (about IDR 10,000 cheaper than the company's main brand Tiga Roda), while the quality of Rajawali cement is still good.
Currently, the sales volume of Rajawali cement is still low, contributing only around 2 percent to Indocement's total cement sales. However, if the company detects rising appetite for Rajawali cement, then it will immediately boost production. Another strategy that is being applied by Indocement to improve its corporate earnings is to boost exports of clinker.
Earlier this week Indocement opened its new cement terminal in Palembang (South Sumatra) that has a handling capacity of 500,000 tons of cement per year. This new terminal will contribute to a better distribution channel and logistics across the western part of the Archipelago. Currently, Indocement's market share on the island of Sumatra, the second-biggest cement consumer (after Java island), is around 14-15 percent. With the new terminal, the company hopes to raise this figure to the range of 20-25 percent in the future.
Besides the new terminal in Palembang, Indocement owns seven other terminals across Indonesia, namely in Semarang, Lombok, Tanjung Priok, Pontianak, Surabaya, Banyuwangi, and Samarinda.
Annual Installed Production Capacity in Indonesia:
| Company | Production Capacity (in million tons) |
| Semen Indonesia | 35.5 |
| Indocement Tunggal Prakarsa | 24.9 |
| Lafarge Holcim Indonesia | 14.5 |
| Semen Merah Putih | 7.5 |
| Semen Bosowa | 7.0 |
| Semen Anhui Conch | 4.5 |
| Semen Baturaja | 3.8 |
| Semen Pan Asia | 1.9 |
| Siam Cement Group | 1.8 |
| Semen Jui Shin | 1.5 |
| Semen Serang (Haohan) | 1.2 |
| Semen Jakarta | 1.0 |
| Semen Hippo (Sun Fook) | 0.6 |
| Semen Kupang | 0.3 |
| Semen Puger | 0.3 |
Source: Kontan