Indocement sales advance, further growth ahead, Indonesia

PT Indocement Tunggal Prakarsa, part of the HeidelbergCement Group, said on Tuesday cement sales rose 15 per cent in 2011 and forecasts a strong rise in infrastructure projects supported by the government’s recently-passed land clearing law.

Domestic sales volumes by Indocement rose 20.2 per cent as the Indonesian construction sector has been benefiting from lively activity, particularly in the residential and high-rise construction sector, noted HeidelbergCement. As a result of lower stronger local consumption, export deliveries were down 41.5 per cent. Overall, cement and clinker sales volumes grew 15.3 per cent to 16Mt compared to 13.9Mt in the previous year.

Substantial rises in input costs, particularly fuel, could only partially be offset by cement prices rises. Therefore, HeidelbergCement noted that to counteract margin pressures: “Indocement is continuing a series of measures to increase cost efficiency and optimise purchasing activities.

With promising prospects. Indocement has started construction of an additional grinding unit at its Citeureup plant with a capacity of 2Mt, set to be commissioned in 2013.

The company also said in a statement it expected national demand for cement in 2012 to increase 8-10 per cent with infrastructure momentum expected to pick-up due to the land acquisition bill. In December 2011, Indonesia's parliament stamped the long-awaited bill in an attempt to break the bottleneck in infrastructure development that has long been seen as holding back growth in the country.