Indonesian July 2014 cement delivery fall 25%

Indonesian cement dispatches dropped by a quarter YoY to 3.7Mt in July 2014. The slowdown is attributed to falling economic growth, the presidential election and the Idul Fitri/Lebaran holiday. Apart from business closures, the holiday also leads to the large-scale movement of workers to their hometowns, which results in trucks being banned from specific roads.

According to Widodo Santoso, chairman of the Indonesian Cement Association (ASI), cement sales are expected to recover and expand over the next five months as infrastructure investment rises.

Meanwhile, Indocement Tunggal Prakarsa has disbursed only 20 per cent of its IDR4trn-5trn (US$342m-427m) total planned capital expenditure in 1H14.

"Our capex disbursement was between INR800bn and INR900bn in the first half to expand the capacity of our P14 plant in Citeureup, West Java," Indocement finance director Tju Lie Sukanto said.

The 4.4Mta P14 plant represents an investment of US$120-125/t and is expected to be completed by end-2015.

Indocement CEO, Christian Kartawijaya, said the P14 plant would have the capacity to produce 4.4Mta of cement, with around US$120-125 worth of investment per tonne of cement needed to build the plant.