Semen Indonesia expects cement demand to increase by as much as eight per cent on the back of an improving political environment, the company’s president director, Dwi Soetjipto, has said.

Speaking to the Jakarta Post, Dwi said: "With the political situation hopefully becoming more stable next year, I think demand should grow in the range of 7-8 per cent by volume," Soetjipto said in an interview in Jakarta Wednesday.

Indonesia's largest cement producer is planning to spend more than US$700m on new plants to prepare for a surge in demand as President Joko Widodo boosts infrastructure spending.

The newly-elected president plans to divert some of the IDR276trn (US$22.6bn) the government is budgeted to spend on fuel subsidies to build ports, roads and dams. Jokowi will need parliament, dominated by his political opposition, to sign off on his future budget spending plans.

During the first 10 months of this year, Indonesian cement sales increased by 10.4 per cent YoY to 48.752Mt. A local industry source told CemNet News that while the effect of the new government may boost demand to a certain degree, the rainy season is now starting and consumption may slow.