Indonesian producers predict 2016 market pick-up

PT Semen Indonesia and its subsidiary Semen Gresik are optimistic the domestic cement market will improve in 2016 despite tight competition.

Bambang Joko, head of  sales at state-owned  PT Semen Indonesia, blamed this year’s economic slowdown on the current decline in cement consumption. "But the slump would not last long. Demand would rise in 2016," he said.

His comments highlight that infrastructure and construction bottlenecks are about to start moving again. Almost all cement producers suffered a decline in 1H15 sales because of the delay in the implementation of the country`s infrastructure projects.

In the second half of 2015, especially in the fourth quarter, an increase in cement consumption is predicted as the government has started disbursement of budget fund for infrastructure projects.

Semen Gresik has a 22.8 per cent share of cement market in West Java, but its sales fell 5.7 per cent to 915,828t in the first half of the year from 970,833t in the same period in 2014.

Marketing director of Semen Gresik, Muhammad Saefudin, said cement consumption is expected to increase in the second half of the year, but competition has increased with a number of new factories are coming on-stream including domestic and foreign cement factories. "However, we are optimistic our market prospects are still encouraging," he said. He added many brands are competing in the market in quality and in price and that Semen Gresik will continue to expand its capacity by building new factories.