Holcim Indonesia sees sales volume grow by 21.1% in 1H16

PT Holcim Indonesia Tbk, part of the LafargeHolcim Group, noted that domestic sale prices of cement dipped 17 per cent in 1H16, but the company still achieved 11.5 per cent increase in sales revenues to IDR4.8tn (US$3.66m) and a 10 per cent improvement in absolute gross profit. This price erosion is expected to continue, the company said.

An enlarged operation which includes Lhoknga cement plant in Aceh, acquired in February 2016, supported the company's sales volume growth up by 21.1 per cent to 5.2Mt, compared with the same period last year.

Holcim was helped by absolute operating costs (distribution, selling, general and administrative costs) which were down by 1.4 per cent to IDR831bn (2015: IDR843bn), despite the higher sales volume. Still, the loss for the period was IDR51.4bn compared to a loss of IDR138.1bn in the previous year.

Holcim reported that the national cement sales in the largest market Java was disappointing, marginally higher by 1.3 per cent to 16.2Mt, Sumatra grew seven per cent to 6.2Mt, but Kalimantan contracted by 16 per cent to 2Mt. The Government’s multiple stimulus measures have yet to gain traction.

Meanwhile, the domestic cement industry has recorded double-digit growth in newly-added capacity with six new plants opening representing an additional 13Mta of capacity. Current forecasts for the end of 2016 suggest a rise in demand to 63Mt, while the industry capacity is nearing 100Mta.