Indonesia: 8% growth predicted for 2017 consumption

According to the Chairman of the Indonesian Cement Association (ASI), Widodo Santoso, national cement consumption is expected to grow by 8.04 per cent in 2017, reaching 68Mt. The growth is expected to come as a result of steady overall growth and higher demand for building materials for public projects. Demand is forecast to reach 62.94Mt, a 4.14 per cent increase YoY in 2016.

Mr Santoso commented on the predicted growth, saying, “We expect the government-initiated projects, like the one-million houses and other strategic projects, can be realised smoothly.”

However, Indonesia has an estimated 102Mta capacity, leaving the country is a position of oversupply. The average utilisation rate of existing plants stands at just 65-70 per cent. In the 2014-2016 period 13 new plants added a further 34Mta to the country’s total production capacity, leading Mr Santoso to call on the government to cease permit approvals for the development of any new plants: "ASI has officially requested the government for a moratorium on new plants until 2019.”

Cement sales for 9M16 reached 44.71Mt, a 2.95 per cent increase YoY.