Indonesian cement sales rise 0.2% in February 2017

Cement sales in Indonesia rose 0.2 per cent YoY to 4.54Mt in February 2017 from 4.54Mt in the same month one year earlier, said Indonesia Investments.

Weak cement sales in the second month of 2017 are blamed on adverse weather conditions (a high amount of rainfall caused floods in several parts of Indonesia) and on the fact that direct investment in infrastructure and property outside Java remains bleak.

Widodo Santoso, chairman of the Indonesia Cement Association (ASI), said Indonesia's cement sales remained stagnant so far in 2017 with growth only being recorded in Java, Bali and Nusa Tenggara.

Meanwhile, the islands of Sumatra, Kalimantan, Sulawesi and parts of eastern Indonesia saw big declines (more than eight per cent) in terms of cement sales.

Between January-February 2017, Indonesia's overall cement sales fell 1.1 per cent YoY to 9.72Mt compared to sales in the same period one year earlier.

In 2016 total installed cement production capacity of Indonesia reached 92.7Mta, while only 62Mt of cement were sold domestically that year. This year total installed production capacity is expected to reach beyond 100Mta, while cement sales are only targeted to grow 4-5 per cent YoY in 2017, implying rising overcapacity.

Cement manufacturers in Indonesia hope that the central government will soon boost infrastructure development. Moreover, they would like to see developments with the government's "One Million Houses" programme.

Indonesian Industry Minister Airlangga Hartarto stated that Indonesia's average per capita cement consumption is remains very low at 243kg, far below conditions in neighboring countries Malaysia (751 kg), Thailand (443kg), and Vietnam (661kg).