Cement demand in Indonesia in October 2017 and the first 10 months of 2017 has shown sustained robust growth. The Indonesian Cement Association (ASI) and PT Semen Indonesia expect this trend to continue for a further one or two months before the start of the rainy season.
In October domestic cement consumption was 6,754,075t, up 12.5 per cent compared to October 2016, according to ASI.
In addition, exports were 272,682t, up 39 per cent of which cement exports were 75,671t, a YoY rise of 20.4 per cent, while clinker exports were 197,012t, up 47.8 per cent. The export figures bring total consumption in October to 7,026,757t, a YoY increase of 13.3 per cent.
Indonesia's leading cement producer, Semen Indonesia, reported domestic sales in October 2017 of 2,772,156t (up 8.8 per cent) or 41 per cent of the country's domestic sales. In addition, the company exported, via its subsidiaries Padang and Tonasa, were 145,271t (+131.2 per cent), which represent 53.3 per cent of the country's exports. Including exports, PT Semen Indonesia's total sales volume increased 11.8 per cent to 2,917,427t.
In the first 10 months of 2017, domestic consumption reached 54,186,131t, representing a 7.3 per cent rise YoY. Consumption in Java (56.6 per cent of the total consumption) remains the stronghold of the Indonesia's demand growth as it expanded 11.9 per cent in 10M17 while Sumatra noted a 4.7 per cent YoY increase. Two other major islands – Kalimantan and Sulawesi – reported a market contraction of -1.7 and -4.4 per cent, respectively. Maluku and Irian Jaya saw demand drop by -1.5 per cent but Nusa Tenggara reported a 4.8 per cent expansion.
Combined with a 64 per cent rise in exports to 2,286,693t, total deliveries by Indonesian cement producers advanced 8.8 per cent to 56,472,824t. Exports included 860,065t of cement (+108.1 per cent YoY) and 1,426,628t of clinker (+45.4 per cent YoY). Regional competition appears to have had little effect on the country's cement and clinker exports.
Semen Indonesia saw total sales increase 9.3 per cent YoY to 23,695,837t during 10M17. It reported a rise of 4.6 per cent in domestic sales to 22,164,000t and exports rose 216.5 per cent to 1,531,000t.
The new capacities by existing and new players are now in operation and are expected to increase competition in the market as well as keep prices under pressure.
