Indonesia cement demand up 9.9% in January 2018

Indonesia's cement consumption rose 9.9 per cent YoY to 5.68Mt in January 2018. The growth of demand is being attributed to rising cement demand on the back of the government-led infrastructure development programmes, particularly the construction of toll roads.

Widodo Santoso, Chairman of the Indonesian Cement Association (ASI), said cement consumption rose at similar levels across the country. Highest growth was reported on Sumatra, traditionally the second-biggest cement-consuming island in Indonesia, where a 17.8 per cent increase in cement sales to 1.21Mt was detected in the first month of the year.

Meanwhile, growth of cement sales was slowest on Java, the biggest cement consuming island in Indonesia, as well as the Bali and Nusa Tenggara region.

The construction of toll roads, dams and power stations were cited as reason for strong cement demand growth on Sumatra. Meanwhile, strengthening commodity prices boosted people's purchasing power in the commodity-rich areas in Sumatra and Kalimantan. Santoso said this was particularly visible in East Kalimantan and South Kalimantan where cement demand grew rapidly in accordance with the higher coal price.

Semen Baturaja, which focusses on the Sumatran market, saw its cement sales rise 25 per cent YoY to 161,000t in January 2018. In the full-year 2018, the company targets to sell 2.75Mt of cement.

Indocement Tunggal Prakarsa posted a 10 per cent YoY increase to 1.5Mt in January. This cement producer targets to see the full-year cement sales rise 6-7 per cent YoY.

Cement sales of Semen Indonesia, the country's biggest cement producer, rose around seven per cent YoY to 2.34Mt in January 2018.