Indocement anticipates conservative sales growth

Indocement Tunggal Prakarsa is targeting a conservative sales growth of four per cent this year to IDR15.8trn (US$1.1bn) on the back of a slowdown in domestic cement consumption, president director Christian Kartawijaya has said.

Mr Kartawijaya predicts demand for cement to pick up in the second half of 2019, after the country's presidential election to be held this month, he told the Jakarta Post.

The HeidelbergCement group company believes cement consumption will be driven by government infrastructure and the construction of residential projects and buildings, either in Java or outside Java.

Indocement's revenue was up 5.26 per cent YoY to IDR15.19trn (US$1.06bn) last year. However, its net income plunged 38.4 percent YoY to IDR1.15trn.

To anticipate declining profits, Indocement has prepared a long-term strategy to substitute coal with alternative, refuse-derived fuel. In September, Indocement collaborated with the West Java administration to buy 500t of RDF derived from 1500t of processed community waste.

Indocement has set aside IDR900bn IDR1trn in capex that would be sourced from internal cash. The capex would be used for business expansions, including adding a quarry in West Java to support production and the completion of cement terminals.