Indonesia's cement sales fall 10% in 2020

Indonesia's 2020 domestic cement sales were recorded at 62.7Mt. The Indonesian Cement Association (ASI) reports the sales represent a fall by 10.4 per cent from 2019 sales of 70Mt, the lowest growth in 10 years. The highest number of domestic cement sales in 2020 occurred in October at 6.2Mt, while the lowest sales occurred in May of 3.2Mt. 

By December 2020, both monthly and yearly, sales on all islands contracted. Bank Mandiri's research team recorded the deepest contraction in cement sales on a monthly basis on the islands of Maluku and Papua, reaching 20 per cent. Meanwhile, on an annual basis, the deepest contraction of 6.7 per cent occurred in the Bali-Nusa Tenggara region.

Throughout 2020, only Maluku-Papua experienced positive cement sales growth of 9.6 per cent. The deepest contraction occurred in Bali-Nusa Tenggara and Java, which shrank by 13.7 and 13.1 per cent YoY, respectively, followed by Sulawesi, Kalimantan and Sumatra, which contracted by 11.8, 10.8 and 3.9 per cent, respectively. 

Cement exports fell 1.6 per cent MoM to 0.67Mt in December 2020. However, Cement exports in December 2020 grew by 142.8 per cent YoY. Cement exports throughout 2020 expanded 48.2 per cent YoY to 9.3Mt. The export market  accounts for 12.9 per cent of total domestic production. 

Bank Mandiri's Industry and Regional Research Department team estimates that domestic cement sales in 2021 will grow between 3-6 per cent. 

Cement sales are expected to increase in 2021 on the back of infrastructure projects, primarily due to increased infrastructure spending in the State Budget (APBN) 2021. The infrastructure allocation grew by 47.3 per cent to IDR414trn (US$29.55bn).