INDONESIA: 11% October Sales Jump Cements a Strong Year

A flurry of construction activity for new buildings and infrastructure across the archipelago sent October cement sales up by 11 percent compared to a year earlier, industry figures show, bringing the rise in sales for the first 10 months of the year to 15 percent. 

Strong cement demand by property and construction companies pushed sales in Southeast Asia’s largest economy up to 5.17 million tons in October, Indonesian Cement Association data released on Tuesday show. Total cement sales across the country for the first 10 months of this year was 44.63 million tons. 

Total sales for Semen Gresik, the country’s largest cement maker, grew 11 percent to 2.19 million tons in October from the same month a year earlier. 

The company, which has previously floated a plan to change its name to Semen Indonesia, has operations in Padang, West Sumatra, and Tonasa, South Sulawesi. 

The October figures brought Semen Gresik’s total sales for the first 10 months of this year to 18.19 million tons, up from 16.07 million tons in the same period last year, the data showed. 

Ahyanizzaman, the finance director of Semen Gresik, said last month that the company’s cement sales target for this year was 23 million tons. 

Cement production in Indonesia is forecast to reach 65 million tons in 2013, a 7 percent increase from this year’s target of 60.56 million tons. Part of that increase will be provided by an increase in the number of cement producers in the country, said Panggah Susanto, the Industry Ministry’s director general, last month. 

Semen Gresik’s competitors in the cement industry include Holcim Indonesia, Indocement Tunggal Prakarsa and Semen Bosowa Maros, a unit of the Bosowa Group. There are more than 10 cement makers in Indonesia. 

Indonesia’s economy expanded by 6.2 percent in the third quarter this year and is forecast to grow by 6.5 percent this year, the same pace of economic expansion it recorded last year. 

Indonesia’s economy is typically driven by domestic consumption. Cement and car sales are used as a leading indicator of economic growth in the country.