Cement sales in Indonesia stalled in April due to the legislative elections and slow infrastructure development in the first four months of the year.
Cement sales in Southeast Asia’s largest economy declined 0.4 percent year-on-year in April to 4.52 million tons, according to data from the Indonesia Cement Association (ASI).
“Demand for building material was low throughout the legislative campaigns, which is why cement sales were down last month,” said ASI chairman Widodo Santoso on Friday.
Figures for the sales of cement have declined throughout the archipelago. According to data collected by ASI, 934,000 tons of the building material was sold in Sumatra last month — a 4 percent drop from the same period last year.
Kalimantan saw an 8.7 percent decline in sales to 355,000 tons, while Sulawesi’s fell 3.4 percent to 322,000 tons. Cement sales in Bali and the Nusa Tenggara islands fell the most, with a 13.8 percent decline to 230,000 tons.
Only Java and some eastern parts of the country experienced some improvement; Java saw sales rise 3.1 percent to 2.57 million tons of cement.
Despite the slump reported in Kalimantan, Sulawesi, Bali and Nusa Tenggara, Widodo remained confident that business would pick up by 8 percent to 62 million tons nationwide this year.
“We hope to see a better performance next month. Hopefully, the presidential elections won’t have any negative effects on cement sales, which have fallen across the country, with the exceptions of Java and Maluku and West Papua,” he said.
Indonesia’s cement makers are also preparing themselves for the hike in electricity tariff, which starts in May.
Widodo said the association estimates the tariff increase to bring production costs up by 3 to 5 percent.
The government approved a decree to raise the tariff for exchange-listed companies in medium-scale industries by 38.9 percent, while large-scale industries will see a 64.7 percent rise.
Widodo said the country’s cement industry has requested incentives from the government — including a zero import tax for imported machineries — to compensate for the rising electricity costs.
Indonesia’s biggest cement producer remains state-owned Semen Indonesia, although units belonging to foreign companies, like German HeidelbergCement’s Indocement Tunggal Prakarsa and Swiss-based Holcim’s Holcim Indonesia, are creeping up to secure a close second and third place respectively
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