INDONESIA: Cement Sales Up in August on Demand by Property, Infrastructure Projects

Indonesian cement sales grew 33 percent year-on-year in August, due to strong demand from property and infrastructure development projects, the industry body announced on Wednesday.

Sales of the building material stood at 4.66 million tons in August, according to Widodo Santoso, chairman of the Indonesia Cement Association (ASI). That compares to 3.5 million tons in the same month last year.

Widodo said various projects, such as construction of power plants and smelter, apartment, housing and hotel development in the country helped spurred demand for the building material.

“I expect demand to continue to increase in the last four months of 2014 … So that the 5 percent growth target for cement sales can be achieved,” he told the Jakarta Globe via text message.

Between January and August, cement sales rose 2.45 percent year-on-year to 37.5 million tons.

Cement sales declined by 25 percent year-on-year in July to 3.76 million tons, due to fewer working days and the presidential election.

A ban on heavy trucks on main roads in the travel period following Ramadan also contributed to the decline.

However, for the entire year of 2014, Widodo estimates sales to grow by around 5 percent, roughly on pace with last year’s growth.

Indonesia saw a 5.5 percent growth in cement sales last year, with the bulk of sales in Java, the country’s most populous island.

State-controlled cement maker Semen Gresik leads producers in sales, controlling 44.6 percent of the market. Indocement Tunggal Prakarsa, a local unit of German company Heidelberg Cement, followed in second place with a 29.3 percent market share and Holcim Indonesia, a local unit of Zurich-based Holcim, was in third place with 14.7 percent.

Other players, including Semen Bosowa Maros and Siam Cement Group, control an 11.4 percent share.

Semen Indonesia announced Tuesday that its Rp 68 billion ($5.76 million) cement packing plant in Mamuju, West Sulawesi, began commercial operations.

Semen Indonesia president director Dwi Soetjipto said the plant will be able to process up to 450,000 tons of cement per year. Construction began in October 2013.

“The presence of our Mamuju packing plant will help strengthen our distribution networks. It is part of our efforts to ensure adequate supply [of cement] in this region,” Dwi said in a statement.