Cement Sales Will Have Grown Steadily at 16 Percent

Indonesian cement producers estimate that cement sales will have grown steadily at 16 percent during the first half of this year, driven by the realization of infrastructure projects and the residential housing boom. Widodo Santoso, the newly appointed chairman of the Indonesian Cement Association (ASI) said in Jakarta on Monday that cement sales during the January to June period were estimated to reach 26 million tons, a 16 percent increase from the same period last year. "As of May, demand had already risen by 16 percent as infrastructure projects continue. A more favorable credit interest rate also encouraged people to build houses, which in turn fueled the demand for cement, " he told reporters on the sidelines of the 2012 Cemtech Asia conference in Jakarta. A number of infrastructure projects under the master plan for economic acceleration and expansion, including roads, bridges and ports, are being realized. Local banks have also cut their lending rates in line with the move by the central bank, which several times has slashed its benchmark rate since the end of last year to stand at 5.75 percent currently. Between January and May, domestic cement sales reached 21.40 million tons, up 16.4 percent from the same period last year. The highest growth rate was seen in Kalimantan, where take-up jumped by 28.9 percent to 1.68 million tons from a year earlier; Followed by Sulawesi and Nusa Tenggara, where sales surged by 24 percent to 1.62 million tons, and by 16.2 percent to 1.15 million tons, respectively, according to the association s statistics. This trend would likely continue with robust sales growth being seen on the islands beyond Java, despite the lower volume compared to Java, which traditionally accounted for up to 55 percent of the nation��s total cement sales, Widodo said. According to ASI data, sales across Java totaled 11.54 million tons, representing 53.93 percent of overall sales in the first five months of this year, followed by Sumatra with 4.9 million tons, or 22.9 percent of sales nationwide. Boosted by the positive outlook in sales during this period, the full year s sales would likely reach 54 million tons, up around 12 percent from last year, Widodo added. This would be higher than expected as previously, the association had predicted that cement sales would grow moderately by 6 percent this year to 49.82 million tons, as it had already booked record-high growth of 17.5 percent to 47 million tons last year. We re still facing a challenge from the impact of the recession in Europe. But, last year we still recorded stable growth and, so far this year, we ve seen robust growth in sales, " he said. The nation s cement consumption per capita was 200 kilograms last year and still leaves enormous room for future growth along with the country s economic growth. Indonesia s domestic cement consumption could break 55 million tons by 2015 and exceed 100 million tons in 2020, the Industry Ministry has estimated. To anticipate the surge in cement demand, domestic cement manufacturers are expanding their production capacities from 56.82 million tons in 2011 to 80.39 million tons by 2015. Indonesia s top cement maker, PT Semen Gresik, for example, reportedly plans to invest Rp 7 trillion (US$742 million) to build two plants in Java and Sumatra. Source: uaecement