Indonesia cement market outlook

Indonesia cement market outlook
Published: 22 March 2010

Domestic demand for cement may rise six per cent this year, said Christian Kartawijaya, finance director at PT Indocement Tunggal Prakarsa, the country’s second-largest cement company.

The domestic sale of cement from January to May last year was “very low” because of the global recession, he said.

“No wonder that the last two months the increases have been significant. We expect our sales target to exceed the market growth,” he said in Jakarta.

Domestic cement sales last month rose 13.5 per cent to 6.3Mt from the same period a year earlier, Christian said. Indocement’s sales in February 2010 were 1.95Mt, a rise of 19.1 percent from the same month last year, he said.

The company plans to boost production capacity to 18.6Mt this year from 17.1Mt in 2009, he said.

The increase will come from the company’s new plant in Palima­nan, West Java, which is expected to start production in April with a capacity of 1.5Mta, Christian said. The increase may help Indocement compete with the nation’s biggest cement maker, PT Semen Gresik, which estimated in December that it had production capacity of 19Mt in 2009.

Indocement also plans to build a cement mill with production capacity of 1.5Mta, Kartawijaya said, adding that the new project is expected to be operational by early 2012.

It is also considering building a coal-based power plant with a total capacity of 100MW, he said.