Indonesia: cement consumption hit record low

Indonesia: cement consumption hit record low
Published: 18 June 2009


The national cement market in May was still sluggish, slumping for five months in a row this year.

In May, cement consumption fell 14.4 per cent to 3.05Mt from 3.57Mt in May 2008. Such a YoY decline was the highest so far this year.

In April, the domestic cement market dropped 7.4 per cent to 2.8Mt from 3.1Mt in April 2008. Demand for cement in March also slumped 11 per cent to 2.67Mt from 2.99Mt in March 2008.

Slow loan disbursement to property projects and high housing loan interest rates are blamed for the sluggish cement market.

According to Chairperson of the Indonesian Cement Association (ASI) Urip Timuryono, the national cement consumption all this time had been supported by private property projects and government infrastructure projects.

"Although infrastructure investments in many regions have started, developers are actually still facing business uncertainty. It is hard for property projects to get funding since banks still run a tight liquidity policy. As a result, demand for cement declines," he confirmed yesterday.

Data by ASI showed the sluggish cement market in May took place in five big islands. The cement market in Java slumped 16.7 per cent in May from 2.03Mt to 1.7Mt. In the meantime, the cement markets in Sumatra, Kalimantan, Sulawesi, Nusa Tenggara, and Maluku and Papua fell by 14.7 per cent, 11.8 per cent, 1.5 per cent, 10.8 per cent, and 11 per cent, respectively.