Indonesia’s domestic cement consumption rose 12.3 per cent in December from a year ago, resulting in a small rise for 2006 despite the impact of weak consumer spending early last year, industry data showed on Thursday.
Domestic consumption hit 2.97Mt last month compared to 2.64 million in December 2005, according to data from the Indonesian Cement Association. The data was provided by Indonesia’s largest cement maker, PT Semen Gresik Tbk .
In early 2006, cement sales were hurt by a government decision late in 2005 to crank up domestic fuel prices, a move that sent inflation to around six year highs and prompted the central bank to raise interest rates sharply.
But the strong sales growth in November and December took 2006’s total volume to 32.1Mt, or 1.8 per cent higher than the previous year, after expectations for flat to lower volume growth last year.
Domestic sales by state-owned Gresik jumped five per cent in December to 1.35Mt, taking the full year figure to 14.34Mt.
Including exports, Gresik sales jumped 3.4 per cent in December from a year ago and 2.6 per cent for all of 2006.
Some analysts expect sales to grow by around five per cent this year, helped by lower interest rates and the launch of infrastructure projects.
The central bank has been gradually cutting its key interest rate, known as the BI rate as inflation has subsided. The BI rate fell to 9.5 per cent in January, the lowest since August, 2005. It reach a peak of 12.75 per cent in late 2005.