Indonesia's new capacity spree

Published 22 May 2012

Tagged Under: Indonesia market report 

This June, Cemtech Conferences & Exhibitions will host its annual Asia event within the glorious setting of the Hotel Mulia, Jakarta, before an audience of dedicated cement professionals eager to learn the latest developments in the Indonesian and wider Asian cement sector. Ahead of the meeting, Andy Lesmana of PT Nomura Indonesia provides an outline of the country’s economy and cement market, which is currently among the busiest in the world.

Cemtech looks forward to taking centre-stage in the thriving Indonesian market during its annual Asia event,

to be held on 17-20 June 2012 in the capital Jakarta

Last year was particularly positive for the Indonesian cement industry. Domestic sales grew by 12.6 per cent YoY – much higher than the 3.9 per cent CAGR in the last seven years – and the trend is expected to continue. The domestic macroeconomic outlook still remains upbeat and there is the prospect of accelerating infrastructure development potentially bringing a multiplier effect to the economy.

Cement capacity expansion projects currently underway by existing players are addressing increased cement demand, hence volume growth is likely to continue. However, near-term challenges exist. Energy costs are rising and higher fuel expenses would mean increasing distribution costs, especially as transportation bottlenecks remain a major issue. Nonetheless, with a cement per capita consumption of just 200kg, the country’s long-term prospects remain very positive and the entry of new cement companies into the market may prove beneficial for the country as well as existing producers.

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