PT Indocement - March 2019

PT Indocement has booked domestic cement sales of 18.1Mt in 2018, up by 5.7 per cent YoY. Domestic cement demand in Indonesia increased by just 4.8 per cent last year, thereby raising Indocement’s market share from 25.3 per cent in 2017 to 25.5 per cent in 2018. To help meet clinker demand in the country, the company also increased its clinker sales by 47.6 per cent YoY to 960,000t. Overall, PT Indocement’s total sales volume in 2018 advanced by seven per cent to 19.2Mt, compared to 17.9Mt in the previous year.

To compensate for higher production costs last year, on the back of rising fuel prices and paper packaging costs, coupled with the currency depreciation against the US dollar, the company increased its average selling price across the country. As a result, net revenue for 2018 improved by 5.3 per cent to IDR15,190bn (US$1.06bn).

Last year also saw competition intensify in the market following the arrival of new players and the ongoing oversupply situation. For 2019 Indonesia will have 115Mta of installed capacity, while consumption is forecast to grow by just four per cent to 72Mt, implying an overcapacity of over 40Mta. In response to this, PT Indocement has ramped up its efficiency initiatives by operating its new 4.4Mta P14 plant in full swing. Alternative fuel usage should help decrease energy costs while two new terminals in Palembang and Lampung are expected to help lower logistics and distribution costs.