PT Indocement - June 2019

Cement consumption in Indonesia is expected to grow by 6-8 per cent YoY in the second half of 2019, according to PT Indocement. For the full year 2019 the growth figure is forecast to be between 3-4 per cent, with consumption mainly driven by infrastructure projects. Commercial and residential projects due to start in the 2H19 will add to demand, while the residential property market is expected to see a boost with the reduction in tax on high-end housing and a relaxation of the loan-to-value (LTV) rules. 

The company also expects to see an easing of its costs this year on the back of a stronger rupiah and lower coal and fuel expenses in the first half of 2019. Although oversupply will remain a problem for the next few years, prices are forecast to stabilise in 2019 with some increase predicted in the second half of the year. PT Indocement has made an encouraging start to the year with total sales volumes increasing by 2.4 per cent YoY to 4.53Mt in the 1Q19, while revenue advanced by 8.5 per cent and EBITDA improved by 25.9 per cent.