Building boom prompts surge in Indonesian demand

Building boom prompts surge in Indonesian demand
03 October 2011

Indonesian cement sales are forecast to rise further this year amid aggressive growth in the property market and a build-up in infrastructure projects, the Indonesian Cement Association (ASI) said.

ASI now forecast 2011 sales to rise 10 per cent on a year earlier, a sharper increase than
the six per cent rise it forecast earlier in the year.

Total cement sales are estimated to rise to 44Mt this year, said ASI chairman Urip Timuryono.

“The increase in cement sales is supported by growth in the property sector and government spending on infrastructure development,’’ said Urip, a former president director at Semen Gresik, the country’s largest cement maker.

Indonesia’s government forecasts the economy to expand 6.5 per cent this year, after growing 6.1 per cent in 2010. It unveiled a plan earlier this year to construct projects such
as toll roads and sea ports in a bid to fuel economic growth.

Cement sales slowed in the third quarter this year due to the Ramadan in August, when business activity slackened. Sales in August declined 18 per cent to 3.6Mt from the
previous month.

 “The decline is a seasonal factor, and we have anticipated that,’’ Urip said. He predicted demand would pick up in the fourth quarter.

Total cement sales – both locally and abroad – rose 8.7 per cent to 31.2Mt in the eight months to August from the same period last year. Sales in the domestic market rose 13
percent to 30.4Mt, while exports declined to 780,000t.

“Cement sales in September may experience a declining trend,” Urip said.

Source: Jakarta Globe
Published under Cement News