Indonesia's January cement sales rise and PT Semen Gresik announces new packaging plants

Indonesia's January cement sales rise and PT Semen Gresik announces new packaging plants
13 February 2012

Indonesia's domestic cement sales rose 15.2% YoY in January, according to PT Semen Gresik. According to the firm's website, the country's sales volumes in January reached 4.06Mt, slightly lower than 4.6Mt a month earlier.

Infrastructure development and cement sales are likely to be spurred by the central bank last week, cutting its benchmark rate to a record low 5.75%, and by the parliament in December passing a long-awaited land bill aimed at speeding up land acquisition.

"January 2012 domestic volumes are on target to meet our full year 2012 estimate of 53Mt, up 11% YoY, helped by continued low interest rates, resilient GDP growth and multiplier effects from the land clearing law," said Bahana Securities.

Meanwhile, PT Semen Gresik plans to develop new packing plants in strategic areas in the archipelago with the aim of improving product distribution and consequently cutting logistics costs.

"Currently, Semen Gresik has 18 packing plants. We hope to have 16 to 17 more in the next five years to lower distribution costs," Semen Gresik finance director Ahyanizzaman told The Jakarta Post.

Each packing plant, with a capacity to bag 200,000-300,000tpa of cement, would require about US$10m, he said.

Semen Gresik expects to complete the construction of at least four packing plants this year, according to Ahyanizzaman. The company's ongoing packing-plant projects comprise factories in Sorong (Papua), Banyuwangi (East Java), Banjarmasin and Balikpapan in Kalimantan and Riau.

"The packing plant in Banyuwangi is almost finished and the Papua plant is about 50% complete. Meanwhile, we are ready to construct the plants in Kalimantan. We expect to build in more areas in Kalimantan, however, we remain constrained by land acquisition," Ahyanizzaman said.

The packaging plant in Sorong will have a cement bagging capacity of 600,000tpa. Semen Gresik is investing around IDR200bn in the Papua packing plant, which is supported by a silo with a capacity of 10,000t and a 150m harbour.

Additionally, Semen Gresik is in the middle of constructing Tonasa V, a 2.5Mta cement factory in Pangkep, South Sulawesi, that is expected to be completed this June.

The company is also working on the Tuban IV, a 2.5Mta cement plant project in Tuban, East Java, and which is expected to be finished in March.

Both Tonasa V and Tuban IV will help the company to reach a production capacity of 23Mta this year from last year's 19.7Mta.

Below are details of Indonesia's cement sales for 201-12:

Month   Volume (t)    Change (%)
                                 MoM YoY

Jan    4,059,711     -10.9  15.2
Dec    4,556,598     -2.2  16.6
Nov    4,460,456     -4.4  26.3
Oct    4,667,772      21.5  21.8
Sep    3,842,978      6.7  48.3
Aug    3,603,234    -17.7  -0.3
Jul    4,376,898        6.7  16.8
Jun    4,101,104       0.4  20.7
May    4,082,890      9.3  24.8
Apr    3,734,202      -0.9  17.1
Mar    3,769,437     14.9  11.3
Feb    3,279,386      -7.0   9.7

Published under Cement News