Indocement expects 3-5 per cent rise in domestic consumption

Indonesia's second-largest cement producer, PT Indocement Tunggal Prakarsa, expects domestic cement consumption to increase by 3-5 per cent in 2017, its President Director, Christian Kartawijaya, told the Jakarta Post.

Mr Kartawijaya said that he attributes the expected rise in demand due to a number of factors including funds coming from the government’s tax amnesty, the drop of interest in housing loans (KPR) and relief in requirements for the loan-to-value (LTV) ratio.

Last year Indocement's net revenue fell to IDR15.36trn (US$1.15bn) from IDR17.8trn in 2015 and IDR19.9trn in 2014. One of the triggers was President Widodo’s instruction to state-owned cement maker PT Semen Indonesia in January 2015 to lower the price of cement by IDR3000/bag. Therefore, Indocement has been trying to carry out various efficiency measures, leading to an annual drop of 9.18 per cent in its cost of goods sold to IDR9.89trn in 2015 and an 8.7 per cent drop to IDR9.03trn in 2016, the Jakarta Post noted.