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Indonesia’s cement sales fall in August 2013

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World Cement,

Domestic cement sales in Indonesia fell 5.8% y/y to 3.3 million t in August 2013. Cement sales fell a more drastic 32% month-on-month, but it should be noted that a two-week holiday in August following Ramadan would have significantly impacted activity. The year-on-year decline is taken as an indicator of a slowdown in Indonesia, with a recent report from Fitch Ratings predicting slowing growth in the property sector over the next 12 months. This is backed up by cement industry statistics from the Indonesian Cement Association: in 2011, cement sales grew by about 17%; in 2012 this figure was 13% and so far this year domestic sales are up 5.7% and total sales (including exports) are up 6.3% y/y. The Association is predicting total growth of 7.5% this year, a weaker figure but still one that many other countries would envy.

Exports of cement were higher in August 2013 compared to August 2012, at 95 000 t. Of the major cement producers, Semen Indonesia, with a 43.8% market share, achieved 16% growth y/y in the January – August period. Indocement (30.4% market share) remained stable at 11.1 million t, while Holcim’s sales were down 2.9% to 5.2 million t. Factors affecting cement sales include higher interest rates, a weakening rupiah and the increased price of subsidised fuel.

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