Indonesia-Investments reports that the new government is likely to ramp up infrastructure development, boosting cement sales. Semen Indonesia, Indocement and Holcim Indonesia are expected to benefit, earning a positive middle to long-term outlook from Credit Suisse Securities Indonesia. It is also expected that the Indonesian central bank will lower its interest rates in the longer term, which would be good for property development. Meanwhile, the increase in average selling prices and improved production efficiency are also set to boost companies’ bottom lines.
The Indonesian Cement Association (ASI) is expecting cement sales to grow by about 5% y/y in 2014, reaching 61 million t, putting it more or less in line with GDP growth. Meanwhile, the incoming President Joko Widodo has pledged to achieve increased GDP growth, which would further reassure cement producers.
Cement sales have slowed recently with the presidential elections and religious holidays over the middle of the year. Widodo enters office later this month, at which point presumably his new policies will begin to be put in place.
Adapted from source by Katherine Guenioui
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