JAKARTA (TheInsiderStories) - Indonesia domestic cement sales rose by only 0.2% to 4.54 million tons in February 2017 from the same month last year as many as 4.53 million tons. This growth is far below the target of industry players of 4%.
Chairman of the Indonesian Cement Association (ASI) Widodo Santoso said overall domestic cement sales were still stagnant in the month. The sales growth was only recorded in Java, Bali and Nusa Tenggara. “By contrast, sales of cement in Sumatra, Kalimantan, Sulawesi and eastern Indonesia fell sharply by above 8%,” he said in Jakarta at the weekend.
He said the lower-than-expected increase in cement sales last month was due to several factors, among others, the high rainfall and floods that hit several areas. In addition, investment outside Java is yet to show significant progress. To that end, the producers and the industry players expect some major projects could consume more cement beginning this month as many infrastructure projects will start.
Based on the data ASI, cement sales in Sumatra fell 5.7% to 976,000 tons, Java rose 4.9% to 2.51 million tons, Kalimantan 296,000 tons (-8.2%), Sulawesi 369,000 tons (-12 .7%), Bali and Nusa Tenggara 270,000 tons (+ 18%), Maluku and Papua 120,000 tons (-5.9%).
As of February 2017, domestic cement sales fell 1.1% to 9.71 million tonnes. The exports jumped to 78,000 tons in February 2017.
He admitted that cement producers are concerned with the development of sales so far this year. Moreover, the cement industry is experiencing excess installed capacity. This situation is exacerbated by the operation of a number of new plants, such as in Kalimantan and Manokwari, Papua, which is developed by PT SDIC Papua Cement Indonesia, a joint-venture firm owned by Indonesian and Chinese businessmen.
Furthermore, he asserted, PT Semen Padang will operate the plant in mid-2017, followed by PT Semen Balfour factory in South Sumatra.
Referring to data from the Ministry of Industry (Ministry of Industry), investment in the national cement industry reached Rp 15 trillion in 2016.
Investments were spent by local and foreign cement players.
Minister of Industry (Industry) Airlangga Hartanto noted, cement consumption per capita national currently around 243 kilograms (kg), far below neighboring countries such as Malaysia 751 kg per capita, Thailand amounted to 443 kg per capita, and Vietnam amounted to 661 kg per capita. (HS)