JAKARTA (TheInsiderStories) - The Indonesian Cement Association reported that the national cement export reached 1.1 million tones of cement in February or jumped by 240 percent compared to same month in 2020 around 450,000 tones of cement. While, the domestic consumption only grew 0.8 percent to 4.6 MT of cement compared to the previous year.
According to the chairman, Widodo Santoso, in total domestic and export sales increased by 14 percent from a year ago to 5.7 MT of cement. He also reported, total national production in the first two months of 2021 decreased by 2.7 percent to 9.54 MT of cement.
Based on the association data, there are three regions that have positive cement consumption growth, namely Sulawesi rose by 47 percent to around 485,000 tones of cement, Maluku and Papua jumped by 41 percent to around 168,000 tons, and Sumatra grew 3.4 percent to 1.3 MT of cement.
“We hope that in March 2021 the domestic consumption will increases above 1 percent,” he said in the report.
Santoso, sees the domestic cement consumption in this year will increase by 8 percent to 67.1 MT of cement after fell more than 10 percent in 2020. However, this figure is still below the 2019 consumption performance of 69.9 MT of cement.
He estimating that infrastructure projects will contribute 20 – 25 percent of the total consumption. Furthermore, toll road construction around 15 – 20 percent, and housing around 55 – 65 percent. Early 2021, the domestic cement consumption still in downward trend, dropped 5.8 percent compared to the same month in 2020.
The official data showed the cement consumption across the country moves in the red zone, except in Sumatra island, grew around 2.9 percent in annual basis to 1.10 MT of cement. While, in Java the consumption fell by 4.2 percent to 2.72 MT of cement. However, export volumes grew 71.3 percent to 117,968 MT of cement from a year ago.
The realization of clinker exports reached 799,720 MT of cement or rose 160.2 percent from 2020. In total, the export volume of the national cement industry rose by 143.94 percent to 917,688 MT of cement, he adds.
“The cement industry has succeeded in increasing exports more than twofold, bringing total sales to 5.82 million tons or an increase of 4.3 percent,” according to the chairman, by adding the main driver of domestic demand in 2021 is the COVID-19 vaccine program.
During last year, two major producers, PT Semen Indonesia Tbk (IDX: SMGR) and PT Indocement Tunggal Perkasa Tbk (IDX: INTP) businesses has been hit by the pandemic. The state-owned cement producer reported the net sales dropped by 12.87 percent to Rp35.17 trillion from previous year of Rp40.37 trillion due to lower demand for building material products.
However, the net profit jumped by 16.73 percent to Rp2.79 trillion caused of various strategic initiatives, like cost efficiency. Responding to weak domestic market, the CEO of Semen Indonesia, Hendi Prio Santoso, the company will expand the export sales to various countries, such as Australia, Bangladesh, Sri Lanka and China.
While, Indocement reported that cement sales throughout 2020 were around 16.5 MT of cement, 8 percent lower than the previous year. For this year, the producer targeting the sales growth around 4 percent. To reached the targets, the manufacturer looking Southeast Asian and other markets to increases the sales volume and prepared the factories and terminals.
The Salim Group’ unit plans to open a new export destination such as the Philippines, Brunei Darussalam, Malaysia and other neighboring countries. For this year, Indocement sees the national cement industry able to grow 5 percent in 2021 from last year contracted 10 percent.
“We made this (estimate) because we saw the infrastructure budget figure rises from Rp280 trillion (US$19.65 billion) to Rp414 trillion in this year,” said the president director, Christian Kartawijaya end of last year.
US$1: Rp14,400
Written by Editorial Staff, Email: theinsiderstories@gmail.com
