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Indonesia cement: Two sides to a coin

The Indonesia Cement Association reported December 2015 domestic sales volumes of 5.5mnt (+1.5% y-y, -10% m-m), translating to a slight 2015 full-year sales increase of 0.9% y-y to 60.4mnt, or around 1% higher than our 2015 estimate.


In Dec-15, bulk cement sales accounted for 26.1% of total domestic sales (Dec-14: 22.5%), showing a strong demand pick-up for infrastructure projects. Nevertheless, amid weak domestic demand, Indonesian producers expanded exports by more than 2.5 times to slightly above 1mnt in 2015.
By region, we observed continued weakness in Java cement sales at 2.9mnt in Dec-15 (-2.2% y-y, -13.2% y-y), with lower sales in all regions except West Java (735k, +1.7% y-y) and Central Java (640k, +7.3% y-y).
On the flip side, Outer-Java’s Dec-15 sales grew to 2.6mnt (+5.9% y-y, -6.3% m-m), with the only decline in Kalimantan (370kt, -21.3% y-y). In 2015, Java (33.7mnt, -0.2% y-y) still contributed 55.7% of total domestic sales (2014: 56.3%), compared to Outer Java (26.7mnt, +2.2% y-y).


With greater competition in Java from the likes of SMCB, INTP booked a hefty sales decline to 1.4mnt in Dec-15 (-17% y-y, -14.9% m-m), which also brought down its Dec-15 market share to 25.8% (Dec-14: 31.5%).

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