Indonesia’s GDP grew by a robust 6.2% in 2012, driven by strong domestic consumption and investment. The Indonesian cement industry also witnessed high growth in capacity, consumption as well as production of cement. The country is the second-largest consumer of cement in ASEAN, with total cement consumption of 55mn tonnes by year end. However, it still lags behind its peers in terms of per-capita consumption.
Total cement production reached 52mn tonnes in 2012 while designed capacity grew to 60mn tonnes. Annual cement consumption grew by 14.5% in 2012 backed by strong demand from the housing and construction sectors. To cash in on this rising demand, leading cement companies have charted out aggressive expansion plans. As such, the country’s total designed capacity is expected to increase to 80mn tonnes by 2015.
The first five months of FY13 also reflected a similar trend with growth in both consumption and production of cement. However, cement consumption was disproportional to cement production in this period, highlighting the huge demand for cement in the country. Cement consumption touched 22.9mn tonnes in the January-May period while production lagged behind at 21.8mn tonnes.
The industry is dominated by three players who represent over 85% of total cement sales: Semen Indonesia, Indocement and Holcim Indonesia. The outlook for the Indonesian cement industry is positive, attributed to strong economic prospects as well as low current consumption per capita.
Key Findings
- Indonesia’s domestic cement consumption grew by 14.5% to 55mn tonnes in 2012, making it the second-largest cement industry in the ASEAN region.
- Total designed capacity is expected to reach 80mn tonnes by 2015 in line with demand growth, up from the current 60mn tonnes.
- Total cement exports have declined significantly over the last few years owing to a surge in domestic demand. In 2012, total exports plunged 84%.
- Semen Indonesia is the leader in terms of sales, designed capacity and production. In 2012, the company had a 41% domestic market share based on sales volume. It was followed by Indocement and Holcim with a share of 32% and 15%, respectively.
Much more in the EMD report: Indonesia Cement Industry>>
Filed under: Asia, Cement, Indonesia, Industry
