Table of Contents
This report profiles Indonesia's cement industry, discussing market trends through 2014 and outlook for 2015 and beyond. The report also highlights leading players in the sector including PT Semen Indonesia (Persero) Tbk, PT Indocement Tunggal Prakarsa Tbk and PT Holcim Indonesia Tbk.
The cement industry is one of the strategic industries of Indonesia. The industry is a feeder for several other core sectors like infrastructure, housing and construction, and hence it acts as one of the most important sectors of the economy. The industry went through a period of high growth during the last five years making Indonesia one of the the top 10 cement producing countries in the world.
Indonesian cement industry had a stable year in 2014 with both demand and production recording growth. Recent capacity expansion by major companies helped in raising the overall production, leading to a situation of excess supply in the domestic market.
However, 2015 might prove to be a tough year for the cement industry. During the first six months, both consumption and production saw year-on-year declines. Persistent high interest rates might pull down the economic growth, thus bringing down the consumption even further. Nevertheless, the industry is expected to revive from this temporary lull soon backed by the ever-growing housing demand.
o The cement industry went through a period of high growth during the last five years (2008-13), with domestic consumption growing at a CAGR of 12%. In FY14, it grew by 4%.
o The Indonesian construction and real estate sectors are booming, which in turn has increased the demand for cement. During 2008-13, the country's total designed capacity grew at a CAGR of 9%.
o As a result of growing domestic demand, the export market saw successive declines in the last few years. Total cement exports from Indonesia reduced from around 8MT in 2007 to less than 0.5MT in 2014.
o Large scale capacity addition during the last few years has accelerated domestic cement production. During 2010-13, domestic production grew at a CAGR of 13.8%. In FY14, it grew by 6.5% y/y.
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