In the midst of declining purchasing power due to the global crisis, government projects become a mainstay and supporter of the performance of the national cement industry. Indonesian Cement Association (ASI) reported that there was a slight increase in cement consumption nationwide. Widodo Santoso, Chairman of ASI, in Jakarta, on Monday (September 14), said that the sugar in consumption indicates the beginning of the movement of development of infrastructure, housing, apartments, as well as disbursement of development budget of local government.
Widodo pointed out that the rise of consumption in August occurred because there were no holidays compared to the previous month. In addition, the disbursement of government funds is evident in cement demand in South Sulawesi, Lampung, Jambi, Banten, West-java, South-West Sulawesi, Bali and West Nusa Tenggara which on average increased above 20%.
ASI expects that consumption in September and December continue to increase to improve annual performance. According to him, if infrastructure projects and development budget in the regions are running quickly and according to government’s target, annual cement consumption may rise 4% to 6%, so that consumption through 2015 could be higher than last year.
The consistency of increase of cement consumption, he added, is required along whit the operation of a number of cement plants that have been operating in August with a capacity of 1.7 million tons, will then be followed by Bima semen with a capacity of 1.5 million tons, Semen Merah Putih with a capacity of 3.6 million tons, and Siam semen with a capacity of 1.7 million tons per year. Therefore, he continued, the domestic cement manufacturers expect infrastructure construction to run properly due to the decrease in development realization that would harm employers. While on the hand, export markets have not shown an increase in demand.
ASI expects that the national cement industry is likely to grow 12% this year in line with increasing domestic consumption, which is predicted to reach 54 million tons. Acceleration of the development of infrastructure and property, as well as increased government spending is believed to be the motor of growth of the domestic cement industry.
With the star of production of some new cement factories this years, Widodo is optimistic that there will be no shortage of supply of cement in the country. Local cement manufacturers will not export cement before domestic demand is safe. The reason, he added, is that profit in the domestic market is better than in the export in the market due to high transportation costs. ̋It does not mean that cement prices abroad is cheap, just the same, but when coupled with cost of transportations, the costs become higher,” he explained.
Quoting data of ASI, in August cement consumption in Sumatera reached 1.15 million tons, increased 21.4% from the same month last year. Cement consumption in Java reached 3.04 million tons, an increase of 14.9%. In addition, the consumption of cement in Sulawesi last month reached 400.000 tons, up 8.1%, in Bali and Nusa Tenggara 310.000 tons, up 14.5%, in Maluku and Papua 99,000 tons, up 11.2%.
The lowest consumption is in Kalimantan which only reached 370,000 tons. an increase of 2.6%. This, the overall consumption in August 2015 year reached 5.34% million tons or 14.7% higher than last year. From January to August 2015, cement consumption reached 37.26% million tons or – 0.3% compared to the same period last year. (E)
Business New - September 16, 2015