Cement Sales Seen Beating Forecast on Property, Infrastructure Boom
Faisal Maliki Baskoro. The Jakarta Globe, Jakarta - 07/11/2011
The country’s cement sales for this year may beat expectations, driven by property and infrastructure projects, according to an industry group.
The Indonesian Cement Association (ASI) said cement sales for 2011 may exceed two previous forecasts. In September, ASI had projected national sales to increase by 10 percent to 44 million tons from 2010. A forecast even earlier this year had put 2011 sales up by 6 percent.
“This year’s target will be exceeded slightly,” said Urip Timuryono, the association’s chairman. “I cannot give the precise number.”
Growing demand in property and infrastructure has helped boost sales, Urip said. Demand from the property sector accounted for about 70 percent of cement sales, with the remainder from infrastructure, he said.
Urip said despite slowing global economic growth and the debt problems affecting members of the euro zone, Indonesia’s economy remained resilient.
As part of Indonesia’s master plan for economic development, the MP3EI, the country has been investing in infrastructure projects such as seaports and toll roads to create jobs and spur growth.
“We have seen aggressive development in the property sector this year and a more aggressive development in infrastructure projects next, thanks in part to the government’s MP3EI,’’ Urip said. “Next year, if we can grow 10 percent, that would be good as we are faced with the global slowdown and euro zone crisis.”
Under the master plan, the government grouped the country into six regional economic development corridors with total projected investments of Rp 3.348 trillion ($374 million).
The plan is part of the country’s efforts to become the world’s 12th-largest economy by 2025. Last year, Indonesia was the world’s 17th-largest economy.
Some cement makers have announced expansion plans going forward, Urip said.
Germany’s HeidelbergCement plans to invest $500 million to build a plant in Pati, Central Java. State-owned Semen Gresik, the country’s largest cement maker, announced earlier that it was planning to build new plants.
Dwi Sutjipto, president director of Semen Gresik, said in September that the company was building two new plants, one in East Java and another in South Sulawesi. The two factories will have a combined annual production capacity of five million tons, Sutjipto said at the time.
Echoing Urip’s optimism, shares of Semen Gresik rose 2.2 percent to Rp 9,450 on the Indonesia Stock Exchange on Monday, while HeidelbergCement was up 2.9 percent to Rp 15,950.