Cement Sales Rise as Companies Rush To Finish Projects Before Idul Fitri
Jakarta. Cement manufacturers recorded their highest sales for the year in May, thanks to rising demand for infrastructure projects in Java, Kalimantan and Sulawesi.
Domestic cement sales reached 5.1 million metric tons in May, up 6.2 percent from the same month last year, data from Indonesia Cement Association showed on Thursday (09/06).
Cement sales in Kalimantan rose 11 percent to 377,000 metric tons while Sulawesi used 414,000 metric tons, up 16 percent from a year earlier.
Sales in Sumatra passed 1 million metric tons for the first time in history, growing by 4.9 percent from the same month last year.
Java remained the largest cement market, with 2.9 million metric tons of the building material bought during the month.
"Considering the property market remains weak, infrastructure would be the main catalyst for cement sales, particularly with some projects being targeted to finish before [the Idul Fitri] holiday," Sebastian Tobing, an analyst at Trimegah Securities, said.
Cement manufacturers sold 24 million metric tons in the first five months of this year, up 3.9 percent from the same period last year.
But the growth is not good news for established manufacturers, whose sales and market share have declined amid heightened competition from new players.
State-controlled Semen Indonesia, the country's largest cement maker, saw its market share drop to 40 percent in May, as sales growth trailed the industry's pace.
The company sold 10.2 million metric tons in the first five months of the year, a meager 0.5 percent increase from the same period last year.
Its rival, Indocement Tunggal Prakarsa, Indonesia's second largest cement maker, also saw its sales shrink 1.4 percent to 6.6 million tons in that period.
ASI chairman Widodo Santoso said the country's cement industry was dealing with the industry's underutilized capacity.
The total cement manufacturing capacity is 92 million metric tons this year, thanks to six new plants that begun operation this year.
"On the other hand, demand, at 65 million tons, was far lower than that," Widodo said.
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