Indonesian Cement Sales Below Target in 2014 Amid Elections

JANUARY 09, 2015

Jakarta. Indonesia’s cement sales last year were below target, dragged down by negative sentiment on uncertainty amid the presidential and legislative elections.

Cement sales in Southeast Asia’s largest economy grew by 3.3 percent to 59.9 million metric tons last year, according to data by the Indonesian Cement Association (ASI) published on Thursday.

The association had targeted sales growth at between 3.5 percent and 4 percent last year — a prediction that was a revision of the association’s initial target of 6 percent — since the elections and a persistent decline in commodity prices had weakened sales. Construction projects were delayed pending the outcome of the elections, in which Joko Widodo narrowly beat rival candidate Prabowo Subianto to become the country’s seventh president.

“The postponement of several infrastructure projects, such as toll roads, also contributed to the decline in national cement consumption,” ASI chairman Widodo Santoso said on Thursday.

However, he noted that cement consumption in Indonesia remained the highest compared to other countries that make up the 10-member Association of Southeast Asian Nations.

“Hopefully, the new government can speed up growth of the infrastructure projects. That way, our domestic cement consumption can jump back to a range of 5 percent to 6 percent,” he added, citing several government-led projects such as the new toll roads in Sumatra and Sulawesi.

Cement sales, as well as motorcycle and car sales, are a leading economic indicator for Indonesia.\

Investor Daily