The cement market in Java dropped by -2.1% to 33.74 million tons in 2016 compared to 2015 of 34.45 million tons, due to a decrease in Jakarta (-10.6%), Banten (-9.2 %), and West Java (-6.3%). Central Java became the only area in Java that still recorded cement sales growth above 5%, exactly 6.2% to 7.79 million tons in 2016.
If domestic cement sales tend to be stagnant, it is different with exports. Clinker exports grew by 141.1 percent to 1.07 million tons in 2016 compared to 445 thousand tons in 2015, while cement exports fell slightly -5.8 percent to 528 thousand tons last year.
The Ministry of Industry estimates the surplus of cement supply in Indonesia in 2018 rose to 38% of the national capacity, tending to increase from 37% in 2016. According to the Director General of Chemical, Textile and Multifarious Industries of Ministry of Industry Achmad Sigit Dwiwahjono, the excess supply of cement occurred due to the growth of production capacity beyond domestic demand.
“Competition of cement industry will be tighter, considering the capacity of cement production in Indonesia in 2018 is estimated to reach 106.3 million tons, or more than 38% of the national demand of 66.2 million tons,” said Achmad Sigit, in Jakarta yesterday.
According to him, the estimated excess supply of cement in 2018 is higher than 2016. Last year, the production capacity of cement in Indonesia amounted to 95.5 million tons, or has exceeded domestic demand of 60 million tons. “So there is a difference of 35.5 million tons or 37% of capacity which is oversupply,” he explained.
Duniaindustri.com assessed the oversupply of cement occurred along with the incessant investment of new factory both from existing players and new players (new comer). Meanwhile, the growth of cement demand in Indonesia has slowed down due to the pressure of the national economic slowdown and the stagnation of the property and construction industry.
The surplus of cement supply is about 38% of 2018 capacity far enough from the 2015 position, which only oversupply 24% of the total national capacity, according to worldindustri.com calculations. (* / Editorial team 02)