Friday, 20 October 2017 | 01:09 WIB

Holcim Indonesia Estimates Cement Demand Growth of Only 2%

illustration: Holcim Indonesia (nuonline)

JAKARTA, NETRALNEWS.COM - The Indonesian Cement Association (ASI) projects that national cement demand will grow 5 percent throughout 2017. However, listed cement manufacturer Holcim Indonesia (SMCB.JK) is pessimistic that the target will be achieved.

"Looking at the current condition, we estimate only 2 percent," said Holcim Indonesia Board of Directors in public expose material submitted to the Indonesia Stock Exchange (IDX) on Friday (5/19).

The company said the condition is affected by some challenges that will still be faced by cement producers throughout the year.

"The challenges include uncertain economy, tightening market competition, and excess supply," directors said.

Quoting Indonesia CEM Analysis 2016-2020, Holcim's management explains that supply in the cement industry reaches 98.7 million tons in 2017. While assuming 5 percent growth, cement demand will only reach 69.1 million tons.

Meanwhile, the national cement production capacity in 2017 reaches 115.1 million tons per year. That is, there is an excess capacity of about 16.4 million tons in Indonesia's cement industry this year.