Indonesian Cement - Further 2011 Gains Expected

BALI, Indonesia, June 21, 2011 /PRNewswire/ --

Domestic cement demand in the high-growth market of Indonesia is expected to continue advancing in 2011 thanks to a young population and an increased need for housing, according to Anton Gunawan, Chief Economist of Bank Danamon.

His comments were made during the keynote presentation given at Cemtech Asia 2011 international cement conference, currently underway at the Grand Hyatt Hotel, Bali, Indonesia.

During his opening presentation, Mr Gunawan was keen to centre his attention on regional and Indonesian economic developments and how such changes would impact cement demand.  "Southeast Asian economies will continue to perform well, except for Vietnam, which is still vulnerable owing to high inflation, a large current account and fiscal deficit," he highlighted.

In terms of Indonesia's economic outlook, he remains cautiously optimistic, stating that "Faster economic growth," would prevail, underpinned by "a still big informal sector and rising optimism - towards investment grade - in 2012." He also welcomed "more pro-poor social policies" in terms of education and health to combat "high poverty levels and under-employment rates."

Going forward, he said: "Indonesia's young population generates strong demand for new housing with government estimates indicative that 710,000 [housing units] are needed annually… Not surprisingly strong domestic cement consumption growth will continue in 2011 throughout most of Indonesia."

Indonesian Cement Association (ASI) chairman, Urip Timuryono, also remains confident of the local market's growth potential and during his presentation highlighted that domestic producers are determined to meet local requirements. "Cement demand nationwide would rise from 40Mt in 2010 to almost 55Mt by 2015. New cement capacity would add a further 25Mt of production output over that same timeframe, keeping the industry totally self-reliant," he said.

Last year, the Indonesian cement demand rose steadily to 40.78Mt in 2010 with the nine domestic producers achieving sales of 39.18Mt. Semen Gresik, which is 51 per cent government-owned, remains the country's leading producer with 19.7Mta of cement capacity followed closely by Indocement, part of HeidelbergCement, with 18.6Mta.

Speaking on behalf of the Cemtech Asia conference organisers, David Hargreaves was also delighted to report from Indonesia at a time when the country is clearly developing quickly as a major cement-consuming country.

"Indonesia has huge potential for growth given its population of close to 250m, a low per capita consumption of just 160kg and a present cement production base running close to its limits.

"It's also not surprising," Mr Hargreaves noted, "that a number of existing domestic players as well various industry newcomers look set to invest heavily in this dynamic cement market."

The event continues with a range of presentations on the vibrant Asian and ASEAN cement markets from leading industry experts, including representatives from Anhui Conch Kawasaki Engineering Corp, UltraTech Cement Lanka, PT Holcim Indonesia and Cemex Philippines.

Technical presentations, focussing on plant performance, cost reductions, optimisation and sustainability issues, will be supported by a dedicated technical workshop as well as an international exhibition featuring world-class equipment suppliers to the cement industry.

Note to editors: Cemtech is the leading global cement conference & exhibition organizer. Attracting cement specialists from 25 different countries, this international three-day conference and exhibition offers attendees the opportunity to study regional cement and construction markets, along with advances in cement production technology and latest methods for improving environmental performance. The next event will be held in Warsaw, Poland.

The following companies are exhibiting at the conference: Wieland Lufttechnik GmbH, Rockwell Automation, Ibau Hamburg, Opsis AB, Hazemag & EPR GmbH, Panalytical Asia Pacific Spectris Pte Ltd, Scantech International Pty, ABB, Iteca Socadei, Ramco Systems Pte Ltd, Cemengal S.A., Durag Process & Systems Technology GmbH.

For more information, please visit http://www.Cemtech.com/bali
David Hargreaves
Email: info@cemnet.com
Telephone: +44(0)1306-740-363