Cement industry targets growth through exports and domestic projects
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Kontan Online Industri semen bidik pertumbuhan melalui ekspor dan proyek dalam negeri
2 February 2025
By Filemon Agung
The national cement industry is targeting sales growth this year by strengthening the export market and focusing on domestic construction projects.
Indonesia Cement Association (ICA) Chairperson Lilik Unggul Raharjo mentioned that the cement industry will continue to face the challenge of low utilisation this year. However, considering the domestic cement sales trend, growth is still deemed feasible.
"We remain optimistic about domestic cement sales growing by 1%-2% in 2025, while exports are predicted to remain consistent with previous years' figures," Lilik revealed on Sunday (2/2).
Lilik explained that factors encouraging domestic cement sales include the Three Million Houses Programme initiated by the government. The ICA forecasts that cement sales this year will reach 77 million tonnes, with a utilisation rate of 65%.
He stated that the national cement industry saw a decline at the end of 2024 compared to 2023. Domestic cement sales fell by 0.9%, with the demand for bagged cement and bulk cement in Indonesia in 2024 being 69% and 31%, respectively.
Meanwhile, the consumption of bagged cement decreased by 3.1%, while bulk cement consumption increased by 4.4%. The industry's utilisation rate reached 56.5%, which is slightly higher than in 2023 due to increased exports. However, it remains lower than the utilisation rate in 2019, before the pandemic.
The installed capacity of the national cement industry has now reached 119.9 million tonnes per year. In 2024, domestic cement sales volume was 64.9 million tonnes, which is 0.9% lower than the 65.5 million tonnes sold in 2023. Meanwhile, exports increased by 10.4% to 11.9 million tonnes.
“The decline in cement sales is due to weakening purchasing power. Additionally, the construction sector is slowing down because of reduced cement demand from government projects in Java and other regions, such as the construction of Nusantara Capital City in East Kalimantan,” Lilik explained.
According to ICA data, several major cement markets, such as Java, have started to decline by 0.1% this year, with the volume reaching 33.5 million tonnes, almost the same as in 2023. Meanwhile, in 2024, the Kalimantan market still grew by 11.2%, although this is lower than the 22.1% growth seen in 2023. This slowdown is due to the government's policy to reduce the budget for infrastructure projects in Nusantara Capital City, leading to decreased construction activity.
In 2024, Bali and Nusa Tenggara experienced a growth of 3.3% compared to 2023, with cement sales in Bali increasing by 15.8% due to ongoing support projects in the tourism sector. In contrast, other regions such as Sumatra, Sulawesi, Maluku, and Papua generally saw a decline.
Meanwhile, the export market is expected to remain stable despite last year's global economic slowdown. Indonesian cement products continue to rely on traditional markets such as Bangladesh, Australia, and Taiwan.
By the end of 2024, the total export of cement and clinker grew by 10.4%, reaching a volume of 11.9 million tonnes. This growth was driven by high demand for clinker in traditional foreign markets.
Taufiek Bawazier, Director General of the Chemical, Pharmaceutical, and Textile Industry at the Ministry of Industry, stated that limiting new investments is a way for the state to support and maintain the existing cement industry.
“This is a way for the state to protect the existing industry, but it does not eliminate the opportunity to expand production into new areas,” Taufiek said during a hearing with the House of Representatives (DPR) Commission VII on Thursday (23/1).
Nadi Astuti, Director of the Cement, Ceramics, and Non-Metallic Mineral Processing Industry, explained that the moratorium on investment in new cement factories has so far been implemented through foreign investment.
“Meanwhile, for PMDN, since permit verification is conducted regionally, new investment is still possible. In the future, we propose that the limitation of investment in the cement industry be outlined in a regulation,” Putu revealed during the occasion.
Putu explained that this proposal will be included in the draft revision of Presidential Regulation Number 49 of 2021.
“The limitations will be implemented in Sumatra, Java, Kalimantan, and Sulawesi, as these areas already have a cement industry. Investments can be made in islands without a cement industry, such as Papua and Maluku,” Putu explained.
Putu explained that another option the Industry Ministry will pursue is to boost the export potential of cement and cement-derivative products.
Therefore, the Industry Ministry is currently identifying cement products. According to the report obtained by the Ministry, there are still import activities for cement products.
“We have also received information that several cement products are being imported. Once imports are halted, the use of domestic cement can automatically increase, thereby enhancing the performance of the cement product industry,” Putu added.
Contact us
