Unfavourable weather conditions seem to have taken a toll on the Indonesian cement industry as the volumes showed a 2.5 per cent decline m-o-m in February 2014. The combined January-February volumes totaling 9.2 million tonnes, represented growth of only 1.3 per cent y-o-y compared to the same period in 2013 as per reports issued by the Indonesian Cement Association.
The industry may find it difficult to survive with the demand growing at the rate of 5.2 per cent y-o-y, much lower compared to 2012’s growth level of 14.5 per cent y-o-y and even 2013’s level of 5.6 per cent y-o-y.
Since Indonesia’s volume growth is driven by housing-related projects rather than infrastructure, a higher base interest rate set up by Bank Indonesia’s (BI) has impacted the market negatively.