Displaying items by tag: utilisation rate

The Indonesian Cement Association (ASI) has warned that cuts to the Nusantara Capital City project had reduced cement sales so far in 2025. Yet also this week the ASEAN Federation of Cement Manufacturers (AFCM) launched its 2035 AFCM Decarbonisation Roadmap. Here is a round-up of recent news from the cement sector in Indonesia.

ASI data shows that local cement sales volumes fell by 2.5% year-on-year to 51.9Mt in the first 10 months of 2025 from 53.2Mt in the same period in 2024. Cement production decreased by 5.6% to 52.9Mt. Lower demand was reported in Kalimantan and Java. However, it rose in Sumatra and Nusa, in part, due to road construction. Sadly, Sumatra has been badly affected by floods this week. National cement exports grew by over 20% to 1.1Mt. The ASI is currently hopeful that a government-backed home renovation programme might stimulate demand.

Graph 1: Domestic cement sales and exports in Indonesia, 2019 - 2025. Source: Indonesian Cement Association (ASI). Note: Figure estimated for 2025, exports include cement and clinker.

The general picture can be seen above in Graph 1. The local cement sector has generally had a capacity utilisation issue since the mid-2010s. Domestic sales started to catch up but the Covid-19 pandemic disrupted the market. Meanwhile, exports of cement and clinker have been steadily rising since 2014. These are dominated by clinker exports, with the single largest destination being Bangladesh. Other major targets include Taiwan and Australia. The country’s relatively low consumption of cement per capita suggests that the utilisation rate will grow over time.

The local production market is dominated by state-owned Semen Indonesia (SIG) (with a 48.5% share), followed by Indocement (29.1%), Conch Cement Indonesia (7.1%) and Cemindo Gemilang (6.6%). SIG’s sales volumes in the first nine months of 2025 roughly follow the general trend reported by the ASI with local sales down by 1.8% year-on-year to 27.5Mt and exports up by 25.3% to 5.1Mt. The group’s sales revenue and earnings before interest, taxation, depreciation and amortisation (EBITDA) dropped by 3.8% to US$1.52bn and 23.8% to US$198m respectively. Indocement’s revenue fell by a similar rate. Both companies anticipate a modest recovery in 2026.

Something to note from SIG’s financial results and related discussions in 2025 (and earlier) has been its approach to marketing and selling its cement brands in a highly competitive environment. It says it changes its brand mix in different regional locations with varying combinations of market leaders with premium pricing and so-called ‘fighting brands’ with competitive pricing. Yet, eco-brands received a mention in addition to the other two groups in the third quarter report analysts’ discussions suggesting an appetite for potentially lower-clinker cements in a developing market such as Indonesia.

This leads to the second Indonesia-related news story of the week: the 2035 AFCM Decarbonisation Roadmap. The plan intends to reduce net CO₂ emissions from the cement sector in the region by 16% to 190Mt/yr from 228Mt/yr in 2020. 58% of this reduction will be achieved through the use of alternative fuels, 33% via the use of low-carbon cements and 9% through the use of renewable energy sources. Work towards carbon capture, utilisation and/or storage (CCUS) is starting with the aim of supporting capture pilots in the region and planning towards CO₂ transport and storage networks. Similarly, the roadmap urges producers to identify and prepare to use new secondary cementitious materials such as calcined clay and construction and demolition waste.

The race between capacity building and market share has been a familiar one in coverage of the cement market in Indonesia in recent decades. Provided the main companies can endure the competition, it looks set to continue, while demographic trends indicate the need for continued investment. Otherwise more market consolidation is to be expected when the utilisation rate dips too low. What is new though are the higher levels of blended cements and the changes this brings to the market. This can be seen above in the marketing strategy of SIG and the regional decarbonisation strategy. Similar trends are happening everywhere but the effects on a highly competitive market could be pronounced. Particularly if those government-backed schemes that the sector anticipates promote it.

The Global CemFuels Asia Conference will take place on 2 - 3 February 2026 in Bangkok

India: India Ratings & Research forecasts that cement demand will grow by up to 9% in the 2024 financial year that started in April 2023, due to continued government infrastructure spending. Despite mounting inflation and a large number of capital expenditure projects in progress, it expects cement company profits to recover due to slowing increases in energy costs, according to the Press Trust of India. The current prediction for the 2024 financial year follows a growth estimate of 9% in the 2023 financial year.

The credit ratings agency warned that sector expansion projects will hold back cement production capacity utilisation rate below 70% in the 2024 financial year compared to 65% in the 2023 financial year. It forecasts that three-quarters of around 150Mt/yr of new production capacity is likely to be commissioned by the end of the 2025 financial year. However, as most of this new capacity will be grinding plants, the clinker utilisation rate is likely to remain high.

It added that it expects to see more industry merger and acquisition activity in the south of the country in the short-to-medium term.

Nepal: The Cement Manufacturers Association of Nepal (CMAN) recorded average capacity utilisation across the local cement sector below 30% following the start of a national coronavirus lockdown that started in late April 2021. Despite the end of the Clockdown over the summer, demand is currently low due to an economic slowdown, according to the Kathmandu Post newspaper. It reported that three or four of the country’s 64 cement plants have shut down.

CMAN president Dhruba Thapa said, “There is a huge gap in output and demand in the market currently. Nepal's cement industry has a production capacity of 22Mt/yr, and this will rise to 25Mt/yr in the 2022 financial year. Demand reached around 9Mt in the 2021 financial year."

India: Production capacity utilisation in the cement industry is expected to remain below 70% in the 2020 – 2021 financial year due to new plant projects in the next two years. Credit ratings agencies ICRA, India Ratings and Crisil all forecast relatively low demand for cement compared to a decade-high of 13% in the 2019 – 2020 period, according to the Press Trust of India. Cement production rose by 0.7% year-on-year in the first nine months of 2019 – 2020 period. However, production growth has hastened since then. The ratings agencies offer different outlooks on anticipated profits look forward.

Nigeria: Dangote Cement has published its first sustainability report following Global Reporting Initiative (GRI) standards. Key data from the report include a CO₂ emissions per tonne of cementitious material of 687kg CO₂/t across all operations. Its total CO₂ emissions were 16.4Mt. In 2017 it reported estimated total CO₂ emissions of 8.45Mt from its domestic operations. The cement producer had an energy consumption of 52M GJ 2018. It had a 49% production capacity utilisation rate at its Nigerian plants. The group said that it supported 37,000 direct, indirect and induced jobs in Nigeria.

India: Government data places the country’s cement production capacity utilisation rate at 59%. The local cement sector had a production capacity of 509Mt/yr and it produced 298Mt in 2018 from 143 integrated plants, 102 grinding plants, five standalone clinker plants and 62 mini plants. India has a cement consumption of 235kg/capita compared to the global average of 520kg/capita. The National Council for Cement and Building Materials with the cement section of Department for Promotion of Industry and Internal Trade released the information as part of the publication of ‘The Cement Industry – India 2018.’