2008-2009 DATA CONSULT. All rights reserved.
April  2012



The country's cement industry has expanded  from year to year to follow the trend in the development of the property  and infrastructure sector. The largest consumers of cement in the country  are the housing sector.

In  2011, the country's cement  production grew 14.4 percent to 45.2 million  tons  from 39.5 million  tons in 2010. The  production capacity   was recorded at 56,8 million  tons per year  in  2011  or an increase of t 7.2%  from 53 million  tons per year in the previous year.

A number of cement producers  are seeking to expand their capacity as some of the have been operating almost at full capacity. In addition, demand for cement is expected to continue to grow in the coming years. PT Indocement Tunggal Prakarsa expanded its production capacity  by  2.5 million  tons  to 21.1 million  tons per year  in  2011. PT. Semen Gresik increased its production capacity  by 600,000 tons  to 9.7 million  tons per year.

The capacity expansion is to keep pace with growing market demand to follow the economic growth and brisker  development. In addition some old  and inefficient factories need revitalization by replacing machines.  Expansion of capacity would  improve operation efficiency  and make factories more competitive in the market.

Small producers like  Semen Kupang, Semen Baturaja,  and  Semen Bosowa seek to steal a market share in area not covered by  big producers such as in eastern Indonesia. Big producers still concentrate in western part of the country mainly in Java which accounts for 55.2 percent of cement consumption in the country. Sumatra is the second largest market of cement  accounting for  23 percent,  followed Sulawesi  and  Kalimantan each accounting for 7% of the total consumption.

A number of factors are also considered by  investors  in building cement factories like the distance of location from market, transport facility and availability of energy  or fuel.

Energy is an important factor as energy makes up a considerable part of the production cost. Currently many investors seek to use cheap secondary  energy to fuel cement factories.

Currently a critical factor  considered in capacity expansion by cement producers is the availability  and the price of  coal fuel. Cola has been the main fuel for cement factories. Investors or cement producers have asked the government guarantee in coal supply before building new factories . The country is one of the world's largest coal producers but most of its coal production has been exported as the prices are better in international market. In addition many producers have been bound by long term contracts  with coal buyers abroad.


There are several types of cement produced in Indonesia. The main type is OPC (Ordinary Portland Cement) or Portland Cement Type I which accounts for 80 percent of the country's total production. Other types include composite  and pozzolan cement.


Based on data at the Indonesian Cement Association (ASI), the country's   production capacity increased 10.5% to 53 million tons  in  2010  from 47.9 million tons in the previous year. The increase came from five producers expanding their production capacity with an investment of US$ 645.6 million. The new production facilities on line in 2011 included a cement mill of Indocement  in  Cirebon with a capacity of 1.5 million  tons, and reconstruction of the 2004's  tsunami destroyed factory of Semen Andalas  with a capacity 1.6 million  tons in Aceh.

The capacity utilization of the country's cement industry averaged 79.6% in 2011. Privately owned cement factories now are largest in production capacity compared to factories of state companies. They account for 60.5% of the total capacity   with state companies having only 39.5% of the total capacity.

In  2011, the country's  production capacity  rose again to 56.8 million  tons  or an increase of  7.2%. The additional capacity  followed expansion by a number of large producers  including   France's.Lafarge  which built a new factory  of PT. Semen Andalas in Lok Nga, Mangrove Aceh Darussalam which came on stream in  March 2011 to replace one destroyed by the tsunami in 2004.

Lafarge invested US$300 million  to build the new  factory  with a capacity of 1.6 million  tons per year. The factory needs 1.2 million tons of clinker per year.

In 2012, the country's production  capacity is expected to rise 6.8 million  tons  to 63.6 million  tons with the construction of new factories by PT Semen Gresik Indonesia, PT Semen Tonsasa,  and  PT Holcim Indonesia.

The industry ministry has required cement factories to reduce the use of clinker cutting the content from 90% to 80%  to be more energy efficient but not reducing the quality to be low SNI.


PT. Semen Gresik, Tbk (PT. SG)

PT. SG has 3 factories located in Tuban  and Gresik  with a  production capacity  of  9.7 million  tons per year. PT. SG has two ports special for cement  in Tuban  and in  Gresik, 1 unit of cement packing plant  in Ciwandan, Banten  and 11 units of buffer warehouse Java and Bali . In 2011 cement production  PT. SG  reached  9.7 million  tons.

PT. SG acquired PT. Semen Padang (SP)  and  PT. Semen Tonsasa (ST) in  1995  to join in the Semen Gresik Group (SGG)  with 99.9% owned by SG.

SP is located in Indarung Padang, West Sumatra  supplying cement mainly for Sumatra. It also supplies cement for Java and exports part of its production mainly to other Asian countries. SP has six cement packing plants in Padang, Medan, Banda Aceh, Batam, Jakarta  and Banten. SP also has 14 buffer warehouses a special cement port in Padang's Teluk Bayur, and in Ciwandan of  Banten.

SP produces various types of cement including Ordinary Portland Cement (OPC), Portland Pozzoloan Cement (PPC), Portland Composite Cement (PCC) , Oil well Cement (OC) and  Super Masonry Cement (SMC).

In  2011, its  production  totaled 6.2 million  tons  or an increase of  8.7%  from 5.7 million  tons in 2010.

ST located in Pangkep  of South  Sulawesi has three units of factories  producing the types of OPC  and  PPC. ST is the largest supplier of cement in eastern Indonesia  including Sulawesi, Kalimantan,  Nusa Tenggara  and Maluku, Papua. ST has 8 units of packing plant in Makassar, Bitung, Samarinda, Palu, Banjarmasin, Ambon  and  Bali  and 5 units of buffer warehouse. ST also has cement special port in Biringkassi.

Currently the total production capacity of SGG is 20.6 million tons per year including PT. Semen Gresik (9.7 million  tons), PT. Semen Padang (6.3 million  tons) and  PT. Semen Tonsasa (4.6 million  tons).

In  2011,  PT. SG set aside US$ 533 million for capital expenditure. The fund has been used to build a new factories  in Tuban, East Java  and other factories  as well as a power plant in Tonsasa, South Sulawesi.

In 2012,  PT. SG sets aside Rp5 trillion for capital spending. Around 20% of     the fund  would be used  to finance the construction of a new factory in Sumatra to cost Rp7 trillion to be disbursed in three years of construction. The construction of the new factory  will 70% financed with a bank loan.

Cemex shares sold to  Blue Valley Pte. Ltd.

A conflict between the government and CEMEX as co-shareholders of PT SG ended with Cemex selling its 24.9 percent stake in SG to  the  Rajawali Group  through its investment vehicle company  Blue Valley Pte. Ltd. at a price of      US$ 337 million.

The  Rajawali Group, which is owned by tycoon Peter Sondakh acquired the stake after the government said it would not use its right to acquire the stake under conditional sale and purchase agreement/CSPA) signed on 17 September 1998.

Under the agreement co shareholder  was the first to receive the offer to buy  shares for sales.

With the deal, Cemex also agreed to drop its lawsuit  filed with an international arbitrage court against the government.

Currently PT. SG  is 51.01 percent owned by the government  , 24.0% by Blue Valley Hodings Pte  and 24.09 percent by the public.

PT Holcim Indonesia Tbk

PT. Holcim Indonesia Tbk (HI)  was, formerly known with the name of PT. Semen Cibinong. Holcim acquired 77.33 percent of PT. Semen Cibinong in 2001. Its name was changed on 1 January 2006. HI has two factories  -- one in Narogong  and another in  Cilacap.

Holcim is the world's largest cement producer based in Switzerland. It has stakes in cement factories in 70 countries in the world.

In  2011,  HI operated a new factory in  Tuban, East Java  with a production capacity  of  1.7 million  tons per year built with an investment of US$ 450 million . 
The cement  production capacity of HI  increased to 8.7 million  tons in  2011 from 8.3 million  tons  in 2010. Its  production  totaled 7.1 million  tons in  2011,  and most or 64% of the production is disposed of on the domestic market  with 36% for exports.

PT. Indocement Tunggal Prakarsa, Tbk (PT. ITP)

PT. ITP  was established  in 1985 by the Salim Group. In 2001, Heidelberg Cement Group from Germany acquired the majority 65.14 percent stake  through its subsidiary Kimmeridge Enterprise Pte. Ltd. In  2003,  Kimmeridge Enterprise Pte. Ltd transferred the shares of PT. ITP  to HC Indocement GmbH. In September 2006, HC Indocement GmbH was merged into Heidelberg Cement South-East Asia GmbH which became the owner of PT. ITP. 

ITP operates  9 factories in  Citeureup, Bogor, the second largest unit of factories in the world, 2 factories in  Palimanan, Cirebon, West Java and  1 factory in  Tarjun, Kotabaru, South Kalimantan.  ITP produces various types of cement including PCC, OPC, OWC  and White cement. ITP is the only producer of white cement in the country.

By the end of  2010, the clinker production capacity of the company was 15.6 million  tons per year   and its cement production capacity was 18.6 million  tons per year. The operation of  new units of cement mill in Palimanan  and Citeureup in  2011,  brought the total  production capacity  of the company to 21.1 million  tons per year. 

In  2008, Heidelberg Cement AG handed over its entire stake in ITP to Birchwood Omnia Ltd. Therefore, shareholders of IPT now include Birchwood Omnia Ltd (51%), PT. Mekar Perkasa (13.03%) investing public (35.97%).

PT. Lafarge Cement Indonesia

It was formerly named PT. Semen Andalas Indonesia, before it was destroyed by tsunami late 2004. In  2007, a replacement was built for its factory. During the time that it  could not produce  cement it imported cement from Lafarge unit in Malaysia to supply cement in Aceh and North Sumatra,  to maintain its market foothold in  northern Sumatra.
In 2010, PT SA resumed operation  and its name was changed with PT Lafarge Cement Indonesia.

In 2011 the clinker production capacity of the company was 1.2 million  tons/year and cement production capacity was 1.6 million  tons/year.

PT Semen Bosowa Maros (PT. SBM)

The factory of the company was built in 1995 and c came on stream in April 1999.  PT. SBM  is owned by  local tycoon Aksa Mahmud.

In  2007,  PT. SBM completed the construction of a packing plant  in  Samarinda,  East Kalimantan.

By 2011, the clinker  production capacity of the company rose to 1.8 million  tons per year from 1.71 million tons per year in the previous year. Its cement production capacity  also rose  from 1.8 million  tons  to 3 million  tons per year. The production capacity  includes those of Semen Bosowa Maros 1.8 million  tons  and  Semen Bosowa Batam 1.2 million  tons.

In  2011, the  cement  production  of  PT SBM totaled 1.9 million  tons.  The main market of cement  production of  PT. BSM is eastern Indonesia .

PT Semen Kupang (PT. SK)

PT. SK is a state company coming on line in 1984 in  Kupang, East Nusa Tenggara. In  2011, its clinker production capacity was 300,000 tons per year,  and cement production capacity was 570,000 tons per year. PT. SK  is wholly owned by the government .

PT. SK has been outdated in technology  that it is no longer competitive and efficient . The company  then built a new second factory , but  it  still could not operate efficiently. The company, therefore, was facing financial problem and was forced to stop operation.  By the end of 2007,  PT. SK resumed operation  with financial injection from the state budget  of Rp 50 billion. The fund was used as working capital  and to buy new spare part for the new factory Semen Kupang II  and to pay for coal fuel  from Kalimantan. The main market of PT. SK is East Nusa Tenggara.

PT Semen Baturaja (PT. SB)

PT. SB is wholly owned by the government . PT SB is located in Kota Baturaja, South Sumatra having three packing plants in Ogan Komering Ulu (OKU), Tarahan (Lampung),  and  Kertapati, Palembang.

In 2011, the  production capacity of   PT. SB  was 1.250 million  tons of clinker  per year  and 1.2 million  tons  of cement per year.

PT. SB produces Portland I with the brand of Semen Tiga Gajah. The basic material is abundantly available in Baturaja. Its main markets are southern Sumatra including South Sumatra, Lampung, Jambi and  Bengkulu  and   Banten in Java.

SB plans to sell 30% of its share  through initial public offering (IPO). It hopes    to raise Rp1 trillion from the share sales  planned in 2013. The fund will be   used to build a new factory South  Sumatra with a  production capacity of 1.5 million  tons per year. The new factory is to maintain its market foothold. It hopes to maintain its market share of 29% in the region in 2013.  The new factory will need an investment of Rp 2.35 trillion  which will include Rp1.3 trillion in loan.

The company also built  a new cement mill  with a capacity of  300,000 tons per year to cost around  Rp 325  billion. The new mill built  in its complex in Baturaja came on line in 2011.


Cement factories need large supply of energy  in the process of production. Energy makes up 40%-50% of its production cost  including for heating and power plant. Currently most  cement plants use coal for fuel. Coal consumption  in the country, therefore, has increased rapidly. Lately some cement factories begin to use charcoal  or husk  for fuel.

Coal consumption by  cement industry in the country  2011  totaled 7.6 million  tons. The consumption is forecast to rise again  in the coming years with       more cement producers planning expansion of production capacity. In 2010,  there were five cement producers coming in line or expanding capacity including PT. Semen Andalas Indonesia, PT Semen Padang, PT Indocement Tunggal Prakarsa Tbk, PT Semen Gresik and  PT Semen Tonsasa, which is expanding capacity and building  new factory with an investment of US$ 645.6 million to be operational in 2012.

Most of the new factories will be built outside Java . The problem outside Java is shortage in power supply forcing cement factories to build their own power plants to guarantee power supply.

SG for example needed coal for 10 coal-fired power plants  with a total capacity of 410 Megawatts (MW) operational  in 2011. The power plants are needed to support its plan to expand capacity  until  2012. In  2012 the production capacity  of  SGG  will be increased to 23.9 million  tons.

SG has established a subsidiary PT SGG Energi Prima to be in charge of coal procurement for its cement  factories.

The entire factories  of Semen Gresik Group  needed  4.2 million  tons of coal in  2011. This year the requirement  is predicted to rise  with the growing number of its factories including new ones in Tuban  and  Tonasa, Pangkep, South  Sulawesi.

In long term the country's cement industry will increase  the capacity of  its power plants to  200 MW to support capacity expansion  by 14.5 million  tons,  from  44.89 million  tons to  59.39 million  tons in a 2015.

Indonesia has one of the largest coal reserves in the world that cement producers should not worry about coal supply in the future, but most of the country's coal production have been exported resulti8ng in constraint in coal supply in the country.  In 2010, the country's coal production  totaled 275.2 million  tons,  and 188 million  tons of which were exported . In 2011 the coal production  rose to 290  million  tons, but supply on the domestic market was still short of requirement.


The country's cement production  has continued to increase - reaching 45.2 million  tons in  2011, up from 39.5 million  tons  in the previous year  or an increase of 14.4%. 

The global crisis since late 2008, resulted in weak demand for cement in export market. Indonesia has exported cement to Srilanka, Bangladesh, Maroco, Madagascar and Middle East. Indonesian producers compete sharply in international market such as with Thai producers.

In  2012, the country's cement  production is forecast to reach 60 million  tons with additional production from a number of new factories.........

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