DIGIVESTASI - The share prices of issuers in the cement production sector have decreased due to the stagnant cement industry. The share prices of SMGR plummeted 67%, INTP 55%, and SMBR 80% since the end of 2020 until now.  This price decline is in line with the cement industry facing a serious oversupply situation since the coronavirus disease (Covid-19) pandemic.

The development of the cement market in Indonesia in general continues to show growth. The capacity alone will reach 118.1 million tons by 2023. Furthermore, domestic demand will reach 64 million tons and the utilization rate will be 54.2%.

Domestic demand has not yet reached the pre-pandemic level of 70 million tons. The same goes for the utilization of 62.3%. 

High production capacity coupled with low utilization eventually became a concern for one member of the House of Representatives, André Rosiade. We don't need cement plants until 2030, he told CNBC Indonesia. He said the current situation is an oversupply of cement, estimated to grow 4%/year so there is no need to build new factories.
 

For example, in 2020, domestic and export cement sales only reached 71.78 million tons with a utilization rate of 61.7%. This means there is still production capacity of 45 million tons. ASI data also shows that Kalimantan's production capacity is also very redundant with a total of 10.3 million tons. Meanwhile, consumption is estimated at 3.9 million tons per year. Therefore, there is still a surplus of 6.4 million tons.
 

Data from the Indonesian Cement Association (ASI) shows that the domestic cement market increased by +3.6% (64,016,000 tons), with the bagged cement market increasing by +0.1% (45,436,000 tons) and the bulk cement market increasing by +13.3% (18,580,000 tons). Grobogan Cement volume has not been included in ASI 2023 data. 

Predictions of positive year-on-year growth have already begun to emerge as Grobogan Cement sales volumes have increased since the beginning of 2024.  The Indonesian Cement Association (ASI) has not yet announced the volume adjustment for fiscal year 2023. However, since Semen Grobogan's average monthly sales volume is around 0.11 million tons, the adjusted version has a slight increase of around 1% compared to the same period last year.

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