Indocement Optimistic About Cement Sales Growth in 2024

Indocement Tunggal Prakarsa (INTP), a leading cement manufacturer in Indonesia, has expressed optimism for the cement market in 2024, forecasting a 2% to 3% growth in national cement consumption. This positive outlook is attributed to several key factors, including the development of Indonesia's new capital city, Nusantara, which is expected to significantly drive demand for cement. The company's confidence is further bolstered by an increase in the government's infrastructure budget, a recovery in the country's economic growth rate to pre-pandemic levels, and controlled inflation rates, which are anticipated to support a conducive environment for cement sales.

In a strategic move to enhance its market position, INTP completed the acquisition of Grobogan Cement, adding an additional 1.5 million tons to its annual sales volume. This acquisition is part of INTP's broader strategy to expand its footprint and capitalize on market opportunities.

Despite the optimistic sales forecast, INTP remains cautious of external challenges that could impact the industry, including geopolitical tensions and potential political instability during the national leadership transition period. Nevertheless, the company reported a strong operational performance in the past year, with a 9% increase in cement sales volume in 2023 compared to the previous year, surpassing management's expectations.

For 2024, INTP has allocated a capital expenditure of between 1.2 to 1.5 trillion IDR, an increase from the previous year's expenditure, with funding sourced from internal cash reserves. This investment underscores INTP's commitment to strengthening its market presence and enhancing its production capabilities to meet the growing demand for cement in Indonesia.

Source: Shangbao Indonesia