Indonesia cement producers faced threat from new entrants after years compete in oligopoly market. What strategy they must do to channel their additional cement volume, having completed massive expansion projects in overcapacity market.. .

1. 1 Hans.Mohammad@gmail.com
Indonesia cement manufacturers, have enjoyed years of high margin due to high
domestic demand, limited production, natural barriers to entry (e.g.: strategic plant
locations), and capital intensive industry as well as “friendly competition” among
manufacturers.
Now the competition is intensifying. New manufacturers come on stream aggressively,
squeezing incumbents margin and market share. With additional capacity projects on
the pipeline and current domestic demand, manufacturers must think hard what to do
to secure margin and ROI. More importantly what to do to secure cement sales?
Market
Penetration
Product
Development
Diver-
sification
Market
Development
Existingproducts Newproducts
Existing
Market
New
Market
What manufacturers should
do to secure cement sales?
42%
3%
9%
1%
5%
12%
26%
3%
Cement Manufacturers
Market Share 2016 New Cement Manufacturers
2011 – 2016
Non ASI Members
ASI Members
4%
6%
41%
16%
31%
3%
Cement Manufacturers
Market Share 2011
1%
Hans.Mohammad@gmail.com
Sources: Indonesia Cement
Association (ASI), own analysis
Indonesia 2020f (in Million Mtpa)
Sumatra
21.6
17.8
Java
82.3
43.9
Bali
0.0
1.9
Nusa Tenggara Barat
0.0
1.4
Nusa Tenggara Timur
2.0
1.3
Papua
1.5
1.0
North Maluku
0.0
0.3
Maluku
0.0
0.4
Sulawesi
14.2
7.1
Kalimantan
4.9
5.2
Production Capacity
Consumption
Remarks: Semen Indonesia consist of: Semen
Gresik, Padang & Tonasa
Announced Expansion
Project Of Existing
Manufacturers 2016 to 2020
48
55 59 62 62
63 64
0
20
40
60
80
100
120
2011 2012 2013 2014 2015 2016 2017F
'MT
Installed Capacity
Production
Consumption
Indonesia’s Cement Supply – Demand 2011 – 2017F