UBM on Indonesia’s cement industry : Exports growing in a challenged environment

1

JAKARTA (TheInsiderStories) Cements exports in the first 7 months of 2016 have risen by 63 percent (y/y). The rapidly increasing exports are a much needed balm to counter the nation’s cement oversupply caused by new entrants and the production expansion of existing cement players in a landscape of stagnant domestic consumption.

This year, six new cement factories were opened with a total combined annual production capacity of 14 million tons. As such, the country’s total installed capacity has reached about 92 million tons, whereas demand in 2016 is expected to remain at around 65 million tons.

A second challenge that can turn into an opportunity is the fact that the cement industry is one of the world’s most polluting: it accounts for 5 percent of man-made carbon-dioxide emissions each year.

Producing it implies vast amounts of energy and water. While almost all the remaining pollution comes from the burning of fossil fuels to heat the kiln. Cement producers have not yet attracted much of the attention of environmental campaigners. But that can change fast and pose a threat to the existing business. Therefore firms should start thinking about solutions now. Going green could also save money, as a recent article on The Economist explained (“Cracks in the Surface – Why grey firms will have to go green” – The Economist, August 27th).

As reported, some cement giants are at last taking action. LafargeHolcim already uses an internal carbon price of $32 per tonne; Heidelberg works with one of $23. In a changing regulatory and political environment, investors may pull out of companies lagging behind. (*)

 

The post UBM on Indonesia’s cement industry : Exports growing in a challenged environment appeared first on The Insider Stories.

Source: The Insiderstories
UBM on Indonesia’s cement industry : Exports growing in a challenged environment

You might also like More from author

Comments are closed, but trackbacks and pingbacks are open.