Indonesia: domestic cement consumption 2023

In the third quarter of 2023, approximately 46.42 million metric tons of cement were used in Indonesia. Consumption of building materials, particularly cement, is driven by the current government’s program to improve Indonesia’s basic infrastructure such as roads, airports, and seaports across the nation. The COVID-19 crisis has, however, put a stop to some of Indonesia's infrastructure-building initiatives, thus reducing domestic cement consumption during that period.

Indonesia’s massive infrastructure agenda

For the past decades, Indonesia’s infrastructure development has been focused on Java Island, its most populous island and the location of its current capital city, Jakarta. In 2022, the value of total construction completed in Jakarta was nearly forty times more than in Bali and over thirty times more than in Papua, showing a huge infrastructure gap. Aiming to reduce the development inequality across the archipelago, President Joko Widodo increased Indonesia’s infrastructure budget significantly since 2014. One of the government's ongoing infrastructure projects is the construction of Indonesia's Capital City of Nusantara to replace Jakarta as its national capital. The government estimated that Nusantara would be ready to be occupied and inaugurated in 2024.

More production, more capacity

Until April 2022, Indonesia has succeeded in building 1,900 kilometers of toll roads— far more than the construction in the last 40 years, which was only 780 kilometers. Following the government’s expansive infrastructure agenda, Indonesia's cement producers, such as Indocement and Semen Indonesia, have boosted their annual production in the past few years. In 2019, Indonesia’s largest cement producer, state-owned Semen Indonesia, increased its annual cement production capacity by around 40 percent, and it was increased again in 2022. As a result, Indonesia ranked as the eighth largest cement-producing nation in the world in 2023.