Intensified expansion of cement production capacity in ASEAN and some countries in South Asia
Data from Indonesia Cement Association: In 2014, Indonesia's cement sales volume was 60 million tons, a year-on-year increase of 3.3%. Semen Indonesia has allocated US$480 million in capital expenditures for the construction of the Rembang and Padang plants during the year. This will increase the company's annual cement production capacity by 3.1 million tons. Semen Baturaja also plans to increase production, in part because of the addition of a new factory. By 2017, the company's annual cement production capacity will reach 38.5 million tons. In order to protect the healthy development of the industry, the Indonesian government will cut investment opportunities. At present, the country’s 77 million tons of cement production capacity is considered more than sufficient to meet domestic demand.
After prolonged political turmoil in 2014, the Thai military government has taken a series of measures in recent months to revitalize the economy, including martial law in some important areas, in order to promote tourism and promote public investment. Siam Cement optimistically forecasts that domestic cement demand will increase by 6% from the same period last year to 40 million tons. The company is looking for acquisition opportunities in Southeast Asia. At the same time, Siam City Cement PLC, Thailand’s second largest cement producer, announced in February that Holcim has decided to sell its 27.5% stake in the company.
According to reports from Vietnamese media, in 2014, 19.5 million tons of cement and clinker were exported nationwide. This year it is expected to export 25-20 million tons, and export to Indonesia, Malaysia, Bangladesh, Taiwan, the Philippines, Cambodia and Sri Lanka. The good news for Sri Lankan cement companies is that the new government budget proposal will remove tariffs on cement imported from Malaysia, Vietnam and Indonesia. The proposal will allow competition with cement imported from India and Pakistan. If Semen Indonesia and Myanmar’s local investors fail to reach a friendly agreement on investment and construction, Vietnam, Cambodia and Bangladesh will all likely become recipients of their investment and construction. The company allocates 50 million US dollars each year to support overseas plans. This year, the Myanmar economy is expected to grow by 7.7%. The cement industry welcomes the government's upgrade plan, including the expansion and construction of roads, bridges, ports, airports, hotels, shopping malls, apartments, hydroelectric dams, and factories. Although construction progress will slow before the November election, it is very likely that there will be a large investment plan after the election.
A report on India's cement industry released by the Indian Brand Rights Foundation shows that from now until 2019, the compound growth rate of the Indian market is about 8.96%. To meet the growing market demand, cement companies will increase cement production by 56 million tons in the next three years. Some major investors have plans to increase production capacity. For example, JSW plans to increase annual production capacity from 5 million tons to 30 million tons. UltraTech plans to build two grinding stations in Bihar and West Bengal. JSW Cement has planned to build a clinker plant with an annual capacity of 3 million tons in Chittapur.
In recent months, Pakistan’s cement production has increased by more than 6%, and it is expected that by June 2015, cement production will reach 36.6 million tons. Local media reported that demand from the private sector has grown strongly, which is one of the main reasons for the high national cement consumption. DG Khan Cement plans to build a new plant near the Hub with an annual output of 2 to 2.5 million tons, even though the country is trying to escape the power crisis and terrorism.
Steel use classification