Indocement Company Presentation Q2 2017
INDOCEMENT
Indonesia Macroeconomic Overview
INDOCEMENT
World Bank anticipates Indonesia’s economy to grow by 5.3% in 2017 and 5.5% in 2018
and 2019 supported by resilient domestic demand and improvement in private investment
IMF: In 2017, growth is expected to rise modestly to 5.1%, led by a gradual pickup in
private investment in response to stronger commodity prices, low interest rates, and a
recovery in external demand on the back of a pickup in global growth and trade
Bank Indonesia reaffirmed its estimate of 5.0% - 5.4% growth rate in the economy for
2017
Overall, we see the cautious early signs of green shoots – where Consumer Confidence
Index remain robust at the end of Q2 2017 with income boosted by Tunjangan Hari Raya,
end of elections, S&P rating upgrade for Indonesia (the last of the three key credit ratings
agencies to give investment grade status).
%
Gross Domestic Product
Source: Indonesia Statistic
Slide 2 - August 2017
Q2 Results - Indocement
Indonesian Cement Industry 2017 Landscape
Lafarge Indonesia
1.5 mio ton
0.2 mio ton (g)
Semen Bosowa
4.4 mio ton
3.0 mio ton (g)
Anhui Conch
4.5 mio ton
Indocement
24.9 mio ton
Semen Indonesia
7.2 mio ton
0.9 mio ton (g)
Semen Baturaja
2.2 mio ton
0.7 mio ton (g)
Merah Putih
4.9 mio ton
2.8 mio ton (g)
Siam Cement
1.8 mio ton
Holcim Indonesia
12.1 mio ton
INDOCEMENT
Semen Indonesia
7.4 mio ton
Semen Indonesia
15.2 mio ton
0.7 mio ton (g)
Semen Kupang/Merah Putih
0.4 mio ton
Semen Puger
0.5 mio ton
Jui Shin
1.8 mio ton
Anhui Conch
2.2 mio ton (g)
Slide 3 - August 2017 Source: ASI and internal estimation
Q2 Results - Indocement
Panasia
1.8 mio ton
Total Cement Capacity in 2017 of 103.8* mio tons,
from 98.5 mio tons in 2016
* Total capacity in 2017 includes Finished Mills from Hao Han (0.6 mt), Semen
Jakarta (1.5 mt), and Sun Fook (0.6 mt)
Demand/Supply Outlook: Oversupply Market
INDOCEMENT
in mio Tons
CAGR Supply 2016-2025: 2.4%
CAGR Demand 2016-2025: 6.8%
CAGR Supply 2001-2015: 4.0%
CAGR Demand 2001-2015: 6.5%
200
100%
Mio Ton
91.2%
91.0%
180
85.3%
84.8%
160
76.1%
73.7%
83.9%
85.2%
81.7%
76.2%
75.8%
74.4%
71.2%
70.5%
68.3%
140
120
58.0%
54.6%
100
Export
62.6%
64.7%
61.8%
61.5%
112.7
114.5
52.1
47.5
46.1
44.9
44.9
40
25.7
27.1
27.5
15.2%
5.2%
1.8%
30.2
31.5
31.9
34.2
9.7%
4.2%
1.5%
7.0%
44.9
38.1
53.8
56.3
60.4
55.0
121.9
121.9
60%
121.9
111.2
103.9
40%
97.1
90.8
84.8
79.3
74.1
73.3
60
121.9
98.5
69.2
69.1
47.5
120.3
103.8
81.4
47.5
117.7
Import
80
47.1
Consumption per
capita = 396kg
67.3%
Consumption per capita = 243 kg
Vietnam = 611 kg
Thailand = 443 kg
Malaysia = 751 kg
Philippines = 240 kg
Singapore = 1,380 kg
Brunei = 899 kg
63.6%
57.0%
80%
79.7%
58.0
59.9
62.0
61.6
20%
64.1
Export
48.0
38.4
40.8
0%
20
11.4%
0.9%
6.2%
17.7%
14.5%
5.5%
3.3%
3.5%
-0.6%
4.0%
8.0%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
-20%
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Demand Growth
Slide 4 - August 2017
Q2 Results - Indocement
Domestic Demand
Domestic Supply
Utilization
Cement demand shows down trend 4 years in a row as multiplier
effect of infrastructure spending has not been realized
Source: Indonesian Cement Association, BPS Statistic
15.2%
9.7%
25.7
3.3%
2001
5.2% 27.5
27.1
4.8%
4.5%
30.2
31.5
31.9
34.2
7.0%
5.0%
5.7%
5.5%
6.3%
1.5%
2003
2004
2005
2006
6.2%
4.6%
4.2%
1.8%
2002
11.4%
6.0%
55.0
48.0
14.5%
58.0
59.9
6.2%
6.0%
6.2%
5.6%
5.5%
5.0%
3.3%
0.9%
2007
2008
61.6
5.0%
4.7%
3.5%
29.4
29.0
5.2%
5.1%
2.7%
-1.3%
-0.6%
2009
Domestic Demand (mio T)
62.0
40.8
38.4
38.1
17.7%
INDOCEMENT
2010
2011
2012
2013
2014
GDP Growth
2015
2016
H1
2016
H1
2017
Demand Growth
Cement Demand signs bottom up amid strong trade balance signal
Weighted by relatively high mortgage rate
Mortgage
Rate %
% Demand
Growth
20%
12.0%
17.7%
10.0%
10.0%
9.5%
14.5%
8.0%
6.0%
10.5%
7.5%
15%
10%
6.2%
5.5%
4.0%
3.3%
4.8%
3.5%
-0.6%
2.0%
5%
0%
-1.3%
-5%
0.0%
10
11
12
13
14
15
16
17
30.0
25.0
20.0
15.0
10.0
5.0
0.0
-5.0
-10.0
-15.0
-20.0
20%
17.7%
14.5%
Slide 5 - August 2017
Q2 Results - Indocement
BI Rate
15%
10%
6.2%
5.5%
5%
3.3% 3.5%
2.7%
0.0%
-1.3%
0%
-5%
2010 2011 2012 2013 2014 2015 2016 H1 H1
2016 2017
Non Oil and Gas
BCA - KPR
% Demand
Growth
Support by positive trade balance
Bio USD
Cement Demand
Oil and Gas
Heavy Equipment Order may Reach 20% Higher YoY
Confirmation of commodity sector recovery and infrastructure strong progress
Heavy equipment order is a leading indicator for cement demand
Slide 6 - August 2017
Q2 Results - Indocement
Source: HINABI, Indonesian Heavy Equipment Association; Indonesian Cement Association
INDOCEMENT
Domestic Consumption Growth & Market Share per region
YTD June 2017
INDOCEMENT
Source: Indonesia Cement Association
Market Growth:
>15%
10-15%
5-10%
0-5%
Indonesia Macroeconomic Overview
INDOCEMENT
World Bank anticipates Indonesia’s economy to grow by 5.3% in 2017 and 5.5% in 2018
and 2019 supported by resilient domestic demand and improvement in private investment
IMF: In 2017, growth is expected to rise modestly to 5.1%, led by a gradual pickup in
private investment in response to stronger commodity prices, low interest rates, and a
recovery in external demand on the back of a pickup in global growth and trade
Bank Indonesia reaffirmed its estimate of 5.0% - 5.4% growth rate in the economy for
2017
Overall, we see the cautious early signs of green shoots – where Consumer Confidence
Index remain robust at the end of Q2 2017 with income boosted by Tunjangan Hari Raya,
end of elections, S&P rating upgrade for Indonesia (the last of the three key credit ratings
agencies to give investment grade status).
%
Gross Domestic Product
Source: Indonesia Statistic
Slide 2 - August 2017
Q2 Results - Indocement
Indonesian Cement Industry 2017 Landscape
Lafarge Indonesia
1.5 mio ton
0.2 mio ton (g)
Semen Bosowa
4.4 mio ton
3.0 mio ton (g)
Anhui Conch
4.5 mio ton
Indocement
24.9 mio ton
Semen Indonesia
7.2 mio ton
0.9 mio ton (g)
Semen Baturaja
2.2 mio ton
0.7 mio ton (g)
Merah Putih
4.9 mio ton
2.8 mio ton (g)
Siam Cement
1.8 mio ton
Holcim Indonesia
12.1 mio ton
INDOCEMENT
Semen Indonesia
7.4 mio ton
Semen Indonesia
15.2 mio ton
0.7 mio ton (g)
Semen Kupang/Merah Putih
0.4 mio ton
Semen Puger
0.5 mio ton
Jui Shin
1.8 mio ton
Anhui Conch
2.2 mio ton (g)
Slide 3 - August 2017 Source: ASI and internal estimation
Q2 Results - Indocement
Panasia
1.8 mio ton
Total Cement Capacity in 2017 of 103.8* mio tons,
from 98.5 mio tons in 2016
* Total capacity in 2017 includes Finished Mills from Hao Han (0.6 mt), Semen
Jakarta (1.5 mt), and Sun Fook (0.6 mt)
Demand/Supply Outlook: Oversupply Market
INDOCEMENT
in mio Tons
CAGR Supply 2016-2025: 2.4%
CAGR Demand 2016-2025: 6.8%
CAGR Supply 2001-2015: 4.0%
CAGR Demand 2001-2015: 6.5%
200
100%
Mio Ton
91.2%
91.0%
180
85.3%
84.8%
160
76.1%
73.7%
83.9%
85.2%
81.7%
76.2%
75.8%
74.4%
71.2%
70.5%
68.3%
140
120
58.0%
54.6%
100
Export
62.6%
64.7%
61.8%
61.5%
112.7
114.5
52.1
47.5
46.1
44.9
44.9
40
25.7
27.1
27.5
15.2%
5.2%
1.8%
30.2
31.5
31.9
34.2
9.7%
4.2%
1.5%
7.0%
44.9
38.1
53.8
56.3
60.4
55.0
121.9
121.9
60%
121.9
111.2
103.9
40%
97.1
90.8
84.8
79.3
74.1
73.3
60
121.9
98.5
69.2
69.1
47.5
120.3
103.8
81.4
47.5
117.7
Import
80
47.1
Consumption per
capita = 396kg
67.3%
Consumption per capita = 243 kg
Vietnam = 611 kg
Thailand = 443 kg
Malaysia = 751 kg
Philippines = 240 kg
Singapore = 1,380 kg
Brunei = 899 kg
63.6%
57.0%
80%
79.7%
58.0
59.9
62.0
61.6
20%
64.1
Export
48.0
38.4
40.8
0%
20
11.4%
0.9%
6.2%
17.7%
14.5%
5.5%
3.3%
3.5%
-0.6%
4.0%
8.0%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
7.0%
-20%
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Demand Growth
Slide 4 - August 2017
Q2 Results - Indocement
Domestic Demand
Domestic Supply
Utilization
Cement demand shows down trend 4 years in a row as multiplier
effect of infrastructure spending has not been realized
Source: Indonesian Cement Association, BPS Statistic
15.2%
9.7%
25.7
3.3%
2001
5.2% 27.5
27.1
4.8%
4.5%
30.2
31.5
31.9
34.2
7.0%
5.0%
5.7%
5.5%
6.3%
1.5%
2003
2004
2005
2006
6.2%
4.6%
4.2%
1.8%
2002
11.4%
6.0%
55.0
48.0
14.5%
58.0
59.9
6.2%
6.0%
6.2%
5.6%
5.5%
5.0%
3.3%
0.9%
2007
2008
61.6
5.0%
4.7%
3.5%
29.4
29.0
5.2%
5.1%
2.7%
-1.3%
-0.6%
2009
Domestic Demand (mio T)
62.0
40.8
38.4
38.1
17.7%
INDOCEMENT
2010
2011
2012
2013
2014
GDP Growth
2015
2016
H1
2016
H1
2017
Demand Growth
Cement Demand signs bottom up amid strong trade balance signal
Weighted by relatively high mortgage rate
Mortgage
Rate %
% Demand
Growth
20%
12.0%
17.7%
10.0%
10.0%
9.5%
14.5%
8.0%
6.0%
10.5%
7.5%
15%
10%
6.2%
5.5%
4.0%
3.3%
4.8%
3.5%
-0.6%
2.0%
5%
0%
-1.3%
-5%
0.0%
10
11
12
13
14
15
16
17
30.0
25.0
20.0
15.0
10.0
5.0
0.0
-5.0
-10.0
-15.0
-20.0
20%
17.7%
14.5%
Slide 5 - August 2017
Q2 Results - Indocement
BI Rate
15%
10%
6.2%
5.5%
5%
3.3% 3.5%
2.7%
0.0%
-1.3%
0%
-5%
2010 2011 2012 2013 2014 2015 2016 H1 H1
2016 2017
Non Oil and Gas
BCA - KPR
% Demand
Growth
Support by positive trade balance
Bio USD
Cement Demand
Oil and Gas
Heavy Equipment Order may Reach 20% Higher YoY
Confirmation of commodity sector recovery and infrastructure strong progress
Heavy equipment order is a leading indicator for cement demand
Slide 6 - August 2017
Q2 Results - Indocement
Source: HINABI, Indonesian Heavy Equipment Association; Indonesian Cement Association
INDOCEMENT
Domestic Consumption Growth & Market Share per region
YTD June 2017
INDOCEMENT
Source: Indonesia Cement Association
Market Growth:
>15%
10-15%
5-10%
0-5%