Indonesia’s cement industry faces a challenging period, as evidenced by a significant contraction in sales volumes during the first half of 2025. Data from Indocement Tunggal Prakarsa (INTP) reveals a notable 7.3% year-on-year (YoY) decline in June 2025 industrial sales volume, culminating in a 3.1% YoY drop for the entire first half of 2025. This sharp reversal from the 2.2% YoY growth seen in 1H24 marks the third consecutive first-half downturn for the sector, signalling deeper structural headwinds.
Industry Downturn Deepens: A Three-Year Slump
The latest figures paint a stark picture: excluding the 2024 contribution from Semen Grobogan, which partially masked earlier trends, the first half of 2024 itself saw a 0.9% YoY contraction. This extended period of decline suggests that the Indonesian cement market is grappling with more than just cyclical fluctuations; it indicates a persistent softness in demand that requires close attention from investors and policymakers alike. The industry, often a bellwether for construction and infrastructure activity, is clearly under pressure.
Segmented Slump: Bulk vs. Bagged Dynamics
A deeper dive into the sales composition reveals a divergent performance between bulk and bagged cement, illuminating key demand drivers and competitive dynamics.
Bulk Cement: The IKN Impact and Shifting Sands
The industrial volume of bulk cement plummeted by 10% YoY, consequently reducing its contribution to total sales to 28% from 30.2% in 1H24. This decline is largely attributable to a slowdown in demand from large-scale infrastructure projects, most notably the Nusantara Capital City (IKN) initiative. Kalimantan, the region central to the IKN development, experienced a significant 20% YoY contraction in sales volume during 1H25, a dramatic reversal from the robust 22% YoY growth recorded in 1H24. This sharp deceleration underscores the volatility associated with mega-project timelines and the broader economic ripple effects.
Bagged Cement: A Foundation of Stability Amidst Erosion
In contrast, bagged cement sales volumes remained relatively stagnant YoY in 1H25. This segment’s resilience saw its contribution to total sales rise to 72% from 69.8% in 1H24, reflecting the more stable demand from retail and smaller-scale construction. Interestingly, INTP‘s management highlighted that their selling prices for bagged cement held firm as of June 2025. However, this stability exists against a backdrop where some competitors have begun offering discounts and promotions in regions experiencing heightened market contraction, hinting at potential future price pressures across the industry.
Giants Under Pressure: INTP & SMGR
The industry-wide sales decline inevitably impacted its two dominant players: Indocement Tunggal Prakarsa (INTP) and Semen Indonesia (SMGR). INTP recorded a 2.8% YoY decline in cement sales volume for 1H25, a significant shift from the 10% YoY growth seen in 1H24 (which included Semen Grobogan). Similarly, SMGR‘s sales volume fell by 2.2% YoY, worsening from its 1.1% YoY decline in 1H24.
Market Share Realignments: A Shifting Duopoly
The combined market share of INTP and SMGR, which historically hovered around 79% in 2023-2024, contracted to 77.1% in 1H25 (from 79.4% in 1H24 and 77.2% in 1Q25). This erosion primarily stemmed from SMGR, whose market share dwindled to 47.6% in 1H25 (down from 50% in 1H24 and 47.1% in 1Q25). This decline reflects SMGR‘s domestic sales falling more steeply than the overall industry. Conversely, INTP managed a slight market share gain, reaching 29.5% in 1H25 (a marginal increase from 29.4% in 1H24, though a slight dip from 30.1% in 1Q25), suggesting a more resilient strategy or regional demand. This subtle shift underscores the intense competition within a contracting market, where every percentage point of market share becomes a fiercely contested battleground.