Business Owners Demand Strict Moratorium on New Cement Factory Investments, What's Going On?

Jakarta, CNBC Indonesia - The national cement industry is facing a classic unresolved problem: excess production capacity. This situation means many factories are not operating optimally.

Chairman of the Supervisory Board of the All-Indonesia Cement Companies Association (Asperssi), Christian Kartawijaya, stated that the current industry utilisation rate remains low, far from the ideal condition to maintain business health.

The significant excess supply has made competition increasingly fierce, even forcing several factories to reduce production or halt operations.

“As we’ve already conveyed, the cement industry’s utilisation is currently around 53%,” he said after the Halal Bihalal event on Tuesday (14/4/2026).

This condition indicates that nearly half of the production capacity is unused, directly impacting company efficiency and profitability.

The oversupply is not on a small scale but has reached tens of millions of tonnes, becoming a structural burden for the industry.

“The oversupply could reach around 55 million tonnes,” Christian remarked.

This situation is exacerbated by the continuous influx of new capacity, even though the market has not shown significant recovery.

Industry players are thus pushing the government to tighten the moratorium policy on new cement factory construction to prevent the situation from worsening.

“We must select which factories are more efficient. That’s why we hope there can be a moratorium that is maintained,” he stated.

On the other hand, new investments, including from outside China, continue to enter through existing permits. This adds pressure to the domestic market.

Although most new capacity is intended for export, up to 80%, industry players remain concerned about its impact on the balance of the domestic market.

“In East Kalimantan, they will build 8 million tonnes of clinker capacity,” he mentioned.

With relatively limited demand growth, the additional new capacity is deemed unnecessary in the coming years.

The industry assesses that without capacity control, the oversupply condition will persist and hinder sector recovery.

“If it grows 5 to 6% per year, perhaps in the next five years we won’t need new cement factories,” he said.