Iran-US Conflict Makes Indonesia's Cement Industry Even Tougher

The conflict between countries in the Middle East is also disrupting the cement industry. President Director of PT Semen Indonesia (Persero) Tbk (SMGR), Indriefouny Indra, stated that geopolitics in the Middle East is causing cement prices in the market to rise. He explained that the increase in coal prices, which affects logistics or freight costs, is also impacting the company’s production costs. This adds to the burden, in addition to the still sluggish domestic cement demand. “The cost of goods produced is rising due to increases in coal prices and freight,” he said during a meeting with Commission VI of the House of Representatives, on Wednesday (1/4/2026). Indriefouny elaborated that energy costs are the largest component in cement production, accounting for more than 50%. Meanwhile, the Work Plans and Budgets (RKAB) for several coal mines have not yet received approval, affecting energy supply. Other challenges in the cement industry stem from disruptions in international shipping routes, which can hinder the import of specific factory machine spare parts from Europe/America. “Because the supply from the only petrochemical company in Indonesia, Chandra Asri, has declared force majeure, so there is no source,” he said. He added that, nevertheless, the company affirms it will continue other efforts to mitigate the weakening domestic demand, namely by increasing exports. “We have already, to address the shortage of domestic needs, increased exports,” he concluded.