IKN Development Will Increase Cement Sales To One Million Tons Per Year

Construction Illustration (Photo: Doc. Antara)

JAKARTA - The development of the State Capital (IKN) of the Archipelago contributes to the national sales of cement of around 800 thousand to 1 million tons per year.

"The development of IKN currently contributes to national sales (demand) of around 800 thousand to 1 million tons per year," said Research Analyst Mirae Asset Sekuritas Emma Almira Fauni quoting Antara.

Emma said that the development of IKN has the potential to have a positive impact on the development of the surrounding region, so it is hoped that it can support the national economy from the possibility of a slowdown.

He said that two large national cement companies, namely PT Semen Indonesia (Persero) Tbk (SMGR) and PT Indocement Tunggal Prakarsa (INTP) will be able to seize these opportunities, along with relatively good financial conditions.

"There are two sides. First, SMGR is superior to INTP due to its quarter to quarter (qoq) decline in performance in the first quarter of 2023, SMGR is more controlled than INTP, so the price pressure in the market for SMGR can soften more," said Emma.

Second, he continued, INTP is able to increase its market share outside Java and can benefit more from two factors this year, namely the decline in coal prices and the expansion of the domestic market obligation (DMO) INTP portion.

Meanwhile, Senior Economist Mirae Asset Indonesia Rully Arya Wisnubroto said the government had raised the budget for infrastructure development in 2023 to IDR 392 trillion, from IDR 365.8 trillion in 2022.

He explained that the budget will be focused on basic services, such as building houses, schools, providing drinking water, as well as connectivity including roads and toll roads.

"However, the realization of new infrastructure spending of IDR 59.7 trillion until April or equivalent to 15.2 percent of the total budget of 2023. Realization of infrastructure spending needs to be accelerated to support increased economic growth, both in the short and long term," said Rully.