JAKARTA. Indonesia's cement consumption is predicted to rise to 85 million tons in 2017 from around 65 million tons in 2016.

Cement consumption is predicted to increase significantly this year with brisker development of infrastructure projects, a government official said.

"The people account for around 80% of the consumption," Director General for Chemical, Textiles and Multifarious Industries Achmad Sigit Dwiwahjono said in a statement issued here on Monday (9/1).

Apart from government's projects housing and property development would contribute significantly to the increase in the cement consumption, Sigit said in a ceremony of Semen Indonesia Award on Innovation 2015-2016 in Gresik, East Java.

Sigit said cement consumption is an indicator of progress in development in a country.

"If the cement industry grows in a country, development in that country is progressing for certain," he said.

He said increase in investment in cement industry in the country is marked with the operation of a new factory in Rembang, Central Java of the state-owned cement producer Semen Indonesia.

The operation of the new factory is expected to help boost economic development in that area, he said.

Chief executive of PT Semen Indonesia Tbk (SMGR) Rizkan Chandra said the strength of the holding company of Semen Indonesia Group is in production capacity.

Amid the difficult condition of the country's economy, and tighter competition, Semen Indonesia could still increase its lead in production capacity and market share, Rizkan said.

In 2016, the Tuban factory of the company produced more than 1.38 million tons of cement or a 2% increase from 1.36 million tons in 2015.

The publicly traded company reported Rp 4.01 trillion in net profit in 2016, down from Rp 5.52 trillion in 2015 on weak demand and tight competition in the country.

"The country's cement industry contracted 3% on the presence of new players in the industry but the company maintained its lead with a market share at 41.6% Rizkan said. 

Editor: Sanny Cicilia