· During August 2010, monthly domestic cement consumption dropped to 3,616 th tons, down by 3.3% MoM from 3,740 th tons in July 2010, as the nation begins the fasting month. We noted that on a yearly basis, domestic consumption was unchanged compared to 3,626 th tons consumed in August 2009. This update brings total domestic consumption until the end of August 2010 to reach 26,955 th tons this year, up by 9.4% YoY.
· Indocement (INTP, Rp18.700) saw the biggest decline among its peers with sales down by 6.3% MoM lower. However on a YTD basis, growth is still higher than Semen Gresik (SMGR, Rp9,600). Semen Gresik’s full capacity hinders it from growing along with the market, and the company was forced to only grow by 3.0% YoY.
· We see that domestic consumption will still show a monthly decline in September 2010. In the previous years, a declining trend is seen starting from the fasting month (e.g. : September 2007, August 2008) and will continue to the month during the long Lebaran holidays (e.g. : October 2008, November 2008). As such we estimate that sales could be down by around 8.0%-11% MoM which we consider natural to this sector.
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