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Indonesia's automotive and cement sectors have performed
relatively well for 2007's first three months, a compilation of the
latest industry figures show, which should help support higher first
quarter growth on consumption and exports.
Data from the Association of Indonesian Automotive Manufacturers
(Gaikindo) shows that sales of cars in the country reached 84,511 as of
March, up 6 percent from the same period last year when they were at
79,412.
Similarly for the two-wheeler market, the Indonesian Motorcycle
Industry Association (AISI) has so far recorded sales of 1.05 million
units, a 20 percent increase on the 873,808 units sold during last
year's first quarter.
The higher first quarter sales of motor vehicles has been good news for
the rubber tire industry, which managed to record sales of 10.4 million
rubber tires for the first three months to March, as compared to 9.78
million in the same period last year.
With most Indonesians taking up loans when purchasing cars and
motorcycles, the current growth in the automotive sector could further
help boost consumer loans of Indonesia's banking sector as well.
Bank lendings as of February has amounted to Rp 783.5 trillion (US$87
billion), from December's Rp 792.3 trillion.
With inflation having slowed recently to an on-year 6.29 percent by
April, and the central bank having cut its key interest rate to 9
percent currently, all have helped revive consumption in the country,
which still makes up over than 60 percent of Indonesia's total gross
domestic product.
Aside from consumption, Indonesia has also been building up its economy
of late on two other economic drivers: exports, amid strong global
demand and prices for its main commodities, and direct investments.
The Central Statistics Agency (BPS) is scheduled to publish first
quarter growth figures mid-May. Indonesia's economy grew by only 5.5
percent last year, slightly slower than 2005's 5.6 percent.
Compiled data for the cement industry shows an 8 percent increase in
cement consumption to 7.6 million tons during the first three months to
March, which should show rising construction and investments in the
property sectors.
Cement exports also rose 40 percent to 700,000 tons.
Yet a downside of the cement industry may be in its sustainability in
growth, with the fact that only state-owned Semen Gresik managed to
book a 14 percent increase in first quarter profits to Rp 329.9
billion, and in a 12 percent growth in sales to 3.93 million tons.
Its competitors, Holcim and Indocement Tunggal, reported losses on
currency fluctuations and rising production costs.
Meanwhile, in the agriculture sector, Indonesia saw production in two
of its main commodities of crude palm oil (CPO) and rubber having
slowed.
Indonesia's CPO production in January-March dropped 10 percent to 1.26
million tons per month, which Indonesian CPO Producers Association
(Gapki) chairman Derom Bangun attributed to a normal climate cycle
affecting production.
CPO exports, however, still managed to grow 8.2 percent from last
year's first quarter.
The Indonesian Rubber Producers Association (Gapkindo) is also seeing
slower production for the first quarter, although it is still upbeat of
fulfilling a 6 percent full-year growth in exports from last year's 2.3
million tons, and a 10 percent domestic consumption rise from 355,000
tons.
Indonesia produced 2.6 million tons of rubber last year.
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