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tocks of cement firms slid steeply on Friday after President Joko '€œJokowi'€ Widodo announced lower cement selling prices which could constrain the companies'€™ incomes.

Analysts and business players, however, were quick to respond that cement firms'€™ financial performance should not be a concern and that the stock plunge would just be temporary as cement demand in Southeast Asia'€™s largest economy would be robust this year as a result of the government'€™s infrastructure push.

Shares of state-run company and the nation'€™s largest cement producer Semen Indonesia declined by around 7 percent to Rp 15,000 (US$1.19) apiece in Friday'€™s closing, while Indocement Tunggal Prakasa plunged by 10.26 percent to Rp 22,300 per share.

State-owned Semen Baturaja and another cement maker Holcim Indonesia saw stock prices slip by 4.39 percent and 1.44 percent, respectively, to Rp 370 and Rp 2,050 apiece.

That compares with a 0.78-percent drop in the benchmark Jakarta Composite Index (JCI) to 5,148.38, with Semen Indonesia and Indocement stocks among the top daily laggards.

President Jokowi instructed on Friday that state-run cement producers deflate prices by around Rp 3,000 per sack from around Rp 60,000 a sack at present in a move to enable the wider public to buy cement with less financial burden. Cement consumption is one of the key economic growth indicators in Southeast Asia'€™s largest economy.

With state-run companies lowering cement prices, other cement makers might have to adjust and decline their selling prices to keep up with competition, said Investa Saran Mandiri analyst Kiswoyo Adi Joe.

'€œ[But] we believe that declining [selling] prices might lead to higher demand and the expected increase in infrastructure projects will also lead to more cement demand,'€ he said, adding that cement stocks would rebound after the companies showed that they could compensate for the lower selling prices with bigger sales.

Reza Nugraha of MNC Securities agreed, saying that cement industry was a mature business that cannot be simply disrupted by a slight decrease in selling prices.

Semen Indonesia corporate secretary Agung Wiharto said the company fully supported the government'€™s decision.

'€œWe are owned by the government and we do believe the move is made for the greater good of the country,'€ Agung told The Jakarta Post over the phone.

Semen Indonesia has previously projected that the company will see around a 5 to 6 percent increase in cement demand this year, in line with projections from cement associations.

'€œWhile we might have to make a slight revision to our business target, there are also few things that we should remember. First, the move might help to spur infrastructure growth and curb inflation as well as help adjust consumers'€™ purchasing power to consume our products,'€ Agung said.

Second, he said, the President'€™s decision to also lower fuel prices would help deflate Semen Indonesia'€™s energy and transportation costs, which are the company'€™s highest spending area. Logistics contribute around 17 percent to the company'€™s overall costs.

Agung added that Semen Indonesia would take efficiency strategies to the forefront of its business planning. The company could still make significant savings from cutting costs here and there, he concluded.