JAKARTA (TheInsiderStories) - Publicly listed firm, PT Indocement Tunggal Prakarsa Tbk (IDX: INTP), sees the national cement industry able to grow 5 percent in 2021 from this year contraction 9 - 11 percent, said the president director. The “Tiga Roda” manufacturer is on alert to seize the market to improve the depressed performance during this year.
“We made this [estimate] because we saw the infrastructure budget figure rises from Rp280 trillion (US$20.0 billion) in this year to Rp414 trillion next year,” said the president director, Christian Kartawijaya, on Wednesday (11/11).
He also sees positive sentiment in the cement consumption from the ratification of the Omnibus Law for Job Creation. With the enactment of the bill, its estimated that more factories will be reallocated to industrial estates in Indonesia. Currently, he said, several factories have started moving their factory locations to industrial areas in the Cikampek areas in West Java.
In the first semester of 2020, total cement sales reached 30.88 million tones (MT) of cement, dropped 4.19 percent from 1H 2019 with total amount 32.23 MT of cement. The domestic cement sales also down 8.88 percent to 12.52 MT of cement and in a quarter-to-quarter basis, fell by 14.3 percent from the 1Q of 2020, which reached 14.62 MT of cements.
Indonesian Cement Association reported, Java still dominates the market with total sales volume 14.6 MT of cement, although it was plunged 10.42 percent from the same period of last year. The decline also occurred in other areas, for an example in Sumatra, where cement sales fell 0.67 percent to 5.98 MT of cement.
In Kalimantan, the volume also subsided by 9.06 percent to 1.7 MT of cement. The deepest sales correction occurred in the Nusa Tenggara Islands, which fell by 12.5 percent to 1.57 MT of cement. Nevertheless there are still an increase in the Eastern region which rose 11.65 percent to 867,672 tons.
The producers also announced, the export sales rose 32.80 percent in annual basis to 3.73 MT of cement from last year. These exports consisted of 314,269 tones of cement or contracted 42.70 percent from 2019 and clinker exports of 3.41 MT of cement or up 51.12 compared to last year.
The decreased in the 1H of 2020, said the association, mainly due to slowing down of project and development activities as a result of the rainy season, Ramadan and Eid al-Fitr holidays, as well as restrictions caused the pandemic.
“Many infrastructure and housing projects have been delayed because the budget has been diverted to health funds, but we can still seize opportunities from the retail market. So, conditions are still very dynamic,” said the chairman, Widodo Santoso, in a written statement on August 6.
He said, several cement issuers that dominate the market still posted a positive performance, although in terms of sales of cement corrected. The state-owned cement producer, PT Semen Indonesia Tbk (IDX: SMGR) and its subsidiary, PT Solusi Bangun Indonesia Tbk (IDX: SMCB) still recorded an increase in net profit.
In the 1H of 2020, the Group posted a net profit of Rp606.12 billion, up 26.3 percent from the same period in the previous year of Rp484.78 billion. The company’ revenues slightly decreased by 2 percent from Rp16.35 trillion to Rp 16.02 trillion in the 1H of this year.
The subsidiary, Solusi Bangun, also booked a net profit of Rp82 billion from a loss Rp279 billion in 1H of 2019. As of the end of the first semester of this year, the manufacturer recorded an increase in sales volume of cement and slag by 2 percent and stagnant revenue of Rp4.51 trillion.
While, Indocement‘ net profit lowered by 26.5 percent from Rp640.03 billion to Rp479.03 billion in the 1H of 2020. The revenue also down 11.5 percent to Rp6.17 trillion from previous year which reached Rp6.98 trillion.
US$1: Rp14,000
Written by Editorial Staff, Email: theinsiderstories@gmail.com
