JAKARTA (TheInsiderStories) – Cement sales of state-owned company, PT Semen Indonesia Tbk (IDX: SMGR) corrected by 4.86 percent throughout the first half (1H) of 2019 compared to the previous year, it said on Monday (07/15). Based on the company data, until June total cement sales recorded 12.74 million tons from the same period in 2018 13.39 million tons.
For that, the cement producer released local bonds with total amount Rp4.08 trillion (US$291.42 million) in May. The funds will be use to pay the long-term debt of its new unit.
So far the contribution of the new brand company PT Solusi Bangun Indonesia not able to support the company’ cement sales. After consolidating with SMCB, said the Director of Solusi Bangun, Agung Wiharto sees the sales volume could grow around 5 percent in 2019 compared to a previous year. The calculation, he said, had considered inflation and the Rupiah rate.
Last year, the state-owned cement producer reported was able to sold 33.6 million tons or up 7 percent compared to 2017. The growth of the company’ cement sales reportedly was sustained by higher export sales but the domestic cement sales only grew 2 percent to 27.8 million tons.
Semen Indonesia Group targets to export 4 million tons of cement this year. Before consolidation, the manufacturer’ exports recorded 3 million tons.
At present, the domestic cement industry is still experiencing excess supply which is estimated to reach 30 percent of the current national capacity of 110 million tons per year.
As is known, the company has completed the process of acquiring 80.64 percent SMCB through its subsidiary PT Semen Indonesia Industri Bangunan. The cement producer act indirectly through the subsidiary to control 99 percent of the shares.
It was explained that Semen Indonesia had purchased 6.18 billion shares owned by Holderfin, with a price of Rp 2,097 a share. In total the share acquisition transaction value reached Rp12.95 trillion.
Furthermore, it said, the acquisition will provide the manufacturer with a significantly larger capacity and broader product portfolio and geographical footprint to fully capitalise on these tremendous growth opportunities in the domestic market.
The transaction will also strengthen the state-owned cement producer resilience in Indonesia. Currently, there are 15 cement companies in Indonesia with total installed capacity 107 million tons per annum, whereby 63 percent capacity share is owned by private and foreign players.
“In the competitive environment of national cement industry, the combination between Semen Indonesia and Holcim will be stronger and larger. Our Group becoming the largest cement company in South East Asia with 53 MT cement capacity per annum,” said President Director Hendi Prio Santoso.
Semen Indonesia was established in 1957 in Gresik, Indonesia. In 1995, Semen Indonesia consolidated with PT Semen Padang and PT Semen Tonasa and was known as Semen Gresik Group. In 2013, Semen Gresik Group changed its name to be Semen Indonesia as strategic holding company that owns PT Semen Gresik, PT Semen Padang, PT Semen Tonasa, and Thang Long Cement JSC.
The company become publicly listed on the IDX since 1991. 51 percent of the shares are owned by the Government of
Indonesia and the remaining 49 percent.