Semen Gresik Sees More Growth After Record Output
Gresik, East Java. Semen Gresik, the country’s largest cement maker, saw record production last year and says more growth is on the horizon.
Cement production rose 18 percent in 2012, and revenue at the company is expected to reach Rp 19 trillion ($2 billion).
“We hit a record in terms of production,” said the company’s president director Dwi Soetjipto in Gresik early this week. The company produced a total of 22.6 million tons of cement last year.
Revenue at the East Java-based cement maker rose to Rp 18.43 trillion in the first nine months of 2012 and net income was Rp 4.55 trillion in the period, according to data from the company. That is more than the company’s total revenue in 2011 of Rp 16.4 trillion and its net income of Rp 3.9 trillion.
Dwi said the company expects cement production to reach 28.3 million tons this year, aided by the company’s plan to build a new cement plant in Rembang, Central Java, and the recent acquisition of a cement maker in Vietnam.
Semen Gresik acquired a majority stake in Vietnam’s Thang Long Cement for $157 million on Dec. 18.
Cement production from the Vietnam plant is expected to jump to 2.3 million tons from 1.8 million tons, Dwi said. That will help the company to meet its 2013 production target of more than 28 million tons.
Semen Gresik has set aside $400 million for capital expenditure this year. The funds will be used in part to finance the construction of the company’s new cement plants in Rembang, Central Java, and in Padang, West Sumatra.
Semen Gresik, which plans to rebrand itself as Semen Indonesia later this year, has two subsidiaries, Semen Padang and Semen Tonasa. The three companies sold 20.4 million tons of cement during in the January-November period last year, up 14 percent from a year earlier. The units account for 41 percent of the country’s cement market.
Semen Gresik also plans to acquire mid-sized state cement maker Semen Baturaja. Semen Gresik will undertake the acquisition after Baturaja complete’s its initial public offering, planned for February this year.
Shares of Semen Gresik rose 0.6 percent to Rp 15,950 on the Indonesia Stock Exchange, lagging behind the 0.7 percent gain in the main stock gauge.
Semen Gresik competes with other cement makers such as Holcim Indonesia and Semen Bosowa.
Indonesian cement makers have benefited from rising demand in the property and infrastructure development sectors across the country.