Semen Gresik almost doubles net profit on high sales
Semen Gresik almost doubles net profit on high sales
The Jakarta Post, Jakarta
Higher sales and production have helped Indonesia's largest
cement producer, PT Semen Gresik (SG), to a 91 percent increase
within the first nine months of the year in its unaudited
financial report.
The state-owned company said its net profit in this year's
first three quarters increased to Rp 706 billion (US$70.74
million) from Rp 369 billion in the corresponding period last
year.
"We have far surpassed our full-year target of Rp 600
billion," said SG president director Dwi Sutjipto, adding that
the company would increase its 2005 full year production from
15.5 million tons to some 16 million tons.
Dwi said the company's plants had been upgraded and were at
full capacity so they could fulfill SG's ambition to reach its
total production capacity.
As of September 2005, the cement maker had produced 12.23
million tons, of which 10.83 million tons went to domestic
consumption and 1.46 million tons were exported.
Gresik domestic cement consumption increased by 8 percent due
to high demand from infrastructure projects in Banten and West
Java, as well as robust growth in the property sector. However,
exports of the company fell by 9.2 percent.
Elsewhere, the country's second largest cement maker
Indocement, controlled by Germany's giant HeidelbergCement AG,
had a net income of Rp 538.3 billion in the first nine months of
the year, compared with Rp 183 billion in the same period last
year. The company said sales rose 23 percent while currency
losses narrowed by 71 percent.
Combined, the two cement producers control approximately 70
percent of the domestic market share, which saw sales rise by 7.8
percent in the first nine months of the year.
At present, the industry's installed national capacity stands
at 45 million tons per year, with cement expected to reach some
33 million tons this year, up from 30.5 million tons last year.
The production of Gresik -- which has subsidiaries of PT Semen
Padang in West Sumatra and PT Semen Tonasa in South Sulawesi --
now accounts for some 44 percent of the country's cement supply.
Dwi projected that national demand would grow by 8.5 percent
next year, or some 35 million tons.
"If we want to maintain our market share, we have to increase
our production by 9 percent next year," he added.
The company is expecting to produce 17.4 million tons of the
key construction material next year, of which 16 million tons
would be allocated for domestic consumption.
"The current robust growth is the result of a good synergy in
increasing efficiency in both production process and
distribution," Dwi said.
SG reported that it had increased its prices by 6 percent as
of the beginning of this month as a result of higher fuel prices.
"The fuel price hike has raised our operational costs by 12.5
percent. But, due to a better and more optimum utilization (of
the plants) and distribution we can keep the prices from
soaring," he said.
The company still reports long-term debt of Rp 732 billion and
bond payments of Rp 432 billion due in June next year.
Meanwhile, its subsidiaries Semen Tonasa and Semen Padang
still have to pay their two-step loans to the government in the
amount of Rp 190 billion and Rp 300 billion, respectively.