Semen Gresik projects to make Rp 200b profit

JAKARTA (JP): PT Semen Gresik, a publicly-listed cement producer, said yesterday it had made a net profit of Rp 52.2 billion (US$22 million) in the first quarter of 1996.

Semen Gresik's internal operations contributed only Rp 15 billion to its consolidated profit even though its production capacity is far greater than its two subsidiaries -- PT Semen Tonasa and PT Semen Padang -- which were acquired in August 1995.

Besides Semen Tonasa and Semen Padang, Semen Gresik's subsidiaries include PT Kawasan Industri Gresik, PT Industri Kemasan Semen Gresik and PT United Tractors.

"I think it's normal because during the first quarter, Semen Gresik had to recondition its machinery," the company's president, Urip Timuryono, said regarding the low contribution by Semen Gresik's internal operations.

"Based on the first quarter results, I'm optimistic that we will book more than Rp 200 billion in net profit this year."

He said the profits of Semen Padang and Semen Tonasa have been consolidated since last September.

"For the fourth quarter of last year, Semen Padang and Semen Tonasa booked Rp 48 billion and Rp 15 billion in operational revenue respectively," he said.

Semen Gresik's consolidated operational revenue for 1995 was Rp 207 billion.

Urip said Semen Padang and Semen Tonasa, and the Tuban I cement production unit in East Java had increased Semen Gresik's consolidated net profit to Rp 162 billion in 1995 from Rp 54 billion in 1994.

Semen Gresik's net sales rose by 165 percent from Rp 118 billion in 1994 to Rp 820.9 billion last year, with its sales volume rising from 2.2 million tons to 3.6 million tons.

Urip confirmed the company had opened a plant at Semen Tonasa's industrial complex in Ujungpandang, South Sulawesi, with a 2.3 million ton annual capacity. Commercial production at the plant has been delayed until October.

Semen Gresik has a total production capacity of 8.5 million tons per year following its recent acquisitions.

"We will be the biggest cement producer in 1998, with a total production capacity of 17.7 million tons after operating several new production units including Tonasa IV, Tuban II, Tuban III and Indarung V, each with an annual production capacity of 2.3 million," Urip said.

Urip estimated that Indonesia will import around one million tons of cement in 1996. Last year it imported 800,000 tons.

He said domestic demand for cement would reach 27.9 million tons in 1996 compared to 24.7 million tons last year.

Indonesia's cement factories, now with an annual capacity of 26.2 million tons, produced only 23.1 million tons last year. The country's annual capacity is expected to rise to 27 million tons later this year.

Urip said Semen Tonasa is allowed to export up to 500,000 tons of cement each year. Destinations include Myanmar, Singapore and Bangladesh.

Urip said the company's shareholders had approved a dividend of Rp 109, totaling Rp 24 billion or 40 percent of the company's 1995 net profit.

Commenting on the company's plan to issue bonds on the Luxembourg Stock Exchange, Urip said "it's true that we have planned to raise funds up to US$150 million from a bond issue but we may not do it if other instruments are more attractive."

On March 15, Semen Gresik announced it wanted to issue Eurobonds in May 1996. It set up a finance company in Netherlands to do this.

"But one thing is sure, we will not make another rights issue on the Jakarta Stock Exchange until the end of 1998 when construction of our current projects is completed," Urip said.

Semen Gresik raised Rp 1.7 trillion from a rights issue last year, most of it was used to finance the acquisitions of Semen Tonasa and Semen Padang. (alo)