Gresik maintains double-digit growth

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The country’s largest cement producer, PT Semen Gresik, managed to maintain double-digit profit growth in the first semester of this year on the back of increases in prices and cement demand in the domestic market.

According to an audited financial report submitted to the Indonesia Stock Exchange (IDX), Semen Gresik booked Rp 2.1 trillion (US$220 million) in net profit in the first six months of the year, surging 12.3 percent from Rp 1.87 trillion in the same period last year.

The increase in net profit was supported by 13.82 percent increase in revenue to Rp 8.66 trillion during January to June period, a 13.82 percent increase compared to Rp 7.6 trillion in the same period last year.

“The increase was supported both by a growing sales volume and cement selling price,” Semen Gresik corporate secretary Agung Wiharto has said.

Local cement producers increased their prices to between 3 and 4 percent in the first semester of the year.

According to figures from the Indonesian Cement Association, Semen Gresik sold 10.29 million tons of cement in the first half of the year to the domestic market, a 12.2 percent surge compared to 9.18 million tons in the same period last year. The company also exported 33,246 tons in the period.

Adrianus Bias of PT Samuel Sekuritas Indonesia said that Semen Gresik’s domestic sales growth was below national cement consumption growth, which rose 15.1 percent to 25.89 million tons in the first semester compared to 22.49 million in the same period last year.

Adrianus, citing figures from the cement association, pointed out that the highest sales growth was recorded by PT Indocement Tunggal Prakarsa, whose sales rose 22 percent to 8.55 million tons in the first half of the year from figures in the same period last year.

Meanwhile, the country’s third-largest cement producer, PT Holcim Indonesia, sold 4.06 million to the domestic market, a 16.7 percent increase year on year.

“Holcim’s sales growth surpassed Semen Gresik’s as the former has diverted its sales to the domestic market in anticipation of growing demand,” Adrianus said.

However, he added, in terms of the total cement sales volume to domestic and overseas markets, Semen Gresik’s grew slightly more compared to Holcim, with 11.9 percent and 11.2 percent respectively. Meanwhile, Indocement’s sales volume grew 18 percent.

Indocement and Holcim have not yet announced their financial performances in the first quarter.

The country’s cement makers produced a combined 26.04 million tons of cement in the first half of the year, a 12.8 percent increase year on year. The country’s cement exports were down significantly by 75 percent to 147,924 tons of cement and clinker sent overseas in the first half of the year, compared to 596,853 tons in the same period last year.

Figures from the cement association also showed that Semen Gresik’s shares in the domestic market slipped to 39.74 percent as of the end of June, versus 40.76 percent year on year.

Semen Gresik has said that its market share has been declining as the company had no new plants to increase its production capacity. The state-owned company is expecting that operation of its two new cement plants, called Tuban IV in May and Tonasa V in September or October, will help it to secure bigger shares in the country’s growing cement consumption on the back of an expected increase in property development.

The company is also planning to start the construction of two more plants called SGG-III and SGG-IV in Java and Sumatra.