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Indocement hopes to get back on feet in 2017
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Workers move bags of cement onto a ship in Jakarta. (Bloomberg/Dimas Ardian)
I
ndonesia’s second-largest cement producer PT Indocement Tunggal Prakarsa expects to finally see the light at the end of the tunnel this year following a second consecutive decline in net profit last year.
“Cement consumption is expected to grow by 3 to 5 percent in 2017,” Indocement president director Christian Kartawijaya said Friday in Jakarta.
Christian expected there will be an upsurge in consumption because of several factors, including funds coming from the government’s tax amnesty, the drop of interest in housing loans (KPR) and relief in requirements for the loan-to-value (LTV) ratio.
“I believe it’s just about time for the property sector to be affected. We are currently waiting for the multiplier effect,” Christian said.
(Read also: Brakes to be put on aggressive cement expansion)
Indocement booked Rp 15.36 trillion in net revenue last year, falling from Rp 17.8 trillion in 2015 and Rp 19.9 trillion in 2014.
One of the triggers was President Joko “Jokowi” Widodo’s instruction to state-owned cement maker PT Semen Indonesia in January 2015 to lower the price of cement by Rp 3,000 per sack.
Therefore, Indocement has been trying to carry out various efficiency measures, leading to an annual drop of 9.18 percent in its cost of goods sold to Rp 9.89 trillion in 2015 and an 8.7 percent drop to Rp 9.03 trillion in 2016.
However, the company’s net profit still fell gradually within the past three years. It recorded Rp 3.87 trillion in profit last year, falling from Rp 4.36 trillion in 2015 and Rp 5.29 trillion in 2014. (bbn)
