C

ement manufacturer Holcim Indonesia is facing a tremendous challenge this year due to tight competition and oversupply that has dragged down its business performance.

The local cement market is becoming more competitive because of mushrooming production facilities, which have triggered more players to offer products at low prices.

“The market continues to be challenging; energy prices are rising. We are working on cost optimization and programs to bring new products into the market,” said Mark Schmidt, Holcim Indonesia’s chief financial officer, after the annual shareholder’s meeting on Thursday.

Strong competition and pricing pressure are apparent in the company’s first quarter results.

Holcim Indonesia’s net sales grew slightly by 2 percent to Rp 2.2 trillion (US$156.2 million). It suffered a net loss of Rp 332 billion in the first quarter of 2018.

Higher rainfall and reduced working hours, due to the many holidays in the first three months of this year, also contributed to the decline in sales, the firm claimed.

In order to survive, Holcim launched two application-based products for specific needs in the fourth quarter of 2017.

“Clearly, differentiation is our strategy. The new products, as you have seen, are PowerMax and WallMax.

“We will definitely launch additional products, which are application based,” said Gary Schutz, Holcim’s president director.

PowerMax is used for structure construction while WallMax is designed for wall construction.

The company is confident that this strategy will better capture its customers’ needs.

“We will focus on the two products we have launched. But, there will be a new innovation solution product for ready-mix,” said the firm’s marketing director, Surindro Kalbu Adi.

In an effort to improve earnings, it will also focus on cost efficiency programs as it embarks on digitalizing and optimizing its operations and capacity utilization.

One of its innovation was the creation of digital app to market its cement products.

Farida Helianti Sastrosatomo, the independent director: corporate secretary for Holcim Indonesia, said the cement maker had used the digital app to market PowerMax and WallMax.

“We are building relationships with our contractors, workers and others. Everything is done digitally through our app,” she said, adding that the company also built loyalty programs on its app to provide better services for its customers.

During the annual general shareholder’s meeting, shareholders agreed on the appointment of Surindro Kalbu Adi as the firm’s director, replacing Raden Ali Permadiono Sumedi.

Surindro had previously worked for a number of multinational companies as a senior manager.

Holcim Indonesia is a publicly listed cement company with its majority of shares of 80.65 percent being owned and managed by Swiss-based LafargeHolcim Group, a manufacturer of building materials that has more than 81,000 employees. It operates in more than 80 countries.

Holcim Indonesia is running integrated cement, ready-mixed concrete and aggregate businesses, as well as waste management.

It is headquartered in Jakarta and has four plants located in Narogong, West Java; Cilacap in Central Java; Tuban in East Java and Lhoknga in Aceh. The current total capacity of its plants amount to 15 million tons.