Ongoing corporate transformation has enabled PT Semen Indonesia (Persero) Tbk and its subsidiaries to become the leader of the domestic cement market. The growing performance has made us a multinational company, with world-class quality and services by complying with all applicable rules and standards. In economic performance, we refer to the accounting records in accordance with Financial Accounting Standards an International Financial Reporting Standards (IFRS).
In marketing activities, we comply with the provisions of Law No. 5/1999 on the Prohibition of Monopolistic Practices and Unfair Competition, and refer to Ministry of Industry No. 18/M-IND/PER/2/2012 to ensure the quality of our cement products according the Indonesian National Standard (SNI). All information in the labels of our cement products is an accordance with the quality of the content in the packing of cement. The information inclusion of every product also indicates Semen Indonesia and its subsidiaries compliance with Law No. 8/1999 on Consumer Protection.
Becoming National Vital Object of Industrial Sector
The development of Semen Indonesia has made the Company designated as National Vital Objects of Industrial Sector (OVNI). The status also provides business security and convenience for the Company through cooperation between the Ministry of Industry and the Indonesian National Police (Polri). In Presidential Decree No. 63 of 2004, OVNI is defined as the area or location, building/installation and businesses that concern the livelihood of people, the interest of the state, or strategic source of state revenue. Business that have received OVNI certificate, including Semen Indonesia, are entitled to be secured by Police from all kinds of disturbances and threats.
The business line continues to support sustain the company’s business
The development of economic sectors characterized by the increasing of increasing consumption of cement in bulk form, see the company as an opportunity to diversify the business in order to sustain the performance of Semen Indonesia. In 2014,the Company established PT Semen Indonesia Synergy Informatics engaged in information technology and PT Hutama Semen Indonesia engaged in the precast business which is a joint venture between PT SGG Concrete Hutama Karya Prima PT. The company completes its subsidiary entities that have been previously established, including at the end of 2013 to form a subsidiary of PT Krakatau Semen Indonesia engaged in waste treatment process Granulated Blast Furnace Slag (GBFS) into Ground granulated blast furnace slag (GGBFS) as one of the manufacture of cement. This step not only provide economic benefits, but also shows the company’s commitment to continue to develop environmentally friendly technologies.
We Continue Leading The Market
The synergy between the Company, PT Semen Padang, PT Semen Tonasa and PT Semen Gresik, has been able to meet the mandate of the Government as tha majority shareholder, which is to supply cement from Aceh to Papua. The synergy that has been created also establishe Semen Indonesia and its subsidiaries as the leader of domestic cement marker.
In 2014, our cement productions have been able to meet 43,7% of cement demand in the domestic market. The company projection of the national cement demand will continue to grow and with our production capacity, Semen Indonesia will be able to control 44% of the national cement market by 2030. Semen Indonesia is a market leader not only in Indonesia market. The acquisition of Thang Long Cement Company (TLCC) in Vietnamis part of our strategy to become a multinational company and expand to control the international cement market share. After TLCC, we prepared for the constructuin of grinding plants in Myanmar and Bangladesh.
As for the construction of new cement plants. Semen Indonesia is particularly committed to managing the potential social impacts. We try to prevent conflicts with local people and resolve any disputes through dialogue by upholding the applicable laws. The Company also tries to avoid relocating local people, by selecting land for the plant site as well as raw material mines at uninhabited locations.
By the end of the reporting period in 2014, Semen Indonesia and its subsidiaries have owned 24 packing plant and 11 cement special ports. The Company will still builde several packing plants, including:
Pontianak Packing Plant
Balikpapan Packing Plant
Lampung Packing Plant
The performance of Semen Indonesia and its subsidiaries continue to grow. The growth in 2014 even reached above the national cement industry average. Cement sales of the Company and its subsidiaries grew 4,9%, while the national cement industry sales grew 4%. The growth was due to the additional production capacity that has now reached 31,8 million tons of cement per year. We will continue to increase production capacity, both by building new plants as well as upgrading old plants. With all of the effort, Semen Indonesia’s production capacity by the end of 2017 is expected to reach 39,3 million tons per year. Anotherr factors that support the growth of the company is its ability to improve efficiency and costs around Rp 300 billion every year. Cost efficiency, among others, obtained as a result of energy conservation and reduction in CO2 emissions including greenhouse gases causing climate change, by utilizing biomass and wastes contain toxic materials and language (B3) as an alternative fuel. Innovations participated in various aspects of operations contributing to cost savings in the year 2014 the potential operational cost savings of innovation reached around Rp 777 billion.
Consumer Need Fulfillment
Facing the market competition, Semen Indonesia joint venture subsidiaries continue to strengthen the brand (brand), so always be the first choice of consumers. The strategy carried out, among others, with various forms of marketing communication to strengthen the position of the product or brand and maintain customer loyalty. The practice of marketing communication held with regard to the applicable law. Semen Indonesia and its subsidiary entities never get legal sanctions related to the allegation related offenses marketing communications.
Another effort is to implement quality control and Indonesian National Standard (SNI). Until the end of 2014, there was no cement products are banned or withdrawn from circulation. During 2014, the Company never get a financial penalty or other legal sanctions, related to alleged violations of the inclusion of product information. Semen Indonesia periodically and each subsidiary entities carrying out customer satisfaction index surveys or customer satisfaction index (CSI). The next survey results into consideration to improve quality products and services to customers. Customer complaints resolved.
No less important is the Company must able to keep the supply chain from material procurement processes, production processes and distribution. The Company acts as the parent company, while the subsidiary as the operator company. The Companies that are involved in the supply chain are the companies at national and international levels.