SMGR 2015

Macro
In 2015 the global economic growth declined as china’s economic growth at the lowest point in the 18 years. The slower growths were also occurred in India, Japan and Brazil. The positive growth was reached by USA as the government was successfully developing shale oil exploration in US. As the result of that the oil price dropped due to booming of shale oil production in US.
The slower global economic growth also decreased the commodity price as the demand for commodity dropped.

The fed fund rate increased on December 2015 as the central bank saw the positive trend in economic condition at US. Therefore, the rupiah exchange rate in 2015 was weaker than the exchange rate in 2014. The higher interest rate in US and the decrease of commodity price weakened rupiah exchange rate 12 % in comparison with exchange rate in 2014. The situation got the central bank decided to not decrease the interest rate in 2015. With that strategy central bank was successfully controlling the inflation rate in 2015. It was at 3.35 percent, in 2014 the inflation rate was higher than 2015, it was at 8.36 percent.

The economic growth of indonesia in 2015 was at 4.7 percent or it was lower than the growth in 2014 which was at more than 5 percent. the high interest rate decreased loan growth in 2015, the loan growth in 2015 only reached 10.1percent, and it compelled the investment declined.
In 2015 the total production of cement decreased 2.48 % due to slower growth indonesia. The consumption of cement slightly increased 0.85 % in 2015. In 2014 the consumption reached 6.75 %, higher than 2015. The higher consumption growth was from east indonesia region which contributed more than 6.7 % growth.

Company
In 2015 the company experienced a decline in its total sales; it dropped 0.1 percent down in comparison with total revenue in 2014. However, for non cement product, the sales increased more than 20 percent.

The decrease in sales growth was occurred due to slower economic growth in 2015, the slower growth of consumption decreased the revenue of cement product. Although slower trend was occurred in 2015, the company developed two factories in 2015 in Padang, west Sumatra and in Rembang, central java. The new factories will add the production capacity from  29.5 million tons to 35.5 million tons.

The market share of the company decreased from 43.7 % in 2014 in to 43 % in 2015, even though the company still could defense its market share in Java island which was at 38.7 % of total market share.

In spite of the sales dropped, the volume of sales increase, its organic growth was at 0.6 % up. COGS and operating expenses in 2015 declined compared to COSG and operating expense in 2014. The higher cost was happening due to higher exchange rate in 2015, the company should import spare part and higher electricity cost.

The company has 4 locations of integrated cement plant, 2 locations of grinding plants, 30 location of warehouses, 26 location of packing plant and 12 location of ports.
The company is also having subsidiary in Vietnam which run in cement business, Thang Long cement joint stock company.