INTP 2015

Company analysis

The slowdown in economic growth affected many industries included cement industry. The economic growth in 2015 stood at 4.7 % and it was slower than economic growth in 2014 which was at 5 % growth.

The drop of commodity prices in 2015 weakened coal mining industry and crude palm oil industry. As the result of that, the cement industry was also hit. Based on indonesia cement association, the cement consumption in 2015 only increased 1.8 % compared to the cement consumption in 2014. The total indonesia cement sales attained 61 million ton in 2015.

Mr. Jokowi, the president of indonesia ordered the state owned cement company to reduce the cement price in 2015, therefore, the private company needs to change its cement price. Indocement reduced the cement price to defense its market share in the market. State owned cement companies have more than 40 % market share. Mr. Jokowi intends to help the low income people to buy cement with lower price.

As the result of that revenue of the company in 2015 dropped -11 % in comparison with revenue in 2014. However, the company still kept its margin. The revenue breakdown of the company is as the following table :

Product	2015	2014	Change
Cement	Production: 17.3 million	Production: 18.5 million	-6.5 %
	tons	Tons
	Sales : more than 17.1	Sales : 18.5 million ton	-8 %
	million ton (domestic)
	Export: 108,480 ton	Export: 79.310 ton	36.8 %
RMC	Production: 3.3377 ton	Production: 3.947  ton	-14.4%
(ready mix concrete)	Sales : 3.377 ton	Sales : 3.947 ton
Agregat	Production: 2.6 ton	Production: 2.7 ton	-4 %
	Sales : 2.4 ton	Sales : 2.8 ton	-14 %

Cement is as the main products of the company, type of cements of the company are PCC (Portland composite cement), OPC (ordinary Portland cement), OWC (Oil Well Cement), white cement and TR-30 white mortar.

The company was owned by Birchwood Omina Ltd (51 %), Mekar Perkasa (13.03 %) and Public (35.97 %). Brichwood omnia Ltd is controlled by Heidelberg Cement AG which is listed at German stock exchanges.

In 2015 the company invested its fund to purchased fixed asset which comprised conversion of raw mill / kiln mill electrostatic precipitator to bag house at plant 9 in palimanan factory, installation of flue gas desulfurization at Tarjun factory, replacement of gas turbine with aero derivative gas turbine.

In the future the company expects the government infrastructure project will be realized, it will be an advantage for cement industry.