SIG And SMBR Integration Support The Development Of The Semen Industry In The Country

Photo: Doc. Semen Indonesia Group (SIG)

JAKARTA - The integration of the BUMN Sub-Cluster Semen between PT Semen Indonesia (Persero) Tbk (SIG) and PT Semen Baturaja (Persero) Tbk (Semen Baturaja) is an initiative to support the development agenda that has been launched by the government and the development of the cement industry in the country.

This integration is expected to increase capability in meeting cement demand in line with post-pandemic economic recovery, as well as support the smooth supply and distribution of adequate cement for national development through strengthening the position of state-owned company Semen.

SIG's Director of Finance and Risk Management, Andriano Hosny Panangian said that cement is an important commodity to support the smooth running of national development projects, where the role of SOEs is very strategic.

The joining of Semen Baturaja as part of GIS will increase capabilities in fulfilling cement demand and strengthen the position of BUMN Sub Cluster Semen in dealing with competitive market conditions.

Semen Baturaja's integration into GIS was carried out through a rights issue mechanism. As the majority shareholder with 51.01 percent ownership, the Indonesian government will take part in this corporate action through inbreng transactions by transferring 7,499,999,999 Series B shares or representing 75.51 percent of all issued and fully paid capital in SMBR.

Meanwhile, the public portion will be deposited in cash. The inbreng transaction will make SIG the majority shareholder in SMBR.

GIS will utilize funds obtained from Rights Issue for the ESG (Environmental, Social, and Governance) program to support the company's performance, through the initiative to add facilities to increase the use of fuel and alternative raw materials, the construction of preparation facilities for the use of waste into environmentally friendly alternative fuels, as well as business development.

"The integration between GIS and Semen Baturaja will further strengthen GIS's steps as a company providing leading building material solutions in the region, along with increasing market share, increasing product portfolios, and wider distribution networks. This integration step is predicted to provide added value through efficiency and synergy reaching IDR 1.65 trillion from 2022 to 2026," said Andriano Hosny Panangian, Thursday, December 15.

Furthermore, Andriano Hosny Panangian said, GIS has four main strategies that have proven effective in current conditions, including encouraging sustainable growth, closer to customers through a variety of environmentally friendly products and solutions, increasing operational excellence and digitizing value chains, and leadership in the domestic market.

"SIG is committed to implementing the principle of sustainability and continuing to innovate in creating quality and environmentally friendly products and solutions to create economic benefits and build competitive advantages of GIS in the market, while maintaining the resilience of the company's business in the future," said Andriano Hosny Panangian.

In the period January to September 2022, SIG has consistently managed to record an increase in performance amid high industrial competition challenges and an increase in fuel and energy prices. The absolute EBITDA was recorded at 0.6 percent higher to Rp5.73 trillion and the EBITDA margin increased 0.1 percent to 22.7 percent.

Net profit for the year attributable to owners of the parent entity rose 18.9 percent to IDR 1.65 trillion, and the net profit margin increased 1.0 percent to 6.5 percent compared to last year.

GIS also proves resilience not only from business achievements, but also sustainable operations that are the competitiveness of the Company. Until September 2022, SIG managed to reduce carbon emissions by 2.1 percent compared to the same period last year, which was contributed by a 1 percent decrease in the cluster factor, and an increase in TSR by 1.6 percent. This is in line with the commitment of SOEs in supporting and implementing energy transitions and implementing energy sustainability principles for the future.