Make The Green Cement A 'Game Changer', GIS Creates Growth Opportunities Through Environmentally Friendly Products

GIS President Director Donny Arsal at the Public Expose Live 2024 event, Friday 30 August. (Photo: Doc. SIG)

JAKARTA - PT Semen Indonesia (Persero) Tbk (SIG) continues to focus on encouraging green cement as a catalyst for sustainable performance growth. In Public Exposure, Friday 30 August, GIS President Director Donny Arsal said that green cement produced with materials and environmentally friendly processes is SIG's competitive advantage to maintain leadership in the industry, along with increasing public awareness and the government's encouragement in the use of environmentally friendly building materials.

"The lower carbon GIS green cement is a differentiating factor from conventional cement. The advantages in this sustainability aspect make GIS a game changer that changes the direction of the industry moving towards the green industry. This is important to create business opportunities that contribute positively to performance growth, in the midst of tight market competition conditions," said Donny Arsal.

As industry leader with the largest market share in Indonesia, GIS has seven strong cement brands and is the market leader in its respective regions, including Semen Gresik, Semen Padang, Semen Tonasa, Dynamix, Semen Andalas, Semen Baturaja, and Thang Long Cement. In addition to being certified by SNI and containing more than 90% of the domestic component (TKDN), GIS products have also obtained Green Label certificates from the Green Product Council Indonesia.

GIS also runs a number of other business lines as a form of product and service diversification development, such as cement derivative business lines which include ready-to-use concrete, and preprints, mortars, as well as end-to-end business ecosystems which include mining, packaging, environmentally friendly waste management, logistics, information technology services, and industrial estates.

SIG operations are supported by integrated cement factories in 9 locations, packaging factories in 26 locations, 8 cement milling factories, and 7 ports. Meanwhile, the distribution line is strengthened by 385 distributors both in Indonesia and in Vietnam (TLC), as well as around 70,000 retail stores in Indonesia. This extensive operational infrastructure network allows SIG to support development throughout the region and even remote areas in Indonesia.

Donny Arsal added that the national cement industry has good prospects following the demand for cement for the IKN (Nusantara Capital) project and other strategic projects, as well as the government's efforts to accelerate the provision of housing for the community to overcome the backlog number of house ownership in Indonesia which reached 9.9 million units in 2023.

In the construction of IKN, since December 2022 - July 2024, GIS has contributed by supplying 695,000 tons of cement used in a number of projects. SIG also presents environmentally friendly landed housing in IKN in the form of a type 36 MBR house built using an interlock brick from GIS green cement.

The SIG interlock Bata has been tested adequate for application in areas with a high level of seismicity (KDS D) in accordance with the 2D Modular Cyclic test standards from PUSKIM PUPR. The presence of this interlocked brick is expected to be a solution to support the Government in providing decent housing for people who can be built faster and more efficiently.

The volume of cement needs and other very high construction raw materials at IKN, made GIS not only cooperate by supplying construction contractors, but also included in the consortium of PT Karya Logistik Nusantara (KLN) which is a consortium of BUMN Karya which will supply concrete, all raw materials and logistics management in IKN development.

SIG conducted a capital investment of Rp. 22.5 billion to PT Karya Logistik Nusantara (KLN) through a rights issue scheme carried out by KLN. Thus, GIS is included in the KLN's shareholder with a share ownership portion of 20.9% and strengthens the Company's position to supply building materials and sustainable solutions for development projects at IKN.

In addition to growth opportunities in the domestic market, SIG is also targeting increased exports through a jetty development project and special type cement production facility in Tuban, East Java, which is planned for operations by 2025. The project, which is one of the realizations of SIG's strategic cooperation through its subsidiary, PT Solusi Bangun Indonesia Tbk with Taiheiyo Cement Corporation, is intended to meet export needs of a minimum of 500 thousand tons per year in the United States market.

Meanwhile, Director of Finance & Management of Portfolio SIG, Andriano Hosny Panangian said, GIS continues to strive to achieve increased operational excellence by encouraging optimization of distribution activities, efficiency of coal consumption index, increasing the use of alternative energy, as well as efficiency of operating costs and financial costs to optimize profitability.

Until the first semester of 2024, SIG managed to maintain a positive profitability performance achievement by posting revenues of IDR 16.41 trillion and profit for the current period of IDR 503.49 billion. SIG is also able to maintain financial resilience by recording cash flow from positive operations, so as to reduce debt balance and maintain a healthy solvency ratio.

This is considered as a strong and superior ability (superior) to fulfill the long-term financial commitment to the debt effect, so that GIS received an increase in ranking from PT Pemeringkat Efek Indonesia (Pefindo) to IdAA Stable from the previous positive idAA+.

"Healthy financial conditions are reflected in the increase in GIS to idAAA rankings with stable outlooks which are the highest rankings of Pefindo, as well as the entry of GIS in the I-Grade Index constituent list," said Andriano Hosny Panangian.