GIS: Green Cement Lower Carbon Is A Different Factor From Conventional Ones

Semen Indonesia (Photo: Doc. Antara)

JAKARTA - PT Semen Indonesia (Persero) Tbk or GIS continues to focus on encouraging green cement. Where it became a catalyst for the company's sustainable business performance growth.

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," Donny said in Jakarta, Saturday.

Donny said that the national cement industry has good prospects following the demand for cement for the capital city of the archipelago (IKN) project and other strategic projects, as well as the government's efforts to accelerate the provision of housing for the community to overcome the number of backlogs for ownership of houses 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 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 participation 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 percent 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 from Pefindo, as well as the entry of GIS in the I-Grade Index constituent list," said Andriano.