JAKARTA, NNC - State-owned cement manufacturer Semen Indonesia (IDX:SMGR) has been able to obtain positive sales performance amid tight competition in the domestic cement industry.
The company's cement sales volume reached 20.67 million tons, or growing four percent compared to the same period last year of 19.88 million tons.
The sales consist of domestic sales worth 16.93 million tons, exports of 1.99 million tons, and sales of Thang Long Cement Company Vietnam (TLCC) of 1.75 million tons.
At present, the dynamics of the cement industry in Indonesia have undergone a shift with the entry of 8 new players since 2015, of which previously there were only 7 cement producers.
The existence of these new players causes an over capacity in Indonesia of 30 million tons, where the level of industrial utilization in 2017 is only 65 percent.
SMGR Director of Marketing & Supply Chain Adi Munandir said the company continued to carry out various strategies to win the competition.
SMGR saw a potential improvement through strengthening the function of Semen Indonesia as a Holding Company.
"We no longer see that Semen Indonesia consists of 3 cement companies in Indonesia that are separated and focused on optimizing the performance of Semen Indonesia in a consolidated manner," Adi said on Tuesday (09/19/2018).
Adi Munandir added, since January 2018, all marketing and supply chain activities were focused on the Holding Company. We ensure that there are no more double brands owned by SMGR that compete with each other in the same market.
"This happened before where we can find the Semen Gresik and Semen Padang brands competing in Jakarta, or Semen Gresik and Semen Tonasa which are both sold in Bali. This condition will add to the competitive pressure in the market and result in competitive selling prices," said Adi.
SMGR rerouting of distribution channels that are able to provide the most efficient transportation costs. SMGR also renegotiated partners with transportation service providers to adjust what type of contract was more efficient for the company.