Semen Gresik, Indonesia’s largest cement producer, estimates its net income may have risen by 10 per cent last year and its revenue by 12 per cent on improved efficiency and rising sales, a top executive. The final figures are expected to be released next month.
Dwi Soetjipto, the company’s President Director, said that in 2011 profit had likely increased to Rp 3.99 trillion (USD423 million) from Rp 3.63 trillion the previous year, and that revenue had likely risen to Rp 16.06 trillion from Rp 14.34 trillion.
Cement sales are an indicator of economic growth, and rising demand by the country’s property and construction sectors helped increase sales last year. Indonesia’s USD706 billion economy, which is forecast to expand by 6.3 per cent this year, may have expanded by 6.5 per cent in 2011, according to Bank Indonesia.
The central bank in December kept its key interest rate at 6 per cent, the lowest level since it was introduced in July 2005, after trimming it by a total of 75 basis points in November and October, and has maintained that policy rate this month.
Cement sales rose 12.4 per cent to 49.25 million tonnes last year from 43.69 million tonnes in 2010, according to data recorded.
That was more than the forecast made by the Indonesian Cement Association.
Urip Timuryono, the Association’s Chairman, said in December that cement sales may have risen to 46 million tonnes last year. The country sold 40 million tonnes in 2010, when the economy expanded by 6.1 per cent.
Dwi said cement production at Semen Gresik was 19.8 million tonnes last year. Total capacity was 20 million tonnes.
“Production capacity is expected to increase this year in line with the completion of upgrades to some of our facilities,’’ Dwi said.
Sales are expected to increase to a range of 22.5 million to 23 million tonnes this year. Gresik sells all cement that it produces. Dwi says its Tonasa and Tuban plants are expected to boost the company’s production and sales this year.
“Each plant is forecast to contribute three million tonnes each,” he said.
Dwi said last September that Semen Gresik was building new plants in East Java and South Sulawesi. They will have a combined annual production capacity of five million tonnes.
In December, Urip said cement sales would be flat this year, citing the impact of the global economic slowdown. He said cement sales were forecast to increase by 6 per cent in 2012.
Shares of Semen Gresik fell 2.1 per cent to Rp 11,600 on the Indonesia Stock Exchange on Tuesday. The stock is down 1.75 per cent this year.
Semen Gresik, like all Indonesian publicly traded companies, is expected to announce full-year profits in February. The cement maker is said to be selling USD500 million in global bonds in the second half of the year.
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