Semen Baturaja eyes 20% rise in sales volume

Palembang-based cement producer PT Semen Baturaja is targeting a 20 percent increase in sales volume to 1.5 million tons this year to meet higher demands from southern Sumatra.

The company’s production will get a boost from its new plant which is expected to start operating in the second half of this year.

Located in Baturaja, Ogan Komering Ulu regency, South Sumatra, the new plant will have an annual production capacity of 750,000 tons.

“Development projects remain strong in the southern part of Sumatra. That is why we will boost our production capacity,” Semen Baturaja corporate secretary Zulkifri Subli said during a telephone interview on Wednesday.

At the moment, the state-owned company has three factories — in Baturaja and Palembang, South Sumatra and in Panjang, Lampung — which produce Portland cement type I and composite Portland cement.

With its current production capacity at 1.25 million tons per year, Semen Baturaja serves customers in southern Sumatra as well as those in Banten.

From its higher sales volume target, the company expects to book a 20 percent rise in total revenues by the end of the year. Meanwhile, its net profits target is set at Rp 345 billion (US$35.77 million), up 17.7 percent from 2012.

Semen Baturaja will also build another cement factory this year with a production capacity of 1.5 million tons. The construction will be partially funded from its upcoming initial public offering (IPO).

The company had previously expected to hold the IPO in 2012. However, several lengthy discussion sessions at the House of Representatives made the firm unable to realize its share sale plan as expected.

As a state-owned firm, Semen Baturaja was required to get lawmakers’ approval. It finally got the green light on Monday and it is looking to list its shares on the Indonesia Stock Exchange (IDX) in June.

As reported before, the company plans on gaining Rp 1 trillion by releasing a maximum of 35 percent of its enlarged shares to the public. According to Zulkifri, it has not yet decided the final shares figure to sell.

“That [the share figure] will depend much on the market situation. If we can get the funds by selling only 20 percent of the shares, we will just release 20 percent,” he said.

Currently, Semen Baturaja is working closely with its underwriters to update its financial statements. The underwriters appointed for the IPO are state-owned securities firms PT Bahana Securities, PT Mandiri Sekuritas and PT Danareksa Sekuritas.

Bahana Securities president director Eko Yuliantoro said that no targets had been set regarding Semen Baturaja’s future investors as the firm was awaiting a coordination meeting with all related parties. Bahana Securities is the lead underwriter for the IPO.

The targeted IPO funds will be used to finance 40 percent of the second factory’s construction costs. The other 60 percent of the funds will be generated from Semen Baturaja’s internal cash and bank loans. The factory is scheduled to begin operations in 2017.

Meanwhile, according to its unaudited 2012 financial report, the company recorded Rp 1.1 trillion in total revenues, a 5 percent increase from 2011. Its net profits climbed 17 percent to Rp 293 billion.

As of December 2012, its total assets reached Rp 1.2 trillion, while its liabilities and equities amounted to Rp 252 billion and Rp 948 billion, respectively. (Tassia Sipahutar/The Jakarta Post)