Gresik sees 20% 1Q12 rise, aims to increase market share

In the first quarter of 2012, Semen Gresik earned IDR4.28trn (US$466m) in revenue, a 20 per cent increase from IDR3.55trn during the same period last year and hopes two new plants that are set to become operational this year will help the company regain higher market share.

Commenting on the rise in revenue, the Jakarta Post reports Agung Wiharto, Semen Gresik investor relations chief as saying: "The increase in revenue was supported by growing production volume and higher cement prices."

Semen Gresik, along with its subsidiaries Semen Padang and Semen Tonasa, produced 4.96Mt of cement during the January-to- February period this year, increasing by 14 per cent from 4.34Mt over the same period last year.

According to the Indonesian Cement Association, cement consumption reached 12.5Mta in 1Q12, representing an increase of 18 per cent from 10.57Mt the previous year. Based on these figures, Semen Gresik's market share stood at 39.3 per cent.

"We are seeing declining market share from year to year because we have had no increase in production capacity. We held 44 per cent market share three years ago. We are hoping that new cement plants will help us grab higher shares in the market," Agung said.

Semen Gresik announced in early April that it had completed the construction of a new 2.5Mta cement plant named Tuban IV, which is set to begin production in May, Agung said.

"Tuban IV is expected to produce 1.5Mt of cement this year," Agung said. Semen Gresik is also waiting to commence operation of another new plant called Tonasa V in Pangkep, South Sulawesi, which will also have annual production capacity of 2.5Mt. According to Agung, Tonasa V will start production in September or October and produce 500,000t by year-end.