Holcim Indonesia secures IDR4bn loan

PT Holcim Indonesia has secured a IDR400bn (US$34.09m) loan from Bank Sumitomo Mitsui Indonesia which it plans to use for working capital, Reuters quoted the cement producer's CEO, John Ginley, as saying.

The firm is currently working on Tuban Line II in East Java, with a capacity of 1.7Mta, which is expected to start operations in the first quarter of 2015. The new line is identical to Tuban Line I which was officially launched last month.

First-half performance
Gross profit was marginally higher at IDR12bn over the same period last year, impacted by cost pressures including government-announced increases in electricity prices. Operating profit was 14 per cent lower at IDR674bn, in view of higher distribution costs, however a strengthening of the Rupiah during the first half 2014 contributed to a smaller differential of 3.8 per cent in Holcim’s net profit for the period at IDR449bn.

Second half operational outlook
On its outlook, the company stated that additional production from the commissioning of the new Tuban plant positions it to capitalise on any post election pick-up in market activity. In addition, the company will benefit from the effect of recent price increases to support sales revenue growth over the remainder of the year. Higher distribution costs – relating to clinker shipments in the first half, ahead of Tuban’s commissioning – will no longer apply for the rest of the year. "Instead, Tuban’s presence will shorten delivery times and lower costs to serve to both the large East Java market and to inter-island including the fast growing markets such as Kalimantan and Sumatra," Holcim Indonesia said in a statement.