JAKARTA - With competition on the rise in the cement industry, Indonesia’s second largest cement producer PT Indocement Tunggal Prakarsa Tbk (INTP), according to President Director Christian Kartawijaya, the company needs to keep a watchful eye on its margins.
He commented, “In the beginning of January 2015, it was told that we have to change our strategy by tightening our belts. By lowering fixed cost, minimizing the expenses, logistics expense, in order to maintain our margins as good as possible,” at the company’s public expose in Jakarta, March 2016.
They have initiated several strategies to cut costs according to him. Indocement’s new operations in Citerup will save logistic costs of transport of cement to Bandung, which was previously sourced from their plant in Cirebon. He also added that a newly installed 73MW Siemens turbine will help save electricity costs.
On the issue of reducing power costs, the company’s coal fired 55 MW power plant in Tarjun, Kalimantan is cheaper than the cost of the electricity when compared to other operations. He added, “Unfortunately in the Kalimantan area, the market is small, so we need to deliver from there by ships,” which ultimately doubles the costs of handling.
Furthermore, management expects to increase their market penetration in the Pontianak area with a new packing terminal set to start operations in April 2016. (CH/WY)