JAKARTA - PT Semen Indonesia (Persero) Tbk (SMGR) is making efforts to lower its cost of goods sold after the acquisition of PT Solusi Bangun Indonesia Tbk (SMCB) through market integration and operational efficiency this year.
Semen Indonesia Marketing GM Johanna Daunan said that the company is reducing logistics expenses by acquiring cement from its plant in Narogong, West Java. "After the acquisition, we stopped delivering cement from our East Java plant to the West Java market. It is more efficient to acquire cement from our own West Java plant because the region is one of Indonesia's largest cement markets," she said.
In addition, the company has pocketed a Rp 9.3 trillion loan facility to repay its debt and issued a Rp 4.9 trillion bond. "This has lowered our interest expenses by more than 1%. With a Rp 13 trillion loan, the interest expenses can be lowered," Ms Daunan added.
In the first quarter of 2019, the company's interest debt was recorded at Rp 33.63 trillion, up from Rp 9.86 trillion on December 31, 2019. Its gross debt to equity ratio was recorded at 105.4%, up from 31.6%.
In November 2018, the company acquired a 80.6% stake previously owned by Holderfin BV in Holcim Indonesia for Rp 13 trillion. The company used a bank syndicated loan to purchase the stake. (LK/MS)