Semen Indonesia is looking to expand its cement production capacity in Indonesia through both organic and inorganic growth. Domestically, the retail housing sector drives the largest demand for cement. Semen Indonesia currently holds a 44% market share but will need to increase production capacity to 70MT by 2030 to maintain this level given projected market growth rates between 5.7-7.1% annually. However, building new plants presents challenges due to limited resources and land issues. Therefore, Semen Indonesia is pursuing a globalization strategy that includes acquiring foreign cement companies to quickly gain new supply and production capacity for international expansion.
Semen Indonesia is looking to expand its cement production capacity in Indonesia through both organic and inorganic growth. Domestically, the retail housing sector drives the largest demand for cement. Semen Indonesia currently holds a 44% market share but will need to increase production capacity to 70MT by 2030 to maintain this level given projected market growth rates between 5.7-7.1% annually. However, building new plants presents challenges due to limited resources and land issues. Therefore, Semen Indonesia is pursuing a globalization strategy that includes acquiring foreign cement companies to quickly gain new supply and production capacity for international expansion.
Semen Indonesia is looking to expand its cement production capacity in Indonesia through both organic and inorganic growth. Domestically, the retail housing sector drives the largest demand for cement. Semen Indonesia currently holds a 44% market share but will need to increase production capacity to 70MT by 2030 to maintain this level given projected market growth rates between 5.7-7.1% annually. However, building new plants presents challenges due to limited resources and land issues. Therefore, Semen Indonesia is pursuing a globalization strategy that includes acquiring foreign cement companies to quickly gain new supply and production capacity for international expansion.
J akarta Convention Center May 2013 SEMEN INDONESIA INDONESIA CEMENT MARKET 564 Bag 80% Housing Cement-based Industry Ready Mix Fabricator Projects Bulk 20% Retail (residential) sector is the largest cement consumer in Indonesia Key drivers for domestic cement demand: National Economic Growth Favorable Interest Rate Environment Infrastructure Expansion Per-capita Consumption Increase from Current Low Level Indonesia Cement Consumption History MT *Line shows market growth in percent SEMEN INDONESIA CAPACITY MAP SMGR
2 1 3 4 5 1 1 6 7 THE PLAYERS and CAPACITY (2013) SEMEN INDONESIA MARKET GROWTH This forecast implies an Semen Indonesia capacity requirement of 70 MT by 2030 (with 90% capacity utilization) Pesimist 5.7% Moderate 6.5% Optimist 7.1% Annual Growth Rates Indonesia Cement Market Growth 2010 - 2030 MT Sales SI (44,0% Market Share) Pesimist Moderate Optimist 161 144 124 63 SEMEN INDONESIA MARKET CHALLENGE MT 29,5 70,0 Build 1 New Plant Every Year Semen Indonesia Capacity Requirement CHALLENGES: Limited natural resources Land clearance issue Long construction time ( 3 years) Challenges of Acquiring Foreign Company 1. Different nature of business, company culture, & government regulation 2. Aligning business & reporting system (e.g. ERP system) ACQUISITION Maintain 44% market share in Indonesia Inorganic Growth Increased number of customer & sales revenue SEMEN INDONESIA MARKETING STRATEGY BRAND ACQUISITION Market Entry Strategy Using local existing brands, which have strong value in their respective market LOCAL BRAND Domestic Branding Strategy Entering Vietnam market through local existing brand (Thang Long) ALTERNATIVE BRAND Regional Market Entry Strategy (S.E. Asia) New brand will be used to enter regional market outside Vietnam & Indonesia Acquisition of foreign company Quick source of supply to fulfill 44% Indonesia market share Foundation for global market expansion SEMEN INDONESIA SEMEN INDONESIA SUPPLY MAP THANK YOU Main Office: Main Building of Semen Gresik Jln. Veteran Gresik 61122 Indonesia Phone: (62-31) 3981731-2, 3981745 Fax: (62-31) 3983209, 3972264
Representative Office: The East Building, 18th Floor, Jln. Lingkar Mega Kuningan Kav. E3.2 No. 1, Jakarta 12950 Indonesia Phone : (62-21) 5261174 5 Fax : (62-21) 5261176 www.semengresik.com
Antipode Volume 43 Issue 5 2011 (Doi 10.1111/j.1467-8330.2011.00900.x) Michelle Yates - The Human-As-Waste, The Labor Theory of Value and Disposability in Contemporary Capitalism