Report of the President Commissioner
The year 2024 continues to be a year full of challenges. The global economy is still overshadowed by various uncertainties. Inflation rates remain relatively high, although they are beginning to moderate. Global economic uncertainty affects Indonesia's economic growth. Indonesia's economy in 2024 is recorded to have grown by only 5.03%, below the government's target of 5.2%. Several factors contributing to this include a significant decline in exports in the second half of 2024. The decline in global commodity prices has impacted exports, which have been one of the main drivers of Indonesia's economy.
The Board of Commissioners fully understands that the domestic cement market still faces several challenges. We appreciate the efforts of the Board of Directors in maintaining sustainable growth, as seen in the positive performance trends in both operations and finance. This is the result of the hard work of the Board of Directors and the entire Company team, which focuses on four strategic pillars: Operational Excellence, Sustainable Development, Process and Assets Optimization, and People & Leadership. The Company continues to strive to create effective and efficient operational patterns, implementing various innovations to improve operational excellence in every aspect of its operational activities.
Fadlansyah Lubis
2024 Performance
In 2024, total cement production volume was 10.76 million tons, down 1.1% from 10.88 million tons in the previous year. The Company's production facility utilization rate reached 72.4%, which was better than the national cement industry utilization rate of 56.5%. The Company posted revenues of IDR 11.82 trillion, down 4.5% from IDR 12.37 trillion in 2023. The Company's revenue composition came from contributions from cement sales (88.8%), ready-mix concrete (9.7%), aggregates (1.1%), and other construction services (0.4%). The sales volume of cement and clinker was 13.19 million tons, down 4.9% from 13.86 million tons in 2023, generating revenue of IDR 10.49 trillion, down 4.2% from IDR 10.96 trillion in the previous year. Ready-mix concrete sales amounted to 1.45 million m3, down 5.4% from 1.53 million m3 in 2023, generating revenue of IDR 1.15 trillion, down 5.8% from IDR 1.22 trillion. Aggregate sales amounted to 1.12 million tons, up 29.5% from 0.86 million tons, and contributed revenue of IDR 130.47 billion, up 37.3% from IDR 95.00 billion. Meanwhile, revenue from construction services amounted to IDR 43.42 billion, down 55.0% from IDR 96.42 billion. The company reported a net profit of IDR 745 billion, down 17.3% from IDR 894.65 billion in the previous year. The Board of Commissioners noted that the Board of Directors had implemented SIG's strategy well. The combination of cost efficiency and operational excellence strategies can generate cost of goods manufactured (COGM) best practices, thereby supporting SIG's marketing and sales strategy.
Business Strategy Initiative 2024
The Board of Commissioners appreciates the Board of Directors' commitment to maintaining quality operations and implementing sustainable mining practices. In 2024, the Company received the Good Mining Practice award from the Ministry of Energy and Mineral Resources for its three plants in Narogong (West Java), Lhoknga (Aceh), and Tuban (East Java). The Company's consistency in conducting business based on sustainability principles was once again recognized with PROPER awards from the Ministry of Environment (KLH). Two Gold PROPER awards were received by the Cilacap Plant and the Lhoknga Plant, respectively, and one Green PROPER award was received by the Tuban Plant. The achievement of Gold and Green PROPER awards is a recognition of the Company's concrete efforts in implementing sustainability principles that go beyond regulatory compliance, by bringing benefits to the environment and empowering communities in the areas surrounding the Company's operations. The Gold PROPER award won by the Cilacap Plant is the eighth Gold PROPER award for the Cilacap Plant, thanks to its innovation in managing waste into environmentally friendly alternative fuels.
Prospects and Innovations in Facing Business Challenges 2025
The Board of Commissioners considers the business plan and prospects prepared by the Board of Directors to be quite good and has the potential to be a solution to various obstacles currently faced by the Company. The plan to export cement to the United States is expected to be realized in 2025 after the completion of the port development and production facility project in Tuban. This strategic project will boost the Company's cement export sales and be able to meet export market demand of up to one million tons per year, thereby increasing the utilization of the Company's factories.
Implementation of Corporate Governance
The Board of Commissioners continues to encourage the implementation of good corporate governance (GCG) in the Company through the Audit Committee's monitoring and evaluation mechanisms, in order to maintain the Company's compliance with applicable laws and regulations. Periodically, the Board of Commissioners receives evaluation results on the effectiveness of internal control and risk management conducted by the Audit Committee in collaboration with the Internal Audit Division. The evaluation results and recommendations for improvement are submitted to the Board of Directors for follow-up. In the view of the Board of Commissioners, GCG practices in the Company are running well with an effective governance structure consisting of main organs, supporting organs, and infrastructure in the form of the Joint Governance Policy of PT Solusi Bangun Indonesia Tbk and Consolidated Subsidiaries, Business Ethics Code of Conduct, Charter, Company Policies and Procedures, Violation Reporting System, and so on. In 2024, the Board of Commissioners and the Board of Directors issued a policy to harmonize the Good Corporate Governance Guidelines and the Company's Code of Business Ethics.
Changes in the Composition of the Board of Commissioners
Appreciation
Report of the President Director
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