Kontak

Report of the President Commissioner

Conducting business operations in the midst of contracting market conditions with high energy costs and rising raw material prices is certainly not easy to execute. Appropriate strategic initiatives are required by the Company’s management that focus on revenue optimization and cost containment.

The implementation of this focus has been very significant for the Company with its success in maintaining the positive trend of business performance in 2022. Through the synergy with its holding company, SIG, SBI recorded a 9.3% increase in revenue to IDR12.26 trillion and a 17.65% increase in net profit to IDR839 billion compared to 2021.

The success of the Board of Directors and staff in maintaining business performance is due to the efforts to optimize resources and innovations in all lines to create consistency in the Company’s positive performance despite the intense market competition and price increases, especially fuel, which are heavily felt by the cement industry. This success certainly should be appreciated where the Company managed to build new resilience after successfully passing the challenges of business contraction during the Covid-19 pandemic.

Conducting business operations in the midst of contracting market conditions with high energy costs and rising raw material prices is certainly not easy to execute. Appropriate strategic initiatives are required by the Company’s management that focus on revenue optimization and cost containment.

The implementation of this focus has been very significant for the Company with its success in maintaining the positive trend of business performance in 2022. Through the synergy with its holding company, SIG, SBI recorded a 9.3% increase in revenue to IDR12.26 trillion and a 17.65% increase in net profit to IDR839 billion compared to 2021.

The success of the Board of Directors and staff in maintaining business performance is due to the efforts to optimize resources and innovations in all lines to create consistency in the Company’s positive performance despite the intense market competition and price increases, especially fuel, which are heavily felt by the cement industry. This success certainly should be appreciated where the Company managed to build new resilience after successfully passing the challenges of business contraction during the Covid-19 pandemic.

Prijo Sambodo

Company Performance in 2022

In 2022, SBI placed four focuses on its business strategy which include Operational Excellence, Sustainability Development, Process and Assets Optimization and People & Leaders. These four focuses represent the Company’s efforts to achieve its objectives such as profit improvement, sustainable operations, enhancement and utilization of its competitive advantage and achievement of the SDG targets by 2030.

The Board of Commissioners observed that the Board of Directors and its staff have been committed to achieving these initiatives. In terms of the four focuses, the Company has realized several efforts such as increasing factory utilization related to export market expansion commitments realized with the development project of docks and cement production facilities in Tuban. This project itself was the realization and follow-up of the strategic partnership between SBI and Taiheiyo Cement Corporation (TCC) agreed in the previous year. This project projected to be able to meet export demand of up to 500 thousand tonnes of cement per year and complement the Company’s ability to expand its export market reach in synergy with SIG and TCC.

Another realization of the Company’s strategy was to ensure sustainable operations and performance. The Company realized this by closing the year 2022 with a golden note, by successfully achieving the Gold Rating in the 2022 Corporate Performance Rating Program in Environmental Management (PROPER) from the Ministry of Environment and Forestry of the Republic of Indonesia.

This is the seventh time the Cilacap Plant has achieved this award. Meanwhile, SBI’s three other plants located in Narogong (West Java), Tuban (East Java), and Lhoknga (Aceh) achieved Green PROPER. The four SBI-owned plants also received the Green Industry Award 2022 from the Ministry of Industry of the Republic of Indonesia.

This achievement is the result of the Company’s commitment to achieving sustainability targets as outlined in its roadmap which focuses on energy efficiency from energy management, and accelerating the achievement of carbon emission reduction targets through the utilization of alternative fuels including Refuse-Derived Fuel (RDF), initiation of a solar panel project at the Tuban Plant, and a hydrogen injection project in 2023 to reduce fossil fuel use and carbon emissions as committed by the government. To complement this, all of these efforts are also supported by the optimization of digitalization to improve plant efficiency.

The Board of Commissioners has also appreciated the Company’s efforts in cost efficiency through a 38% reduction in interest expense as a result of the restructuring of syndicated loans by accelerating payments. This step is certainly a good step for the Company in establishing a priority scale policy in terms of liabilities.

Business Strategy Initiatives

After the past few years, the business world was faced with the Covid-19 pandemic situation which significantly affected business performance, post-pandemic the global and national economy gradually recovered. The Covid-19 pandemic indirectly encouraged every single business actor to be able to survive by adapting to every situation. SBI has proven its ability to adapt and maintain the positive trend of its business performance and reposition its business and financial performance in accordance with the pre-pandemic trend trajectory.

These efforts have been well implemented by the Board of Directors of the Company where this can be seen from the business and financial performance that SBI successfully recorded in 2022. Net sales increased by 9.3% and Net Profit increased by 17.65%. From the financial side, the Company in 2022 managed to record equity grew by 5.90%, while liabilities decreased by 7.52%.

For these achievements, the Board of Commissioners would like to express its appreciation to the Company’s Board of Directors. These achievements reflect the efforts to manage and organise all of the Company’s resources appropriately.

Prospects and Innovations in the Face of 2023 Business Challenges

In the Board of Commissioners’ view, the business outlook presented and prepared by the Board of Directors is measurably legitimate based on the analysis of relevant indicators. In 2023, important indicators in projecting business prospects can be seen from several aspects such as macroeconomics in the form of global and national economic challenges as a result of the Russia-Ukraine conflict and domestic political constellation, projected GDP growth and Construction GDP, infrastructure budget with estimated cement needs, especially related to the government’s plan for estimated cement needs in the IKN Project.

While on the technical side, the Board of Directors and staff have also carefully prepared an optimistic business plan based on the focus of the Company’s business strategy in four sectors, namely Operational Excellence, Process & Asset Optimization, Sustainable Development and People & Leaders as well as on the existing challenges contained in the work plan and budget and strategic initiatives in 2023.

The analysis is also reinforced by business and financial indicators such as market trends both domestic and export, new market penetration opportunities, provincial synergies and innovation, making the basis for analysis of future business projections more comprehensive and realistic to be realised.

Application of GCG Principles to Every Business Operation

Through 31 December 2022, there is no change in the composition of the Board of Commissioners. Therefore, the composition of the Company’s Board of Commissioners is still the same as the provisions of the EGMS dated 18 February 2022, which consists of:

Commissioner : Herudi Kandau Nugroho
Independent Commissioner : Prijo Sambodo

Board of Commissioners Structure Changes

Through 31 December 2022, there is no change in the composition of the Board of Commissioners. Therefore, the composition of the Company’s Board of Commissioners is still the same as the provisions of the EGMS dated 18 February 2022, which consists of:

•President Commissioner : Prijo Sambodo
•Commissioner : Herudi Kandau Nugroho 
•Commissioner : Yoshifumi Taura

Appreciation to All Related Parties

Business challenges will certainly take turns, however the Company’s ability to observe the situation and formulate the right steps to survive and continue to grow certainly comes from the commitment and integrity contributed by all SBI personnel. The Company’s ability to survive and grow during the Covid-19 Pandemic and the post- recovery macroeconomic situation has proven that the Company has resilience in adapting to existing business challenges. For the contributions made, on behalf of the Board of Commissioners, I would like to thank the

Shareholders for their support, the Board of Directors for their efforts in advancing the Company, and all employees for their contributions and dedication. In the future, I sincerely believe that the Company can be more resilient in maintaining its positive performance.

Report of the President Director

In the Managing Director’s Report you will find a comprehensive summary of the company’s performance over a given period.