PT SEMEN INDONESIA (PERSERO) TBK Seizing Turnaround Momentum
8 December 2022
SEIZING TURNAROUND
MOMENTUM
SMGR Capital increase through Pre-emptive rights | 2 |
Semen Baturaja | 3 |
ESG Initiative | 6 |
Building Materials Expansion Program | 7 |
Transaction Update | 8 |
SMGR CAPITAL INCREASE THROUGH PRE-EMPTIVE RIGHTS
SIG will leverage Rights Issue to grow value and return to shareholders through SMBR integration, ESG initiatives, and potential expansion in basic material business
Rights Issue Information
Total
Proceed of Additional capital up to 5.6 IDR Tn*
Share
Issuance
Net proceeds from the Rights Issue will be used to expand
Objective company's position in the cement market, ESG initiatives & basic material business
Shareholder type
A | Government |
of Indonesia |
Participation & Use of Proceed
• Will exercise its rights through share swap | |
with its ownership on SMBR | |
• | SIG will receive 75.51% of SMBR |
ownership | |
• | Will participate in cash |
75.51%
SIG ownership in PT. Semen Baturaja Tbk (SMBR) post share swap
2.85 IDR Tn
SMBR valuation
based on fair value by independent appraiser & approved by Ministry of Finance through Finance Minister Decree
B | Public |
shareholder |
• SIG will receive gross proceeds from the |
public of up to 2.7 IDR Tn & use the |
proceeds to expand further with potential |
acquisition in ESG initiatives & basic |
material business |
Supporting 1.68 IDR Tn CAPEX investment for ESG initiatives:
- Thermal Substitution Ratio
- Clinker Ratio
Potential expansion in integrated basic building material that has:
- High EBITDA margin
- Significant growth opportunity
- High potential synergies
* Based on 100% participation and subscription | 2 |
SEMEN BATURAJA
- Cement sub cluster SOE integration will support SIG in domestic market dominance
Overview of SMBR (2021)
53%
market share
Legend: | |
x% | Market share by |
province | |
Manufacturing | |
facilities |
Integration Structure: SMBR Shares Transfer to SIG
Share Swap Process
Current Structure
South Sumatera market | 11% | |
leader with | ||
"Semen Baturaja" brand | Jambi | 1% |
4.55 Mn Tons | Bangka | |
13% | Belitung | |
Cement Capacity | ||
53% | ||
3 | ||
Bengkulu |
PublicPublic
48,99% | 51,01% | 24,49% | 75,51% | ||||||||||||||||||||||
+1 series A | |||||||||||||||||||||||||
Dwiwarna share |
"government participation in the SIG rights issue transaction is carried out on a non-cash basis through the transfer of all state-owned Series B shares in SMBR.."
2.7 Mn Tons | South | ||
Sumatra | |||
Clinker Capacity | 1 | 2 | |
29% | |||
Final Structure
Public
≤ 48,99%
≥ 51,01%
Plant | Plant Type | 4 |
Baturaja Plant | Integrated Plant; Clinker Manufacturing, | Lampung | ||
1 | 2 | Cement Grinding & Packing |
3 Palembang Plant Cement Grinding and Packing
Other SIG
subsidiaries
75,51%
+1 series A Dwiwarna share
4 Panjang Plant | Cement Grinding and Packing |
3
SEMEN BATURAJA
- Potential value creation from SMGR and SMBR integration
Operational Metrics
Increase Average Selling Price (ASP) Net
Sales & Marketing
Distribution Network Optimization | ||
(Cross-Selling) | ||
Supply Chain | Utilization optimization | |
Management | ||
Reduce CTS/Ton | ||
Decrease PCC Clinker Factor | ||
Production | Increase TSR | |
Best practice sharing | ||
Procurement | Best tariff & economies of scale | |
Others | ||
Refinancing Potential | ||
Assumption
- Change SMBR pricing strategy to align with SIG (main brand increase 2.2%, fighting brand increase 1.9%, every year)
- Utilize distribution network and potential cross selling
- PoS expansion to increase market penetration
- Supply market from facilities with the lowest cost-to-serve to reach higher utilization
- Shift production to be closer to customers to optimize distribution
- Decreasing SMBR PCC clinker factor from >70% to be at SIG level (~65%)
- Increase SMBR TSR usage from ~0.7% to reach SIG level of ~5%
- Higher purified gypsum composition (from ~70% to ~90%)
- Using lower calorific coal
- Installing plant optimizer
- Utilizing best tariff across all plants
- Better bargaining power from consolidated demand
- Potential decrease in SMBR interest rate (∆ of ~3%)
1-year | 5-year | |||
Impact | Impact | |||
(IDR Bn) | (IDR Bn) | |||
21 | 64 | |||
32 | 256 | |||
113 | 789 | |||
13 | 94 | |||
6 | 21 | |||
105 | 345 | |||
23 | 87 | |||
34 | 113 | |||
347 | 1,769 | |||
>1.7
IDR Tn
potential value
creation in 5
years
4
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Disclaimer
PT Semen Indonesia Persero Tbk published this content on 08 December 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 December 2022 10:15:02 UTC.
