Semen Indonesia is looking to expand its cement production capacity in Indonesia to meet projected demand increases. It plans to grow to 70 million tonnes of capacity by 2030 through both organic expansion and inorganic growth strategies. Organic growth would require building a new plant every year, which faces challenges of limited resources and long construction times. Therefore, Semen Indonesia will also pursue an inorganic growth strategy of acquiring foreign cement companies to quickly gain additional capacity and enter new regional markets. This strategy could introduce challenges of integrating different business cultures and systems. Semen Indonesia will also pursue marketing strategies of acquiring existing local brands in new markets to facilitate market entry.

1. Semen Indonesia Globalization
Strategy Through Inorganic
Growth
Indonesia Brand Forum (IBF) 2013
Jakarta Convention Center
May 2013

2. SEMEN INDONESIAINDONESIA 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

3. SEMEN INDONESIACAPACITY MAP
SMGR
2
1
3
4
5
1
1
6
7
THE PLAYERS and CAPACITY (2013)

4. SEMEN INDONESIAMARKET 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

5. SEMEN INDONESIAMARKET 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

6. SEMEN INDONESIAMARKETING 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

7. SEMEN INDONESIASEMEN INDONESIA SUPPLY MAP

8. 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