ANNUAL REPORT - semenindonesia.com · 2018 Annual Report PT Semen Indonesia (Persero) Tbk In 2018,...

ANNUAL REPORT

ANNUAL REPORT

1

CORPORATE GOVERNANCE CORPORATE SOCIAL RESPONSIBILITYBUSINESS REVIEW CONSOLIDATED FINANCIAL STATEMENTS

2018 Annual Report PT Semen Indonesia (Persero) Tbk

In 2018, PT Semen Indonesia (Persero) Tbk accelerated the comprehensive transformation of its business through a variety of strategic programs and initiatives.

Building on the initiatives of the previous year, the Company focused on consolidating and centralizing various functions to improve efficiency and productivity, while also bringing all subsidiaries together within a common corporate culture.

The initiatives not only delivered concrete improvements in the Companys performance, but also opened up new insights at all levels of the organization, as well as new market opportunities for the Companys business development going forward.

ACCELERATED TRANSFORMATION

2

CORPORATE PROFILEMANAGEMENT REPORT MANAGEMENT DISCUSSION AND ANALYSISMAIN HIGHLIGHTS

PT Semen Indonesia (Persero) Tbk 2018 Annual Report

2018

5.6%01

02

03

10.3%Revenue Increased

34.10%EBITDA Increased

Installed Production Capacity Increased

The Company recorded an increase in installed production capacity in 2018 as compared with the previous year

In March 2018, the Company signed a Memorandum of Understanding to work together with PT PLN (Persero), PT Semen Baturaja (Persero), PT Pupuk Indonesia (Persero), PT Patra Jasa and their subsidiaries, enabling the Company to utilize the hazardous fly ash

The Company forged synergies with 7 other SOEs and their subsidiaries for improved efficiency and performance

The Company achieved excellent results with increased production capacity, improved revenue and significantly higher net profit, while also maintaining high employee

satisfaction and safeguarding the quality of the environment.

and bottom ash (FABA) waste produced by PLN as a by product of burning coal to make cement. When processed properly, FABA can replace one third of the materials needed for Portland cement, with increased quality and durability.

Installed Production Capacity Increased

Financial Performance Growth

SOE Synergies

Revenue(Rp billion)

30,688

27,813

26,134

201820172016

EBITDA (Rp billion)

6,577

4,907

6,693

201820172016

PERFORMANCE HIGHLIGHTS

3



The Company successfully synergized the marketing strategies for all subsidiaries, resulting in more effective marketing. By doing so, the Company has been able to better identify each areas market characteristics and align production and distribution accordingly.

The procurement function was centralized throughout the year, resulting in considerable savings as well as more standardized quality and improved production processes.

04 05Marketing Synergized

Centralized Procurement

5,448

84%

Employee in 2018

Employee Satisfaction Index

The Company made efforts to further unify the corporate culture and associated human resources policies across all subsidiaries and holding, in order to move as one towards realizing its vision.

06 Unifying the Corporate Culture

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PRODUCTION CAPACITY

INCREASED

01

02

03

39.4%Domestic market share was maintained amidst tight competition.

In 2018, the Company owned and operated a total of 5 integrated cement plants in Indarung (West Sumatra), Tuban (East Java), Pangkep (South Sulawesi), Rembang (Central Java) and Quang Ninh Vietnam.

As of December 31, 2018, the total installed production capacity was 32.30 million tons of cement per year.

From 2014 to 2018, the Tuban, PT Semen Padang and PT Tonasa Business Units all won Level 5 Green Industry awards (the highest level) from the Ministry of Industry for their efforts to efficiently and effectively use resources in a sustainable manner in their production process.

The Company always takes environmental considerations into account in operations, as a form of concern for society.

During 2018, 2 production facilities in Rembang and Indarung VI began full operation.

Integrated Cement Plants

Installed Production Capacity

Market Share

Environmental Management

61,639

66,350

69,541

25,82

27,09227,421

20182016 2017

Companys Sales Domestic(Thousand tons)

CompanyNational

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FINANCIAL PERFORMANCE

GROWTH

01

02

03

Rp519Basic earnings per share in 2018

Rp273Basic earnings per share in 2017

Revenue rose by 10.3% in 2018 compared to 2017, supported by higher domestic sales as well as exports to new market destinations.

Net income attributable to owner of parent entity grew by 90% to reach Rp3,079 billion in 2018, far above 2017* net income at Rp1,621 billion.

By implementing cost discipline in parallel with revenue growth, the Company was able to successfully maintain a healthy capital structure in 2018, supported by strong liquidity and cash flows. Leverage and solvency were all maintained within acceptable limits.

Overall, the Company maintained a healthy balance sheet in 2018.

The Company successfully achieved a satisfactory performance with significantly improved margins, while delivering maximal returns to shareholders.

Revenue Growth

Growth of Net Income

Higher Returns to Shareholders

Solid Financial Fundamentals

* As restated

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To attain maximum and sustainable business performance, the Company continuously advances its value chain. The Company is not only focused in perfecting its business lines in the mid-stream segment, but the whole line of businesses in the value chain to give rise to business strength.

INTEGRATEDBUSINESS LINES

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Type of Cement Products

4 Cement Product Brands

TOTAL SOLUTION

11 Supporting ProductsCement Products Ordinary Portland Cement (OPC) Portland Pozzolan Cement (PPC) Portland Composite Cement

(PCC) Oil Well Cement (OWC) White Cement Portland Slag Cement Special Blended Cement (SBC) Portland Cement Type II Portland Cement Type V

11 Supporting Products Logistic

- Integrated Logistics- Land Transportation- Sea Transportation- International freight forwarder

Trading- International Trading- General Industry Trading- General Mining Trading

Mining & Heavy Equipment Rental Industrial Area Ready mix Concrete Precast Concrete Aggregate Product Masonry & Other Concrete Product Ground Granulated Blast Furnace

Slag (GGBFS) Packaging Industry Consultation and Services

4 Cement Brands Semen Gresik Semen Padang Semen Tonasa Thang Long Cement

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01 Accelerated

Transformation

02 2018 Performance

Highlights

10 Financial Highlights

12 Operational Highlights

13 Share Information

15 Management Report

16 Report of the Board of Commissioners

22 Report of the President Director

29 Corporate Profile

30 Corporate Identity

31 Logo Philosophy

32 Vision and Mission

32 Corporate Culture

34 Semen Indonesia at A Glance

36 Milestones

38 The Companys Advantages

39 Business Activities

40 Products and Services

41 Supporting Facilities

42 Operations Area

44 Shareholders Structure and Subsidiaries

46 Subsidiaries

48 Organization Structure

50 Board of Commissioners Profile

54 Board of Directors Profile

58 Corporate Secretary Profile

59 Head of Audit Internal Profile

60 Total Employee

61 Shareholders Information

62 Share Listing Chronology and Chronology of Other Stock Listing

63 Capital Market Supporting Institutions

64 Company Website

67 Access and Information

68 Awards and Certifications

70 Significant Events

74 Business Development

Strategy

80 Development of Supporting Infrastructure & Building Design Competency

92 Supply Chain Management

94 Information Technology

98 Research and Development

102 Companys Innovation Movement

105 Management

Discussion and Analysis

107 Market Overview

117 Operational Performance Review

125 Financial Performance Review

158 Human Resources Development

175 Corporate Governance

176 GCG Commitment Statement of Semen Indonesia

177 The GCG Implementation Basics

178 Objectives of GCG Implementation

178 GCG Implementation Roadmap

178 Assessment of GCG Implementation

180 Governance Structure and Mechanism

CONTENTS


181 General Meeting of Shareholders (GMS)

194 Board of Commissioners

200 Board of Directors

205 Remuneration Policy for Board ofCommissioners and Directors

208 Meeting of the Board of Commissioners, Board of Directors, and Joint Meetings

215 Affiliated Relationship between the Member of the Board of Directors, Board of Commissioners, and Majority Shareholders and/or Controller

217 Committees Under the Board of Commissioners

229 The Board of Commissioners Secretary

231 Corporate Secretary

238 Internal Audit Group

246 Independent Public Accountant

249 Risk Management

256 Code of Conduct

258 Whistle Blowing System

261 Corporate Social

Responsibility

262 Summary and Achievements

277 Commitment

264 Foundation for Implementation

264 Company CSR Vision & Mission

264 Objectives

267 Environmental Responsibility

277 Corporate Social Responsibility on Labor, Health and Safety

279 Corporate Social Responsibility towards Communities

284 Corporate Social Responsibility towards Consumers

286 Partnership Success Stories

291 Consolidated Financial

Statements

293 BOARD OF DIRECTORS STATEMENT LETTER

294 INDEPENDENT AUDITORS REPORT

296 Consolidated Statements of Financial Position

298 Consolidated Statements of Profit or Loss and other Comprehensive Income

299 Consolidated Statements of Changes in Equity

300 Consolidated Statements of Cash Flows

301 Notes to the Consolidated Financial Statements

460 Statement Letter

463 OJK Reference

No. 29/POJK.04/2016: Annual Report of Public

Company and SEOJKNo. 30/SEOJK.04/2016:

Form and Content of Annual Report of Public Company


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FINANCIALHIGHLIGHTSIn Million Rupiah 2018 2017a) 2016 2015 2014Consolidated Statements of Financial PositionCurrent Assets 16,007,686 13,801,819 10,373,159 10,538,704 11,648,545

Investments in Associate Entities 85,638 83,665 93,985 223,952 146,980

Fixed Assets 32,748,896 32,523,310 30,846,750 25,167,683 20,221,067

Intangible Assets 1,211,666 1,269,644 1,355,080 1,134,306 1,103,697

Other Non-Current Assets 1,102,004 1,390,212 1,557,922 1,088,474 1,211,386

Total Assets 51,155,890 49,068,650 44,226,896 38,153,119 34,331,675 Current Liabilities 8,202,838 8,803,577 8,151,673 6,599,190 5,271,930

Non-Current Liabilities 10,216,757 10,219,041 5,500,831 4,113,131 4,054,815

Total Liabilities 18,419,595 19,022,618 13,652,504 10,712,321 9,326,745 Total Equity 32,736,295 30,046,032 30,574,391 27,440,798 25,004,930 Capital Expenditure 1,799,278 3,504,826 5,169,917 5,650,020 2,493,801

Working Capital, net 7,804,848 4,998,242 2,221,486 3,939,514 6,376,615

Highlights of Consolidated Statements of Profit and LossRevenues 30,687,626 27,813,664 26,134,306 26,948,004 26,987,035

Gross Profit 9,330,530 7,959,599 9,855,872 10,645,996 11,578,877

Operating Income 4,880,635 2,851,306 5,227,113 5,945,532 7,142,178

Net Profit for the Year 3,085,704 1,650,006 4,535,037 4,525,441 5,567,660

Total Comprehensive Income for the Year 3,517,374 1,314,574 4,368,344 4,662,164 5,642,318

Net Profit Attributable to Holders of Parent Entity

3,079,115 1,620,995 4,521,596 4,521,491 5,559,902

Net Profit Attributable to Non-Controlling Interests

6,589 29,011 13,441 3,950 7,758

Total 3,085,704 1,650,006 4,535,037 4,525,441 5,567,660 Comprehensive Income Attributable to Holders of Parent Entity

3,475,788 1,295,418 4,395,314 4,599,417 5,631,171

Comprehensive Income Attributable to Holders of Parent Entity

41,586 19,156 (26,970) 62,747 11,147

Total 3,517,374 1,314,574 4,368,344 4,662,164 5,642,318 EBITDA 6,576,706 4,904,308 6,962,934 7,473,542 8,491,877

Market Capitalization 68,212,480 58,722,048 54,421,696 67,619,328 96,090,624

Weighted Average of Outstanding Shares (in thousand)

5,931,250 5,931,250 5,931,520 5,931,520 5,931,520

Earnings per Share (in Rupiah full amount) 519 273 762 762 937

Financial RatiosGross Profit Margin (%) 30.40 28.62 37.71 39.51 42.91

Profit Margin (%) 15.90 10.25 20.00 22.06 26.47

Net Profit Margin (%) 10.03 5.83 17.30 16.78 20.60

EBITDA Margin (%) 21.43 17.63 26.64 27.73 31.47

EBITDA to Interest Expense (X) 6.86 6.48 19.16 20.20 22.20

EBITDA to Interest Expense & Loan Principal Payments (X)

0.87 0.62 2.98 4.64 3.40

Return on Equity (%) b) 9.87 5.68 15.57 17.11 23.10

Return on Assets (%) 6.02 3.30 10.22 11.85 16.20

Current Ratio (%) 195.15 156.78 127.25 159.70 220.95

Return on Investment (%) 13.02 11.56 18.00 22.51 29.70

Debt to Equity Ratio (%) c) 31.63 35.13 21.56 15.18 16.14

Debt to Asset Ratio (%) d) 19.28 20.42 14.16 10.51 11.30

Debt to Capital Ratio (%) 23.15 25.01 17.00 14.62 15.52a) As restated b) Equity attributable to equity holders of the parent entity c) Total Interest Bearing Liability and equity attributable to equity holders of the parent entity d) Total Interest Bearing Liability.

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Total Assets(Rp billion)

51,15649,069

44,227

38,15334,331

2014 2018201720162015

Revenues(Rp billion)

30,688 27,813

26,13426,94826,987

2014 2018201720162015

Net Profit for the Year(Rp billion)

3,086

1,650

4,5354,525

5,568

2014 2018201720162015

Return on Assets/ROA(%)

6.02

3.30

10.22 11.85

16.20

2014 2018201720162015

Return on Equity/ROE(%)

9.87

5.68

15.57 17.11

23.10

2014 2018201720162015

EBITDA(Rp billion)

6,577

4,904

6,9637,474

8,492

2014 2018201720162015

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OPERATIONALHIGHLIGHTSIndustry Unit 2018 2017 2016 2015 2014Cement

Total Production Capacity Thousand Tons 37,800 35,800 31,800 31,800 31,800 Domestic Production Thousand Tons 28,566 28,658 25,884 26,504 26,398 Regional Production Thousand Tons 1,994 2,133 2,388 1,979 1,825 Total Production Thousand Tons 30,560 30,791 28,272 28,483 28,224 Domestic Sales *) Thousand Tons 27,421 27,094 25,684 26,069 26,163 Regional Sales Thousand Tons 5,745 4,514 3,300 2,640 2,363 Total Sales Thousand Tons 33,166 31,608 28,984 28,709 28,526

Packaging Industry

Pasted Woven Production Sheet 10,012,808 3,595,598 303,786 451,071 320,225 Sewn Woven Production Sheet 12,393,648 25,802,930 25,821,680 19,834,152 33,312,965 Pasted Kraft Production Sheet 228,858,880 233,864,679 236,743,090 233,919,088 229,542,343 Total Packaging Production Sheet 251,265,336 263,263,207 262,868,556 254,204,311 263,175,533

Industrial Real Estate

Sales Volume Industrial Land Sales m2 4,349 20,577 - - 40,429 Shophouse Sales Unit - - - - 1 Rental Volume Land Rent m2 44,353 43,849 43,969 43,678 46,644 BPSP Rent Unit 13 15 15 15 15 Warehouse Rent Unit 84 67 72 63 82 Office Rent Unit - 1 1 1 1 Shophouse Rent Unit 13 13 14 14 16 House Rent Unit 3 3 2 2 3

MiningMining Services Limestone Ton 17,298,592 14,666,153 13,309,918 13,534,452 12,928,832

Clay Ton 3,531,226 3,768,303 3,563,661 3,467,709 3,542,122 Surface Miner Ton 1,220,348 1,478,785 1,500,758 1,320,135 1,267,650 Subtotal Ton 22,050,166 19,913,241 18,374,337 18,322,296 17,738,604 Other Mining Services BCM Unit BCM 775,027 813,599 85,101 898,405 630,258 Meter Unit Meter 239,637 193,220 180,937 206,085 239,607 Ton Unit Ton 15,792,285 11,193,280 8,775,740 6,864,183 5,991,442 Hour Unit Hour 31,172 31,321 5,736 71,964 83,087 Lumpsum Unit Lumpsump 38 392 - - - Rit Unit Rit - - - - - Percentage Unit Percentage - 213 - - - m3 Unit m3 - 49,507 - - - Package Unit Package - 1 - - - Ea Unit Ea - 77 - - - Ha Unit Ha 25 10 - - - Subtotal Ton 16,838,183 12,281,620 9,047,514 8,040,637 6,944,394 Total Mining BCM 775,027 813,599 27,150,077 25,186,479 23,730,046 Total Mining Meter 239,637 193,220 85,101 898,405 630,258 Total Mining Ton 37,842,451 31,106,521 180,937 206,085 239,607 Total Mining Hour 31,172 31,321 - - -Total Mining Lumpsump 38 392 - - -Total Mining Rit - - - - -Total Mining Percentage - 213 - - -Total Mining Ha 25 10 - - -Total Mining m3 - 49,507 - - -Total Mining Package - 1 - - -

Total Mining Ea - 77 5,736 71,964 83,087

*) Source: ASI Exclude domestic clinker and white cement

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SHAREINFORMATION

SHARE & VOLUME OF SMGR COMPARED TO JCI IN INDONESIA STOCK EXCHANGE

QUARTERLY SHARE PERFORMANCE2017

Period OpeningRpHighest

RpLowest

RpClosing

Rp Total Shares VolumeMarket

Capitalization(Rp Billion)

1st Quarter 9,175 9,875 8,575 9,000 5,931,520,000 291,152,700 53,384

2nd Quarter 9,050 10,250 8,600 10,000 5,931,520,000 324,109,000 59,315

3rd Quarter 10,200 11,075 9,025 10,125 5,931,520,000 346,136,900 60,057

4th Quarter 10,200 11,100 9,125 9,900 5,931,520,000 251,563,100 58,722

2018

Period OpeningRpHighest

RpLowest

RpClosing

Rp Total Shares VolumeMarket

Capitalization(Rp Billion)

1st Quarter 9,900 11,750 9,650 10,350 5,931,520,000 323,670,000 61,391

2nd Quarter 10,350 11,000 7,075 7,125 5,931,520,000 311,470,000 42,262

3rd Quarter 7,125 9,925 6,725 9,925 5,931,520,000 314,330,000 58,870

4th Quarter 9,925 12,025 8,600 11,500 5,931,520,000 452,670,000 68,212

SHAREHOLDERS

SMGR (share price and trading volume) vs IHSGJanuary - December 2017

Price (Rp/Share)

29/1

2/16

29/0

1/17

28/0

2/17

31/0

3/17

30/0

4/17

31/0

5/17

30/0

6/17

31/0

7/17

31/0

8/17

30/0

9/17

31/1

0/17

30/1

1/17

12,000

10,000

8,000

6,000

4,000

2,000

0

Volume IHSG SMGR

25,000,000

20,000,000

15,000,000

10,000,000

5,000,000

0

Price (Rp/Share)

SMGR (share price and trading volume) vs IHSGJanuary - December 2018

25,000,000

20,000,000

15,000,000

10,000,000

5,000,000

0

29/1

2/17

29/0

1/18

28/0

2/18

31/0

3/18

30/0

4/18

31/0

5/18

30/0

6/18

31/0

7/18

31/0

8/18

30/0

9/18

31/1

0/18

30/1

1/18

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

Volume IHSG SMGR

No. Shareholders Total Shares %

1. Indonesian Government

3,025,406,000 51.01%

2. Foreign Institutions 2,197,717,635 37.05%

3. Foreign Individual 562,700 0.01%

4. Domestic Individual 57,924,837 0.98%

5. Domestic Institutions 649,908,828 10.96%

Total 5,931,520,000 100%

Indonesian Government

Foreign Institutions

Foreign Individual

Domestic Individual

Domestic Institutions

0.01%0.98%

10.96%

51.01%

37.05%


Amirul Mukminin Mosque, Makassar, South Sulawesi.

16 Report of the President Commissioner

22 Report of the President Director


MANAGEMENT

REPORT


16 PT Semen Indonesia (Persero) Tbk 2018 Annual Report

The Board of Directors successfully accelerated the Companys transformation in 2018 by successfully streamlining and consolidated the Companys operations. The result has been sustainable end-to-end improvements which have driven both top line and bottom line growth, and will strengthen the Company going forward.

REPORT OFTHE PRESIDENT COMMISSIONER

Dear Shareholders,

2018 was a very eventful year for Semen Indonesia (the Company). The ongoing transformation of the Companys operations, the formulation of a new vision by the Board of Directors with the input and approval of the Board of Commissioners, and the agreement to purchase Holcim Indonesia represent key achievements for the year which have undoubtedly created positive momentum going forward. Below we discuss these developments, along with our evaluation of our business performance and our assessment of the prospects of the Company.

In evaluating the performance of the Company, we have taken into account the Corporate Business Plan and Budget (RKAP) which was agreed upon at the beginning of the year, the achievements and performance of the Company during the year, and various other aspects such as good corporate governance implementation and the financial soundness of the Company.

Evaluation of the Companys PerformanceDemand for cement in Indonesia improved slightly in 2018 to around 67 million tons, but was still well below total national production capacity of 107 million tons. Price increases were further limited by

the aggressive pricing of certain new players in hopes of gaining market share. The Board of Directors responded by continuing the transformation of the Companys cost structure and operating structure to improve competitiveness, and more radically by rethinking the Companys vision for the direction of the business.

Overall, it is the opinion of the Board of Commissioners that the Board of Directors successfully carried out these objectives. There has been demonstrable improvement with centralization of the procurement, marketing and supply chain functions as well as production improvements. The Board of Commissioners has also been pleased to see that the Board of Directors made progress in further consolidating and uniting the subsidiary companies into one culture.

The improvements in the Companys 2018 sales, revenue, EBITDA and profit, which were achieved despite intense market competition, reflect the internal progress made through redefining the new business model and cost efficiency initiatives.

Meanwhile, the Companys new vision of becoming a Regional Leader in Building Material Solutions opens up new markets and growth prospects, effectively



REPORT OFTHE PRESIDENT COMMISSIONER

Sutiyoso President Commissioner



shifting the business model from cement production to becoming a solution provider. This enormous shift will take time to implement but we are confident that it is the right approach.

Finally, the Board of Directors decisively took advantage of the unexpected opportunity to purchase Holcim, the third largest cement producer in Indonesia. This acquisition strategically strengthens the Companys product portfolio, especially in building materials, as well as enhancing the Companys production capacity in the key geographical region of West Java. Overall, this acquisition will enlarge the Companys footprint and strengthen its foundation in the path to its new vision.

The Business Prospects of the CompanyThe Indonesian cement industry is heading into what is predicted to be a difficult year in 2019, with lower domestic consumption forecasted and possible headwinds related to the political climate that may reduce investment due to uncertainty. In addition, integration of the Holcim acquisition is a challenge on its own. Bearing these factors in mind, the Board of Commissioners believes that the cautious outlook of the Board of Directors is therefore warranted. However, we have confidence in the managements proposed strategy and believe that the Company is on the right track.

For 2019, the management will focus on four business priorities, namely: continued centralization and streamlining of functions, products and service development including with regard to building materials, sustainable management of stakeholders and partners, and transformation of the Companys corporate culture. These priorities aim to improve the Companys overall efficiency, strengthen its portfolio, maintain good stakeholder relations, and increase employee engagement and efficiency as well as instilling a market-centric mindset.

In doing so, the Board of Commissioners has reminded the Board of Directors to take care in rationalizing the Companys assets to include Holcim, and to prudently manage the debt load and cash flow in the interests of business continuity.

Corporate Governance OversightDuring 2018, the Board of Commissioners carried out its supervisory duties with the active input and assistance of the Audit Committee, the Strategy, Risk Management and Investment Committee, and the Nomination and Remuneration Committee. We also held regular meetings and discussions with the Board of Directors, and monitored the Companys good governance mechanisms including the whistleblowing system of the Company, which has been adequately implemented in our view.

Overall, we are satisfied that good corporate governance has been adequately implemented and we believe that the ongoing implementation of digital reporting systems and integrated information management systems should help increase reporting transparency and accuracy even further.

Changes in the Composition of the Board of CommissionersIn accordance with the resolutions of the Annual General Shareholder Meeting held on the April 30, 2018, the shareholders honorably discharged Hambra as a Commissioner of the Company and as per regulations, ratified the resignation of Djamari Chaniago as an Independent Commissioner of the Company. To replace them, the shareholders subsequently appointed Hendrika Nora Osloi Sinaga as a Commissioner and Mochamad Choliq as an Independent Commissioner. The Board of Commissioners thanks Hambra and Djamari Chaniago for all their efforts during their term of office as Commissioners, and welcomes Hendrika Nora Osloi Sinaga and Mochamad Choliq.



Sustainably Serving the PeopleAs a leader in the Indonesian market and a State-Owned Enterprise, the Company is keenly aware of its mandate to empower its Indonesian consumers and support the Indonesian nation to advance. Apart from striving to deliver good financial performance, the Company continued to pursue various initiatives that have the potential to deliver environmental and social benefits, such as efforts to minimize fossil fuel consumption through technological advances. The Company is also exploring and piloting various ways to use waste materials, such as fly ash and household waste, either as production material or as energy sources. More details are available in this Annual Report as well as the Companys Sustainability Report.

Appreciation & ClosingClosing out a year of hard work, the Board of Commissioners wishes to thank the Board of Directors and all of the employees for their hard work and efforts to sustainably advance the Company. We also wish to express our gratitude to all the shareholders and stakeholders for their confidence and support. It is our sincere hope that the new vision and direction of the Company will create sustainable value and guide the Companys transformation into becoming a world-class organization, one that can contribute even more to the development of the country while also maximizing profitability.




BOARD OFCOMMISSIONERS



Seated from Left to Right

Nasaruddin UmarIndependent Commissioner


Hendrika Nora Osloi SinagaCommissioner

Astera Primanto Bhakti Commissioner

Standing from Left to Right

Wahyu HidayatCommissioner

Sony SubrataCommissioner

Mochamad CholiqIndependent Commissioner



This eventful year saw the transformation of the Companys organization, business processes and human resources gain momentum towards becoming a nimble and efficient market-focused company, one able to identify and seize new opportunities going forward.

REPORT OFTHE PRESIDENT DIRECTOR

Dear Shareholders,

I am pleased to report that the Company made significant progress in transforming from a production-oriented company to become a market-centric company in 2018. The year culminated with the unexpected opportunity to acquire Holcim Indonesia, the third largest cement producer nationally, the purchase of which was finalized in February. Equally or even more important, we have established a new vision for the Company that completely redefines Semen Indonesia and its path forward, which I will discuss below.

PERFORMANCE IN 2018The persistent oversupply in the Indonesian cement market continued throughout 2018, leading to fierce price competition that was ameliorated only slightly by improvement in Average Selling Price (ASP). Despite these conditions, Semen Indonesia successfully increased its sales by 1.2% to 27.4 million tons of cement, maintaining its position as market leader with 39.4% of national sales.

Supported by ASP appreciation and various internal transformation initiatives, the Company successfully grew consolidated revenue by 10.3% to Rp30.9 trillion. Operating income improved by 71.2% to Rp4.9 trillion and operating margin rose from 10.25% to 15.90%,

supported by a 12.96% reduction in cost across the organization. EBITDA showed similar improvement, growing 34.1% to reach Rp6,577 billion in 2018.

The Company delivered profit attributable to the owner of the parent entity amounting to Rp3,079 billion, a 9% increase from Rp1,621 billion in 2017. Basic earnings increased to Rp519 per share from Rp273 per share in the previous period.

These improvements were the direct result of consolidation and centralization within the organization. Specifically, the procurement, marketing and supply chain functions have been centralized, resulting in time and cost savings. Among others, we are now able to negotiate bulk deals with key vendors for better prices and product quality standardization. On the marketing side, we eliminated intra-competition among Group subsidiaries by using the least cost to serve principle to determine which unit would serve each customer.

Similarly, better analysis and coordination of supply chain logistics with customer needs has enabled the Company to transport resources at the most efficient cost from point A to point B, resulting in significant savings as transport costs are one of the biggest cost elements of the business.



Hendi Prio SantosoPresident Director



In parallel, the Company is in the process of transforming and reorganizing its structure and business processes, including the organization and digital infrastructure, in alignment with our evolving business requirements. In doing so, the management recognizes that human resources are a key part of the transformation and has therefore been actively engaging with employees to communicate expectations and objectives along the way towards getting employee buy-in. We have also focused on uniting all subsidiary units within a common corporate culture, shared values and a more uniform working framework.

Altogether, these initiatives have sustainably improved the cost structure, coordination and synergy between holding and subsidiaries.

A NEW VISION FOR THE COMPANYGlobally, consumption of Portland cement is declining in favor of downstream cement-based construction products such as precast concrete. This trend, combined with rising competition in Indonesia for what is in essentially a shrinking global market, demands that Semen Indonesia rethink its business.

After a period of intense discussion and reflection during the year, the Board of Directors formulated a new blueprint and an exciting new vision which is designed to shift the Companys business model for greater growth. The new vision, To Become the Biggest Provider of Building Material Solutions in the Region, signals a major turning transformation in thinking and operation. With this vision, Semen Indonesia is no longer in the business of producing cement but rather is in the business of delivering total solutions for building materials, which is a substantially larger market.

As the foundation to achieve this vision, strong distribution channels and market presence are important. The aforementioned acquisition of Holcim Indonesia will strengthen the Companys national footprint and portfolio, especially in the building material business where Holcim Indonesia has existing capabilities, thus enhancing Semen

Indonesias portfolio towards become a total solution provider in the long term.

PLANS FOR 2019Guided by our ambitious new vision, we intend to continue with the next phase of the transformation plan towards becoming a market-centric organization that is Indonesias Leading Company in Building Material. We will drill down on all levels to increase synergies between all subsidiaries and units, increase standardization, leverage technological advances to increase efficiency, push centralized data gathering and analysis, support the Companys human resources development and nurture a performance-based corporate culture, and reach out further to distributors and end-customers through both physical and digital channels.

At the same time, we caution that cement demand growth is predicted to be lower next year in a climate fraught with potential political and economic volatility. It will also take time to integrate the Companys strategic acquisitions, on top of the Companys ongoing transformation process. In the long term however, we strongly believe that the developments of 2018 will sustainably improve Semen Indonesias competitive position, enabling it to deliver value for the nation and empowering its consumers in keeping with its mandate as a State-Owned Enterprise.

ENHANCING THE IMPLEMENTATION QUALITY OF GOOD CORPORATE GOVERNANCEIn 2018, the Management strove to further improve the implementation standards for GCG practices across all holding and subsidiary companies. The centralization and digitization that is underway and that will continue to be carried out, will strengthen the quality of GCG implementation in the Company as the Management will thus be able to better monitor the operational activities and performance of the Company as a whole. From 2016 until 2018, the Company was assisted by PT Sinergi Daya Prima to measure its GCG implementation using the same methodology as the methodology used in the 2014 assessment. The Company achieved a GCG score in 2018 of 93.401, which is its highest score since



it began measuring performance. These results show that the standard of corporate governance implementation has improved, in accordance with our stated commitment.

CHANGES TO THE BOARD OF DIRECTORSAt the April 30, 2018 Annual General Meeting of Shareholders, the shareholders honorably discharged Mr. Ahyanizzaman as Director of Marketing and Supply Chain, and subsequently appointed Mr. Adi Munandir as his successor. The Board of Directors conveys its thanks to Mr. Ahyanizzaman for his many contributions to the Company during his term of service.

CLOSING REMARKSIt is clear that we have much work ahead of us in order to realize the Companys potential and achieve our vision of becoming the leader in building material. This challenge is an exciting one that calls on us to fundamentally transform from the ground up, evolving from a cement producer to become an agile, digitally-enabled solution provider that is able to follow and even anticipate the market.

On behalf of the Board of Directors, I would like to thank the shareholders for their support and confidence, along with all the employees of the Company for their hard work. Our deepest appreciation also goes out to the Companys many business partners and of course, last but not least, our valued customers who have purchased our products and, we hope, will continue to do so for many years ahead.

Hendi Prio Santoso President Director



BOARD OF DIRECTORS

Seated from Left to Right

Agung YunantoDirector of HR & Legal

Fadjar Judisiawan Director of Business Strategy & Development

Tri AbdisatrijoDirector of Engineering and Projects

Benny WendryDirector of Production

Standing from Left to Right

Doddy Sulasmono DiniawanDirector of Finance

Hendi Prio SantosoPresident Director

Adi MunandirDirector of Marketing & Supply Chain


28 PT Semen Indonesia (Persero) Tbk 2018 Annual Report28 PT Semen Indonesia (Persero) Tbk Laporan Tahunan 2018

CORPORATE

PROFILE


292018 Annual Report PT Semen Indonesia (Persero) Tbk 29Laporan Tahunan 2018 PT Semen Indonesia (Persero) Tbk

30 Corporate Identity

31 Logo Philosophy

32 Vision and Mission

32 Corporate Culture

34 Semen Indonesia at A Glance

36 Milestones

38 The Companys Advantages

39 Business Activities

40 Products and Services

41 Supporting Facilities

42 Operations Area

44 Shareholders Structure and Subsidiaries

46 Subsidiaries

48 Organization Structure

50 Board of Commissioners Profile

54 Board of Directors Profile

58 Corporate Secretary Profile

59 Head of Audit Internal Profile

60 Total Employees

61 Shareholders Information

62 Share Listing Chronology and Chronology of Other Stock Listing

63 Capital Market Supporting Institutions

64 Company Website

67 Access and Information

68 Awards and Certifications

70 Significant Events



Company Name PT Semen Indonesia (Persero) Tbk.

Previous Company NamePT Semen Gresik (Persero) Tbk

Establishment 25 March 1953

Shareholders51.01% Government of Indonesia48.99% Public

Line of BusinessCement Industry

Address of PT Semen Indonesia (Persero) Tbk1. South Quarter, Tower A, 19th-20th Floor Jl. R.A. Kartini Kav. 8, Cilandak Barat Jakarta Selatan 12430, Indonesia T. +62-21-5261174-5 F. +62-21-5261176

2. Gedung Utama Semen Indonesia Jalan Veteran, Gresik 61122 Jawa Timur, Indonesia T: + 62-31-398-1732 F: + 62-31-398-3209

Email: [email protected] Website: www.semenindonesia.com

Legal BasisGovernment RegulationNo. 132 year 1961

Shares Code SMGR

Shares ListingThe Companys share was listed on the Indonesia Stock Exchange (previously Jakarta Stock Exchange) through an IPO exercise on July 8, 1991

SWIFT CodeIBBKIDJA

Authorized Capital Rp2,000,000,000,000

CORPORATEIDENTITY

Issued and Fully Paid Capital Rp593,152,000,000

@semenindonesia @semenku

@semenindonesiagroup @semenindonesia



Logo of PT Semen Indonesia (Persero) TbkThe logo of Semen Indonesia is a very important asset. The logo symbolizes the characteristics of Semen Indonesia. Not only is the logo visual representation, it also stands for Semen Indonesia and its core values.

The logo of Semen Indonesia shall be used only in its recognized forms, so as to maintain its identity and integrity.

Logo Philosophy Triangle Form The inverted pyramid form signifies that work is oriented towards good will and faith in God. A triangle form is also a symbol of strength and perfection

Layered Roof FormAn architectural form widely known in Asia, the layered roof form is a symbol for protection or patronage.

Number of Roof Lines - 9The number 9 (nine) is the highest single digit number, and is known as the number for perfection and the desire to reach perfection.

Color - RedRed symbolizes courage, enthusiasm, motivation, determination and passion to always work hard. The red-colored areas is shaped like a upward-pointing arrowhead, symbolizing a continuously improving (upward trend) performance.

Color - BlackBlack symbolizes depth, stability and strong confidence. These are the strong values in support of all work processes.

Red-Colored MDepicting a 3-pillar foundation, representing the strengths of the 3 (three) entities that originally established Semen Indonesia.

LOGOPHILOSOPHY



Developing cement business and related industries oriented customer satisfaction

Realizing international standard company with competitive advantages and synergies to increase a sustainability added value

Realizing social responsibility and environmentally friendly

Providing the best value to the stakeholders

Build competencies through human resource development

VISION

MISSION

Being a Leading International Cement Company in Southeast Asia

Statement of Vision, Mission and Corporate Culture are determined by the Board of Directors on October 25, 2014 and approved by the Board of Commissioners on October 25, 2014.

REINFORCEMENT OF CORPORATE CULTURE

The Company continuously strives to improve understanding of the corporate culture that has been established as the foundation of the Companys work. With the same corporate culture, it is expected that the Companys pace will become more synergistic and together will achieve the established vision. One of the efforts is strengthening the CHAMPS culture.

VISION, MISSION AND CORPORATECULTURE



CHAMPS: New Values-New Key Behaviors

Diligent and flexible for the best result

Always implement new and better work procedure

Provide best services and value added to internal and external customers

Open minded and acting first in the interest of Semen Indonesia Group

Positive and responsible cooperation to maximally achieve Company objective

Act according to agreement and promises

Honest, sincere and responsible

CHAMPS

We Are The CHAMPS!Belief

MILITANCESINERGY INTEGRITY3 Values

7 Key Behaviors

The CHAMPS culture continues to be strengthened to all employees as a form of employee identity. This Corporate Culture is a synergy of the Corporate Culture that exists throughout the Company and its Subsidiaries. The process of establishing a corporate culture begins with the awareness that the Company needs to bring the entire Group of Companies together.

Strengthening the culture through the internalization of such culture is part of the paradigm shift in Human Capital (HC) management. Whereas previously this emphasized efforts in a supporting function, it now concentrates on functioning as a strategic business for the Company, requiring the alignment of HC management strategies with the business strategies of the Company.

To ensure paradigm shift, the Company, through the Human Capital Directorate, since 2017 onwards, has identified three areas of strategic change that must be implemented:

1. Change the HC mindset in conducting business

2. Reviewing and Improving the Human Capital Master Plan, through improvement of HC Management System

3. Improving HC Competency Development Patterns

The strategy used to achieve these objectives and to realize the strategic change, is by improving the entire HC management system, consisting of five groups of systems, namely:1. High performing human capital

management system2. Leadership capability enhancement3. Technical capability enhancement4. Knowledge enterprise enablement5. CHAMPS Culture crystallization

The changes in the paradigm, strategies, initiatives and objectives of the Companys HC management are illustrated in the chart below:



SEMEN INDONESIAAT A GLANCE

PT Semen Indonesia (Persero) Tbk, previously known as PT Semen Gresik (Persero) Tbk, is a company engaged in cement industry. Inaugurated in Gresik on August 7, 1957 by the first President of the Republic of Indonesia, the Companys initial plant had an installed capacity of 250,000 tons cement per year.

On July 8, 1991, Semen Gresik listed its shares on the Jakarta Stock Exchange and the Surabaya Stock Exchange (now Indonesia Stock Exchange). The Company is the first SOE to go public, offering 40 million shares to the public. The composition of shareholders at the time was: Government of RI 73% and public 27%.

In September 1995, the Company exercised Rights Issue I, which changed the shareholding composition to 65% Government of RI and 35% shares owned by the public. On September 15, 1995, PT Semen Gresik was consolidated with PT Semen Padang and PT Semen Tonasa. At that time, the Companys total installed capacity was 8.5 million tons cement per year. On September 17, 1998, the Government of RI divested 14% of its stake in the Company through an open tender offer, which was acquired by Cemex S.A. de C.V., a global cement company based in Mexico. The shareholding composition thus changed to 51% the Government of RI, 35% public, and 14% Cemex. Subsequently, on September 30, 1999 the shareholding composition changed to: Government of RI at 51.01%, public 23.46% and Cemex 25.53%.

On July 27, 2006, Cemex Asia Holdings Ltd. sold its shares to Blue Valley Holdings PTE Ltd., thereby changing the shareholding composition of the Company to Government of RI 51.01%, Blue Valley Holdings PTE Ltd. 24.90%, and the public 24.09%,

In March 2010, Blue Valley Holdings PTE Ltd. divested all of its shares through private placements. The Companys shareholding composition then changed to Government of RI 51.01% and the public 48.99%.

On April 2012, the Company completed the construction of the Tuban IV plant with an installed capacity of 2.5 million tons. Following the commissioning stage, the new plant was handed over in July 2012, followed by the inauguration of its commercial operations in October 2012.

Further, in the third quarter of 2012, the Company has also completed the Tonasa V plant in Sulawesi. The new plant with 2.5 million tons capacity has gone through the commissioning stage since September 2012, and it was targeted for commercial operations in the first quarter of 2013.

On December 18, 2012, the Company officially acquired a 70% stake in the Thang Long Cement Joint Stock Company (TLCC) from Hanoi General Export-Import Joint Stock Company (Geleximco) in Vietnam, with 2.3 million tons capacity. Through this corporate action, the Company became the first Indonesian multinational SOE.

On December 20, 2012, the Company officially became a Strategic Holding Company. Concurrently, it changed its name from PT Semen Gresik (Persero) Tbk to PT Semen Indonesia (Persero) Tbk.

On December 20, 2013, the Company signed the deed of establishment of a joint venture company, PT Krakatau Semen Indonesia (KSI), which will build a plant to process the slag powder waste as raw material for cement production.

Subsequently, on December 24, 2013, the Company continued its Corporate Transformation process and solidified its role as a Strategic Holding by forming a new subsidiary, PT Semen Gresik.



In 2014, the Company embarked on another business development program by commencing the construction of 2 cement plants in Padang and Rembang. This was followed by the decision to commence the construction of a new plant in Aceh. The Company, through PT Krakatau Semen Indonesia, also commenced with the construction of a ground granulated blast furnace slag plant at Cigading.

In 2016, as part of the expansion plans in cement and non-cement business, the Company established PT Semen Indonesia International (SII), PT Semen Indonesia Aceh (SIA) and PT Semen Kupang Indonesia (SKI), and changed the name of PT SGG Prima Beton to PT Semen Indonesia Beton (SIB).

In 2017, the Company established a joint venture which engaged in the building materials sector, namely PT Semen Indonesia Building Industry. The establishment of this joint venture was one of the

Companys efforts to capture growth opportunities in the building materials industry, which can be a new growth engine while enhancing synergy among the subsidiaries. In addition, two new factories of the Company namely Rembang Plant in Central Java and Indarung VI Plant in West Sumatra entered its commercial operations period, which have capacity of 3 million tons/year each.

On November 12, 2018, the Company recorded a historic milestone with the signing of the Conditional Sales Purchase Agreement (CSPA) for the acquisition of 80.6% shareholding in PT Holcim Indonesia Tbk from LafargeHolcim Ltd. The acquisition transaction is scheduled for completion in the first quarter of 2019. Post acquisition, PT Semen Indonesia Tbk will become one of the largest cement producers in Southeast Asia and among the top 10 in the world, with total installed capacity of 53 million tons per annum.



1957 1991 1995

19981999

2006

The Company was established with production facility of 250,000 tons per annum (design capacity).

Cemex entered as strategic partner with share ownership of 14.0%. The Companys ownership structure changed to:Government of Indonesia, 51%Public: 35%Cemex: 14.0%Market capitalization stood atRp4.9 trillion

Initial Public Offering (IPO). Market capitalization stood at Rp0.63 trillion. The Companys ownership structure:Government of Indonesia: 73%Public: 27%

Cemex increased its ownership to 25.5%. The ownership structure changed to:Government of Indonesia: 51%Public: 23.5%Cemex: 25.5%Market capitalization stood atRp6.6 trillion

For the Acquisition of national cement companies, PT Semen Padang (Persero) and PT Semen Tonasa (Persero).

Blue Valley Holdings purchased Cemexs share ownership of SGMR. Market capitalization value: Rp21.5 trillion.Ownership:Government of Indonesia: 51%Public: 24.1%Blue Valley: 24.9%

MILESTONES



2014

2010

2015

2012

2016

2013

Commenced physical construction of new plants in Rembang and Padang (Indarung VI).

Established PT Sinergi Informatika Semen Indonesia.

Blue Valley Holdings divested its entire shares in SGMR. Market capitalization (April 2010): Rp72.31 trillion.Ownership:Government of Indonesia: 51%Public: 49%

The establishment of a joint venture company, PT Semen Indonesia Industri Bangunan to tap into the opportunity for the growth of building material industry as the new source of revenue, as well as to improve the synergy between subsidiaries.

The commercial operations of Rembang Plant in Central Java and Indarung VI Plant in West Sumatra, which have a capacity of 3 million tons/year each.

Commenced new plant development in Aceh.

Capitalization as of December 31, 2012 stood at Rp94 trillion. Production capacity (installed) reached 28.5 tons per annum.

Completed the construction of 2 cement plants.

Acquired Thang Long Cement Joint Stock Company (TLCC) in Vietnam.

Transformed into Strategic Holding Company. Changed its name to PT Semen Indonesia (Persero) Tbk.

Established PT Semen Indonesia International (SII), PT Semen Indonesia Aceh (SIA), and PT Semen Kupang Indonesia (SKI) as well as changed the name of PT SGG Prima Beton to PT Semen Indonesia Beton (SIB), as part of expansion in cement and noncement fields.

Established PT Krakatau Semen Indonesia, a joint venture company for slag powder waste management to be re-used as raw material in cement production. Established PT Semen Gresik continuing Corporate Transformation journey.

Signing of the Conditional Sales Purchase Agreement (CSPA) for the acquisition of 80.6% shareholding in PT Holcim Indonesia Tbk from LafargeHolcim Ltd., bringing the total installed production capacity to 53 million tons per annum, the largest in Southeast Asia.

2017 2018



The Companys excellence advantages also includes the following features:

Distribution Reach1The Companys distribution excellence is backed by 21 supporting warehouse units, 25 strategically located packing plants, and 223 national distributors that guarantee the stability of cement supply anywhere in the archipelago. In Vietnam, TLCC has 37 distributors throughout North, Central, and South Vietnam.

Raw Materials2The Companys mining sites have material reserve with the best quality and sufficient amount to ensure long-term continuity of cement production.

Brand Image3The Company is the owner of three reputable brands. It also controls the largest domestic (Indonesia) market share of 39.4%, which reflects the strength of the Companys corporate and brand image.

Financial Fundamentals4The Company has maintained strong financial fundamentals, thus providing ample resources to expand production capacity and venture into other related businesses.

THE COMPANYSADVANTAGES



The business activities are in cement, production and distribution of cement products and downstream cement products.

PRODUCTION PROCESS

Preheat

Coal

Rotary Klin

Clinker

Blending

Raw

Clinker

Cement

Roller Press

Cement Cement

Cement

Transporting

BUSINESSACTIVITIES



Product TypesThe Company produces several cement types. Its flagship product is Portland Cement Type II-V (Non-OPC). The Company also produces specific types and mixed cement products for limited usage. The following lists all cement types and their usage.

PRODUCTS AND SERVICES

Portland Cement Type I Also known as Ordinary Portland Cement (OPC), hydraulic cement that widely used in general constructions, such as building construction without specific requirements, among others are residential, high-rise buildings, runways and highways.

Portland Cement Type IIPortland Cement Type II is resistant to sulfate and medium hydration heat. Its usage includes seaside buildings, in wetlands, docks, irrigation channels, mass concrete, and dams.

Portland Cement Type VPortland Cement Type V is used for the construction of buildings on high-sulfate land/water and is highly suitable for waste management plant installation, underwater construction, bridges, tunnels, ports, and nuclear power plants.

Special Blended Cement (SBC)Packed in bulk, this specific cement was developed for Surabaya-Madura (Suramadu) bridge mega project and is customized for constructions in saltwater environment.

Portland Slag CementPortland Slag Cement is cement with specifications above type IV, specially formulated for the ready mix and precast industries for the needs of large-scale project development such as high rise buildings, fly over, underground tunnels, etc.

Notes:* Portland Cement Type I and PPC are available in the retail market. While other types are only produced by order in a certain

quantities.* The products are marketed mainly for domestic market needs and others are exported. Most products are marketed in the form of

zak packaging, while the rest are sold in bulk form.

Portland Pozzolan Cement (PPC)Hydraulic cement produced by grinding slags, gypsums, and pozzolans. PPC is used in general constructions and buildings that require sulfate and medium hydration heat resistance, such as: bridges, highways, houses, docks, mass concrete, dams, irrigation, and fully plated foundation.

Portland Composite Cement (PCC)Hydraulic binder cement produced by grinding slags, gypsums, and one or more inorganic materials. The cement type is suitable for general concrete construction, as combination of bricks, plastering, drainages, construction of specific buildings such as pre-cast concrete, pre-press concrete and paving blocks.

Oil Well Cement (OWC) Class G HRCOWC is a specific type of cement used in oil and natural gas wells for underwater oil wells construction. The production of OWC includes Class G, High Sulfate Resistant (HSR) or Basic OWC. For usage in certain depth and temperature, additive can be added.

Super White CementA high-quality white cement product for interior and exterior decorative purposes, and for covering the joints of ceramic tiles, profiles, and others. White cement is produced from choice raw materials with low (less than 1%) iron and magnesium oxide content, with different degrees of whiteness measured according to different standards.



SEMEN PADANG

Operates five cement mills with design capacity of 10.9 million tons cement per annum, located in Indarung, West Sumatra. Semen Padang also operates eight cement packing plants in Teluk Bayur, Belawan, Batam, Tanjung Priok, Ciwandan, Malahayati, Lhokseumawe, Bengkulu and Lampung, as well as 14 supporting warehouse units and one port.

Teluk Bayur PortCapacity : 40,000 DWTDepth : 12.5 mLength : 150 mTotal Docks : 3

Dumai PortCapacity : 35,000 DWTDepth : 9.5 mLength : 180 mWidth : 40 m

SEMEN TONASA

Operates four cement mills with design capacity of 7.6 million tons cement per annum, located in Pangkep, South Sulawesi. Semen Tonasa also operates and owns ten cement packing plants equipped with jetties in Biringkassi, Makassar, Mamuju, Sofifi, Palu, Bitung, Kendari, Samarinda, Ambon and Celukan Bawang Bali. Semen Tonasa has 5 supporting warehouses.

Biringkassi PortType : Line JettyLength : 570.5 meterWidth : 45 meterCapacity : 30,000 DWTDepth : 13 M LWS

SUPPORTING FACILITIES

SEMEN GRESIK

Operates five mills with design capacity of 17.4 million tons cement per annum, located in Tuban, East Java and at Rembang - Central Java. Semen Gresik also operates and owned two ports, namely Semen Gresik Special Ports in Tuban and Gresik. Semen Gresik operates 2 units of supporting warehouse across Java and Bali, and operates five packing plants in Ciwandan, Banyuwangi, Sorong, Balikpapan, Pontianak and Banjarmasin.

Tuban Special Port Dock IType : Line JettyLength : 175 meterWidth : 45,5 meterCapacity : 7,000 DWTDepth : 8 M LWS

Dock IIType : Line JettyLength : 225 meterWidth : 45,5 meterCapacity : 40.000 DWTDepth : 13 M LWS

Gresik Special PortType : Line JettyLength : 290.8 meterWidth : 15.5 meterCapacity : 10,000 DWTDepth : 9 M LWS

THANG LONG CEMENT

Operates one mill with design capacity of 2.3 million tons cement per annum, located in Quang Ninh province, has its own port (Thang Long Jetty) with vessel load capacity of up to 30,000 DWT. For greater load capacity, the company uses Cai Lan seaport located approximately 3 km from the companys port. In addition, TLCC operates grinding mills located on the outskirts of Ho Chi Minh City. TLCC also has 3 cement packing plants (rotary packer).

Thang Long PortType : Line JettyLength : 160 meterCapacity : 30,000 DWTDepth : 9 M LWS

Cai Lan PortType : Line JettyLength : 826 meterCapacity : 75,000 DWTDepth : 12 M LWS



Grinding Plant

4 Units Cement Mill

Kiln 5 Units

Cement Mill 11 Units

Kiln 5 Units

Cement Mill 8 Units

Kiln 1 Unit

Cement Mill 1 UnitMyanmar

LaosNaypyidaw

Bangkok

Phnom Penh

Kuala Lumpur

Singapore

Jakarta

Jawa

Kalimantan

Thailand Vietnam

Brunei

Cambodia

Malaysia

Indonesia

Grinding Plant

1 Unit Cement Mill

Bandar Seri Begawan

Sumatera

Grinding Plant

1 Unit Cement Mill

Grinding Plant

1 Unit Cement Mill

OPERATIONSAREA



Papua

Kiln 4 Units

Cement Mill 6 Units

Sulawesi Maluku

Dili

Manila

Philippines

East Timor

Integrated Cement Plant 5 Locations

Kiln 15 Units Cement Mill 26 UnitsGrinding Plant 4 Locations Cement Mill 7 Units

Warehouse 21 Locations

Packing Plant 25 Units

Sea Port 7 Locations



PT Semen Kupang

Indonesia* 99.48%

PT Semen Indonesia

Aceh* 52.28%

TLCC70.0%

PT Semen Gresik 99.96%

PT Semen Tonasa 99.99%

PT Semen Padang 99.99%

* Still in the construction phase

Government of Republic of Indonesia

51.01%

Public48.99%

SHAREHOLDERS STRUCTUREAND SUBSIDIARIES



PT Semen Indonesia Beton 99.99%

PT Sinergi Mitra Investama 97%

100%

100%

65%

55%

PT Sinergi Informatika Semen Indonesia

PT Semen Indonesia Logistik

PT Kawasan Industri Gresik

Industri Kemasan Semen Gresik

United Tractor Semen Gresik

PT Krakatau Semen Indonesia

PT Semen Indonesia Industri Bangunan

PT Semen Indonesia International 100%

73.65%

60%

50%

SIIB



SUBSIDIARIES

The Company has established subsidiaries, associates and affiliates that are engaged in cement related businesses, from cement production, distribution to products usage.

Name % Ownership Line of Business Total Assets(Rp)Operating

Year Address

Subsidiaries

PT Semen Padang 99.99% Cement Producer 9,992,063,002,000 1913 Indarung, Padang 25237, Sumatera BaratTel. : (0751) 815250 Fax. : (0751) 815590e-mail : [email protected]

PT Semen Gresik 99.96% Cement Producer 5,622,947,595,000 2017 Jl. Veteran Gresik 61122Jawa Timur, IndonesiaTel. : (031) 398-1732Fax. : (031) 398-3209www.semengresik.co.id

PT Semen Tonasa 99.99% Cement Producer 8,742,767,287 1968 Biringere, Pangkep, Sulawesi Selatan 90651 Tel. : (0410) 312345 Fax. : (0410) 310113e-mail : [email protected]. sementonasa.co.id

PT Thang Long Joint Stock Company (*)

70.00% Cement Producer 2,480,513,733,000 2008 Le Loi Commune - Hoanh Bo District - Quang Ninh, VietnamTel. : 84 (03) 33691325 Fax. : 84 (03) 33691326 www.thanglongcement.com.vn

PT Sinergi Mitra Investama

97.00% Management and Optimization of Assets owned by PT Semen Indonesia (Persero) Tbk.

46,253,266,000 2012 Perumdin PT Semen Indonesia (Persero) Tbk.Jl. Awikoen Blok A-7 SeguntingGresik 61122Tel. : (031) 3970374Fax. : (031) 3972263

PT Semen Indonesia Beton (SIB)

99.99% Ready Mix Concrete Producer

2,225,721,917,000 2012 Jl. Tebet Timur Dalam VIII X/15 Jakarta Selatan 12820Tel. : (021) 8295327Fax. : (021) 29222849e-mail : [email protected] www.semenindonesiabeton.com

PT United Tractors Semen Gresik

55.00% Limestone and clay mining

676,601,111,000 1992 Desa Sumberarum, Kec Kerek, Kab. Tuban

PT Industri Kemasan Semen Gresik

60.00% Cement Bag Producer

425,887,824,000 1994 Desa Socorejo, Kec. Jenu, Tuban-Jawa Timur 62352 Tel. : (0356) 491200 Fax. : (0356) 491234 e-mail : [email protected] www.iksg.co.id



Name % Ownership Line of Business Total Assets(Rp)Operating

Year Address

Subsidiaries

PT Kawasan Industri Gresik

65.00% Industrial Estate 368,285,801,000 1991 Jl. Tridharma No. 3 Gresik 61121 Tel. : (031) 3984707Fax. : (031) 3984472e-mail : [email protected] www.kig.co.id

PT Semen Kupang Indonesia

99.48% Cement Producer 192,417,790,000 - Jl. Yos Sudarso, Alak, Tenau, Kupang, NTT

PT Semen Indonesia Industri Bangunan

100% Material 1,000,000,000 2017 Graha Irama Lt. 11 Unit GJl. H.R. Rasuna Said Blok X-1Jakarta Selatan 12950

PT Semen Indonesia Aceh

52.28% Cement Producer 605,916,012,000 - Jl. Banda Aceh Medan KM 107 Nomor 100, Gampong, Kampong Baro, Kec. Pidie, Kab. Pidie 24151

PT Sinergi Informatika Semen Indonesia (SISI)

100% Information System 61,405,915 2014 Graha Irama (Indorama) Building lantai 6, Jl. HR Rasuna Said kav. 1-2, Jakarta 12950 Tel. : (021) 5213711Fax. : (021) 5261176e-mail : [email protected]

PT Semen Indonesia Internasional

100% Investment 468,413,315,000 2016 Menara Anugrah, Kantor Taman E.3.3, No. 22F Jl. Mega Kuningan Lot 8.6-8,7, Jakarta 12950Tel. : (021) 57853977Fax. : (021) 57942294 www.semenindonesiainternational.com

PT Semen Indonesia Logistik (SIL)

73.65% Trade, transportation, and construction

2,434,028,459 1974 Jl. Veteran No. 129, Gresik-Jawa Timur 61122 Tel. : (031) 3981463Fax. : (031) 3982304e-mail : [email protected] www.silog.co.id

PT Krakatau Semen Indonesia

50.00% Cement material manufacturing

401,279,668,000 2014 Kawasan Industri Krakatau Bandar Samudera, Jl. Mayjen S. Parman KM 13 Cigading, Ciwandan, Cilegon BantenTel. : (0254) 7960092Fax. : (0254) 7960094 www.krakatausemenindonesia.com

Notes(*) TLCC was acquired on December 18, 2012, with 2 subsidiaries: 1. Thang Long Joint Stock Company 2 -> 99.9% share ownership by TLCC 2. An Phu Cement Joint Stock Company -> 99.9% share ownership by TLCC All subsidiaries are under preparation for the construction new cement mills.



ORGANIZATIONSTRUCTURE

Department of Strategic

PlanningRuri Adam

Department of Business

DevelopmentRahmat Faizal

Business Development

& Management Assets

Business Unit Soni Asrul Sani

Corporate Risk Management

M Ludfi Setyadi

Departmentof Design

EngineeringDurain P. Siregar

Department ofR&D Product &

ApplicationRudi Hermawan

Project Management

Heru Indrawidjajanto

Department ofR&D Product &

ApplicationAchmed Vaival

Istiadi

Department of Corporate

CommunicationSigit Wahono

(Pgs.)

Department of CSR

Wahyudi Heru

Department of Corporate Office

Evie Amaliana

Department of Institutional RelationshipVita Mahreyni

Department of Investor

RelationsFebriandita

Kusuma (Pgs.)

Department of Productivity& Technical

ServicesBenny Ismanto

Department ofProcess Control,

Technology & QSHE

Teguh Sutrisno

Department of Maintenance ManagementAgus Subroto

VP Corporate Secretary

Agung Wiharto

Directorate of Business Strategy and Development

FADJAR JUDISIAWAN

Directorate of Production

BENNY WENDRY

Directorate of Engineering & Projects

TRI ABDISATRIJO



Departmentof System

Development & InnovationHer Arsa

Pambudi (Pgs.)

Department of Legal,

Governance & Compliance

Tri Gati Mareta (Pgs.)

Department of Strategic

FinanceBudi Wahyu

Darsono

Department of Corporate AccountingMuchamad Supriyadi

Department of Sales

Region ITino Darusman

Department of Sales

Region IIJoni Gunawan

Department of Sales

Region IIIMuh. Afandy Marasabessy

Department of Business

FinanceM Supriyadi

(Pgs.)

Supply Chain Business Unit

RahmanKurniawan

Department of Transportation Management

Wahyu Purnomo

Department of Distribution

ManagementAhmad

Zulkarnain

Department of MarketingPlanning & Controlling

Rudi Hartono

Department of Corporate

MarketingGathut

Wicaksono

Sales Business UnitMufti Arimurti

Departmentof HR

DevelopmentHer Arsa Pambudi

Department of Center

of Dynamic LearningEndang

Persitarini

Department of ICT Strategic

Achmad Tholchah

Directorate of Marketing & Supply Chain

ADI MUNANDIR

Directorate of HR & Legal

AGUNG YUNANTO

Directorate of Finance

DODDY SULASMONO DINIAWAN

President Director

HENDI PRIO SANTOSO

Department of ProcurementProid Kontura

Internal Audit Group

Tubagus M. Dharury

Strategic Management

Office



SutiyosoPresident Commissioner74 years old (December 6, 1945)Indonesian CitizenshipDomiciled in Jakarta

EDUCATION Graduated from the National Military Academy, Magelang in 1968 and a Bachelors degree in Law from Sekolah Tinggi Hukum Militer, Jakarta in 1996.

HISTORY OF POSITION Appointed as President Commissioner based on the Annual General Meeting of Shareholders dated March 31, 2017 with a term of office up to 2022.

He served as Head of State Intelligence Agency (2015-2016); Governor of DKI Jakarta (2002-2007) and (1997-2002).

Currently, he holds no other positions

EDUCATION OR TRAINING FOR COMPETENCY-

AFFILIATED RELATIONSHIPThere is no affiliation either with members of the Board of Commissioners, the Board of Directors or shareholders.

SHARE OWNERSHIP IN SEMEN INDONESIA-

BOARD OF COMMISSIONERSPROFILE



Nasaruddin UmarIndependent Commissioner60 years old (June 23, 1959) Indonesian CitizenshipDomiciled in Jakarta

EDUCATION He holds a degree in Syariah Faculty, from IAIN Alauddin, Ujung Pandang in 1984, Masters degree from UIN Syarif Hidayatullah, Jakarta in 1992 and Doctorate degree from UIN Syarif Hidayatullah, Jakarta in 1999.

HISTORY OF POSITION Appointed as Independent Commissioner based on the Annual General Meeting of Shareholders dated March 31, 2017 with a term of office up to 2022.

Previously served as Deputy Minister of Religion of Indonesia (2012-2014) Director General of Islamic Community Guidance, Ministry of Religious

Affairs (2006-2012).

Currently, he is the Imam Besar at Masjid Negara Istiqlal and Professor at UIN Syarif Hidayatullah.

EDUCATION OR TRAINING FOR COMPETENCY2018 Product Knowledge Distributor education on 9-17 December 2018 in Canada



Mochamad CholiqIndependent Commissioner66 years old (December 12, 1952)Indonesian CitizenshipDomiciled in Jakarta

EDUCATION Obtained his Engineering degree from Institut Teknologi Sepuluh Nopember (ITS), Surabaya in 1979 and Magister Management from STM Prasetiya Mulya in 1997.

HISTORY OF POSITION Appointed as Independent Commissioner based on the Annual General Meeting of Shareholders dated April 30, 2018 with a term of office up to 2023.

Previously served as Director of PT Adhi Karya (2001-2006). President Director of PT Waskita Karya (2008-April 2018).

Currently, he holds no other positions






Astera Primanto Bhakti Commissioner51 years old (January 20, 1968)Indonesian CitizenshipDomiciled in Jakarta

EDUCATION He holds a Bachelors degree in Economics majoring in Management from Universitas Jenderal Soedirman, Purwokerto in 1990 and Masters degree in Taxation from University of Denver, USA in 1997.

HISTORY OF POSITION Appointed as Commissioner based on the Annual General Meeting of Shareholders dated March 31, 2017 with a term of office up to 2022.

Previously served as Director General of Fiscal Balance, the Ministry of Finance (June 2018-

now) Chief of Financial Education and Training Agency, the Ministry of Finance

(2017-June 2018) Expert Staff of State Revenue Policy to the Finance Minister

(2015-2017) Expert Staff of State Revenue to the Finance Minister (2015) Head of State Revenue Policy - Fiscal Policy Office (2012-2015)

Concurrently serves as the DIrector General Fiscal Balance, Ministry of Finance, RI




Hendrika Nora Osloi SinagaCommissioner49 years old (June 7, 1970)Indonesian CitizenshipDomiciled in Jakarta

EDUCATION She holds a Chemical Engineering degree, Faculty of Industrial Engineering from Institut Teknologi Bandung in 1994 and Magister Management, Post Graduate Study, Economic Faculty, Universitas Indonesia in 2003.

HISTORY OF POSITION Appointed as Commissioner based on the Annual General Meeting of Shareholders dated April 30, 2018 with a term of office up to 2023.

Previously served as Commissioner of PT Perusahaan Gas Negara (Persero) Tbk (2016-2018). Commissioner of PT Perusahaan Pengelola Aset (Persero) (2014-2016) Commissioner of PT BTDC (Persero) (2011-2014) Member of GCG Committee of PT Antam (Persero) Tbk (2010-2012) Commissioner of PT Timah Investasi Mineral (2008-2011) Commissioner of PT Batubara Bukit Kendi (1999-2008)

Concurrently, she serves as Assistant Deputy for Energy, Logistics, and Tourism Region I, Ministry of SOE.






Wahyu Hidayat Commissioner65 years old (July 3, 1954)Indonesian CitizenshipDomiciled in Jakarta

EDUCATION He holds a Diploma Study in Development Finance, University of Birmingham, England in 1984 and Bachelors degree in Economics from Universitas Gadjah Mada, Yogyakarta in 1979.

HISTORY OF POSITION Appointed as Commissioner based on the Annual General Meeting of Shareholders dated March 25, 2014 with a term of office up to 2019.

Previously served as Deputy in Restructuring and Strategic Planning, SOE Ministry (2013-2014) Commissioner of PT Bank Mandiri (Persero) Tbk (2012-2014) Secretary of SOE (2012-2013)

Concurrently, serves as Commissioner of PT Multi Bintang Indonesia Tbk.

EDUCATION OR TRAINING FOR COMPETENCY1. The 3rd International Leadership Seminar on 7-9 March 2018 in Bali,

organized by BI Institute2. The Persona GLOBAL 40th International Conference on August 30

September 3, 2018, Spain, organized by Persona Global3. 2018 Product Knowledge Distributor Education on 4-12 December 2018 in

Canada, organized by Semen Indonesia



Sony SubrataCommissioner53 years old (February 11, 1966)Indonesian CitizenshipDomiciled in Jakarta

EDUCATION Completed his Bachelor of Commerce in Marketing from The University of New South Wales, Sydney, Australia in 1988.

HISTORY OF POSITION Appointed as Independent Commissioner based on the Annual General Meeting of Shareholders dated January 23, 2015 with a term of office up to 2020.

Previously served as Independent Commissioner of PT Ciputra Surya Tbk (1999-2003) Chairman of Yayasan Bangsa (1997-1999) President Director of PT Adiriasindo (1995)

Concurrently, serves as Commissioner of PT Tridaya Nusantara Internasional and Commissioner of PT Brata Nusa Pratama.






BOARD OF DIRECTORS PROFILE

Hendi Prio SantosoPresident Director52 years old (February 5, 1967)Indonesian CitizenshipDomiciled in Jakarta

EDUCATION He holds a Bachelor of Business Administration and Economics (double majors) from University of Houston, Texas, USA in 1990 and degree in Economics from University of Texas, Austin, USA in 1988.

HISTORY OF POSITION Appointed as President Director based on the Extraordinary General Meeting of Shareholders dated September 15, 2017 with a term of office up to 2022.

Previously served as President Director of PT Perusahaan Gas Negara (Persero) Tbk

(2008-May 4, 2017) Finance Director of PT Perusahaan Gas Negara (Persero) Tbk

(2007-2008) Investment Banking Director of PT JP Morgan Securities Indonesia

(2001-2007).

Concurrently, he serves as President Commissioner of PT Semen Gresik (2018-2023) President Commissioner of PT Semen Indonesia International (2018-2021)

EDUCATION OR TRAINING FOR COMPETENCY1. Corporate Governance Workshop2. ABAC - APEC Economic Leaders Summit3. Strategic Business Alignment4. Global Digital Leader Executive Development Program5. Corporate Work Plan & Budget Workshop6. Corporate Strategic Alignment Semen Indonesia Group





Fadjar JudisiawanDirector of Business Strategy and Development 48 years old (May 9, 1971)Indonesian CitizenshipDomiciled in Jakarta

EDUCATION He holds a Bachelors degree in Engineering from Institut Teknologi Sepuluh Nopember, Surabaya in 1995 and a Masters degree from Universitas Gadjah Mada, Yogyakarta in 2002.

HISTORY OF POSITION Appointed as Director based on the Extraordinary General Meeting of Shareholders dated September 15, 2017 with a term of office up to 2022.

Previously served as Acting Deputy in Construction Business, Transportation Facilities and

Infrastructure, Ministry of SOE (2017) Assistant Deputy in Construction Business, Transportation Facilities and

Infrastructure, Ministry of SOE (2015-2017) Assistant Deputy in Construction Services, Ministry of SOE (2014-2015) Assistant Deputy in Research and Information, Ministry of SOE (2013-

2014).

Concurrently, he serves as President Commissioner of PT Semen Indonesia Logistik (2018-2021) President Commissioner of PT Industri Kemasan Semen Gresik

(2018-2021) Commissioner of PT Semen Indonesia Industri Bangunan (2018-2021).

EDUCATION OR TRAINING FOR COMPETENCY1. Corporate Governance Workshop2. Strategic Business Alignment3. Corporate Work Plan & Budget Workshop4. Corporate Strategic Alignment Semen Indonesia Group



Adi MunandirDirector of Marketing & Supply Chain 38 years old (July 10, 1981)Indonesian CitizenshipDomiciled in Jakarta

EDUCATION He holds a Bachelors degree in Engineering from Universitas Indonesia, Jakarta in 2003 and Master of Management Science, Universitas Indonesia in 2013.

HISTORY OF POSITION Appointed as Director based on the Extraordinary General Meeting of Shareholders dated April 30, 2018 with a term of office up to 2023.

Previously served as Group Head of Marketing of PT Perusahaan Gas Negara (Persero) Tbk

20162018. Commissioner of PT Solusi Energy Nusantara (2017-2018) Head of Strategic Management Division of PT Perusahaan Gas Negara

(Persero)Tbk (2015-2016) Executive Officer - Strategic Management Office of

PT Perusahaan Gas Negara (Persero) Tbk (20132015).

Concurrently, he serves as President Commissioner of PT Semen Padang (2018-2023).

EDUCATION OR TRAINING FOR COMPETENCY1. Corporate Governance Workshop2. Global Digital Leader Executive Development Program3. Strategic Business Alignment4. Corporate Work Plan & Budget Workshop5. Corporate Strategic Alignment Semen Indonesia Group





Benny Wendry Director of Production 50 years old (May 1, 1969)Indonesian CitizenshipDomiciled in Jakarta

EDUCATION He holds a Bachelors degree in Chemical Engineering from Institut Teknologi Bandung and a Masters degree in Management from Universitas Gadjah Mada, Yogyakarta in 2001.

HISTORY OF POSITION Appointed as Director based on the Extraordinary General Meeting of Shareholders dated September 15, 2017 with a

ANNUAL REPORT - semenindonesia.com · 2018 Annual Report PT Semen Indonesia (Persero) Tbk In 2018,...

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