Semen Indonesia Globalization Strategy Through Inorganic

Growth

Indonesia Brand Forum (IBF) 2013

Jakarta Convention CenterMay 2013

SEMEN INDONESIAINDONESIA CEMENT MARKET

564

Bag80%

• Housing• Cement-based Industry

• Ready Mix• Fabricator• Projects

Bulk20%

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 HistoryMT

*Line shows market growth in percent

SEMEN INDONESIACAPACITY MAP

SMGR

22

11

33

4455

1

1

6677

THE PLAYERS and CAPACITY (2013)

SEMEN INDONESIAMARKET GROWTH

This forecast implies an Semen Indonesia capacity requirement of 70 MT by 2030 (with 90% capacity utilization)

Pesimist5.7%

Moderate6.5%

Optimist7.1%

Annual Growth Rates

Indonesia Cement Market Growth 2010 - 2030MT

Sales SI(44,0% Market Share)

Pesimist

Moderate

Optimist161

144

124

63

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

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

SEMEN INDONESIASEMEN INDONESIA SUPPLY MAP

THANK YOU

Main Office:Main Building of Semen Gresik

Jln. VeteranGresik 61122 – Indonesia

Phone: (62-31) 3981731-2, 3981745Fax: (62-31) 3983209, 3972264

Representative Office:

The East Building, 18th Floor,Jln. Lingkar Mega Kuningan Kav. E3.2 No. 1,

Jakarta 12950 – IndonesiaPhone : (62-21) 5261174 – 5

Fax : (62-21) 5261176

www.semengresik.com