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Press Release

Strategy of Waskita Beton Precast in 2021

Jakarta, March 30th, 2021. In 2020, PT Waskita Beton Precast Tbk (Waskita Beton Precast) managed to record operating revenues of Rp. 2.21 trillion. This income has decreased when compared to the previous year. This is due to the Covid-19 pandemic since the end of 2019 until now which has hampered the acquisition of new projects and projects that are currently being worked on by the Company. With the Pandemic conditions, projects that have been obtained by the company are hampered, thus reducing revenue progress in 2020. The remaining contract value at the end of 2020 is IDR 4.11 trillion. This will be the potential for operating income in 2021.


In terms of cash flow, the Company still recorded a positive value where the company`s operational cash flow at the end of the year was IDR 561.48 billion or 21.4 times the amount of operational cash flow in 2019, which was IDR 26.27 billion. This value is supported by the disbursement of terms from customers of IDR 3.33 trillion throughout 2020.

The Covid condition creates opportunities for the Company to restructure its business in operational and strategic aspects. The main thing that is being done is to improve efficiency in various lines of the Company. The company integrated 5 plants located in West Java (Karawang Plant, Subang Plant, Sadang Plant, Cibitung Plant and Kalijati Plant). Through this integration, it is hoped that the Company`s operating expenses can be reduced for the foreseeable future and the productivity of precast concrete production performance can be further increased.

The company`s new contract value in 2020 is IDR 1.86 trillion. The acquisition of new contracts was dominated by external projects amounting to Rp. 998.79 billion (54%) through the Binjai Pangkalan-Brandan Toll Road Project, Banda Aceh - Sigli, NCICD and other projects. Meanwhile, the acquisition of internal projects is Rp. 866.56 billion (46%) through the Pasuruan-Probolinggo Toll Road Project, the Prabumulih-Muaraenim Toll Road, the Package 4 Coastal Safety Road Project, and other projects.

Management`s focus on external markets is in line with management`s strategy to increase exposure to external customers. This is also reflected in the growth of subscribers which increased by 48.28% from 2019 of 87 subscribers to 129 customers. This figure is the highest customer growth rate in the last 5 (five) years.

The company makes improvements to the system used. SAP S / 4 Hana has been officially implemented since the beginning of 2021. The implementation of SAP S / 4 Hana is a moment of change for systems and human resources, namely changing the work culture to be more planned, structured, fast, and effective. In addition, this system also makes retrieval easier decisions, work systematically, generate real time data. Until now, SAP S / 4 Hana has covered various lines and units in the company (plant, batching plant, quarry, project, and sales area) owned by the company.

Moch. Cholis Prihanto, President Director together with the new management of Waskita Beton Precast, stated that they are committed to making improvements through several work programs that have been designed. "The new management will make improvements by ensuring the sustainability of the company with an emphasis on restructuring and organizational integration by prioritizing control and delegation of authority (decentralization)," he added.
 
The main strategies that have been formulated by the Company for improvement include:
  1. Improving the organizational structure through decentralization and implementing the SAP system to produce accurate and real-time data to support Management`s strategic decision making. The company has used SAP since the beginning of 2021.
  2. Optimizing unproductive assets in order to cooperate with external parties;
  3. Ensuring adequate working capital and cash flow through restructuring of banking facilities, accelerated collection of accounts receivable, and tighter cost control;
  4. Perform production efficiency and supply chain management through plant integration in the region
  5. West Java, which the Company has carried out since the end of 2020. Through this integration, the company`s operating expenses have decreased compared to the previous year.
  6. Conducting market synergy through JO / JV with business partners / potential investors where previously the Company had signed a memorandum of understanding (MoU) with Japanese companies for future cooperation through JO / JV.
  7. Improving HR through rationalization of employees according to the amount of production utility, this is of course in line with the efficiency strategy implemented by the Company.

"Some of these strategies have been carried out by the company since the end of 2020, and the hope will be seen in the next period`s Financial Statements," he said.

In addition to the improvement strategy, the Company also has a business strategy for 2021, including working on the external market by selling all the superior resources owned by the Company, selling new products that the Company has developed and collaborating. Through this strategy, the Company is optimistic to be able to achieve the targets that have been set, namely the new contract value of Rp. 7.88 trillion and operating income of Rp. 5.33 trillion.

The company also views that the vaccination program can provide a positive catalyst for the growth of the sector, especially construction in Indonesia. It is expected that economic conditions will experience a recovery in the second semester of 2021.