Semen Indonesia Tbk Officially Acquires 80% Stake in Lafarge Holcim

PT Semen Indonesia Tbk (SMGR) has finally announced the acquisition of 80.6% of Lafarge Holcim's shares in PT Holcim Indonesia Tbk (SMCB) for US$917 million, equivalent to Rp 13.57 trillion at an exchange rate of Rp 14,800 per US dollar. SMGR is a state-owned company and the largest cement producer in Indonesia, while SMCB is the largest cement company with four factories having a total capacity of 14.8 million tons/year and 30 ready-mix facilities.

For information, SMGR's cement sales for the January-September 2018 period grew by 4.4% to 21.84 million tons compared to the same period the previous year. This figure comprises domestic sales of 19.62 million tons and export sales of 2.22 million tons. Up to the third quarter of 2018, the cement issuer's market share reached 39.4% of national cement sales.

SMGR dominates sales in almost all regions of Indonesia, as shown in the graph below. The exception is West Java, DKI Jakarta, and Banten, where SMGR holds only a 17.5% market share due to intense competition. Despite this, this region still represents the largest volume for SMGR, reaching 26.5% of total cement sales. The acquisition is expected to expand the domestic sales network, diversify products, improve raw material and distribution cost efficiency, and increase ready-mix sales.