PROPOSED BUSINESS STRATEGY TO OPTIMIZE COMPANY’S PERFORMANCE POST-COMMERCIAL CENTRALIZATION TO THE HOLDING COMPANY: CASE STUDY OF PT SEMEN PADANG

• Main Author: Hanif Gusman, Muhammad
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/46885
• Institution: Institut Teknologi Bandung

Continuous increment in domestic cement demand leads to the emergence of new cement manufacturers in Indonesia. Currently, the overall domestic cement plants’ capacities are exceeding the domestic cement demand, resulting in the domestic installed plant’s overcapacity. In other words, the national cement industry competition is becoming tighter. In response to these situations, PT Semen Indonesia has started to consolidate with the first tier cement manufacturer, such as PT Solusi Bangun Nusantara, to increase its market share. Moreover, PT Semen Indonesia is implementing the commercial centralization strategy at the Opco level aiming Opco equality on accessing bulk deals, guaranteeing production continuity, and inter-Opco brand competition avoidance in the same region. However, the commercial centralization is restricting PT Semen Padang to take control of its previous functions, such as the procurement, marketing of cement and clinker, and the supply chain. Unfortunately, PT Semen Padang, as an Opco of PT Semen Indonesia, is continually facing the domestic market share reduction, the declining plant utilization rate, and the declining national sales, even on the post-commercial centralization strategy implementation. Through all post-commercial centralization boundaries, PT Semen Padang should implement the university-industry collaboration aiming at generating cost leadership innovation. Further, PT Semen Padang should also move towards digitalization and product diversification by strengthening its ties with its subsidiaries, such as with PT Sinergi Informatika Semen Indonesia and PT Igasar. By implementing these initiatives, it is expected that PT Semen Padang could shift towards a global subsidiary mandate type.