Directors Report
  • Dear Shareholders and Stakeholders,

    Praised to the Lord for His blessings so the Company could successfully get through year 2020 despite the unfavorable global economic conditions caused by Covid-19 pandemic, whereby world economy contracted especially during the first half of 2020.

    Indonesian economy was no exception. Our country economic growth contracted by 2.07% in 2020, which was much lower than that of previous year at 5% growth.

    According to survey conducted by a marketing consultants company, there are some behavioral changes on personal health and hygiene product consumption during pandemic. Demand for medicines, food supplements, multi vitamins and home cleaning products such as detergents and floor cleaners, personal hygiene product such as hand soap and bath soap, has surged in attempt to enhance human body immunity and resistance against virus spread.

    In such difficult situation, the Company, which supply products related to public sanitation is among the industries which could survive and even grow.

    In 2020 the Alkylbenzene (AB) sales increased by 14.26% from 2019 and the Company achieved a revenue of USD 325 million and earned a net profit of USD 27.29 million an increase of USD 15.91 million or 139.67% from 2019.


    Strategy and Policy of Strategy

    An escalating awareness for clean and hygienic lifestyle will increase demand of the Company's product. The Company will expands its production capacity by additional 120,000 MT per year. This capacity expansion is expected to be started at the end of 2021 and completed in 2023.

    In the meantime, the Company will maximize its production output and maintain stable distribution of product to ensure raw material availability and production smoothness of its customers, both in domestic and overseas countries, while continue expanding for new market.

    The Company sets and enforces regulations based on health protocols for all employees at the plant or office to ensure protection to the health and safety of Employees which are the Company asset.

    This Covid-19 pandemic has caused people to turn toward digital technology. The Company will pay more attention to Human Resources development and Information Technology implementation.


    Comparison between result and target

    Target for 2020 was set prior to Covid-19 outbreak. The actual sales volume achievement of 2020 was higher than the target.

    Implementation of Government regulation on gas price reduction and increase of sales and production volume contributed to lower production cost. As a result, the Company earned gross profit of USD 55.45 million which is USD 13.24 million higher than the targeted 2020 gross profit.

    Strengthening Rupiah currency also gave positive effect to the Company due to high net monetary asset in Rupiah. Operational currency gain in 2020 was USD 3.52 million.

    Increase in earning described above has caused an increase in Company tax. This is including the adjustment of deferred tax assets related to reduction of income tax rate. Nevertheless, 2020 net profit of USD 27.29 million was still higher than the targeted one of USD 18.42 million.


    Obstacles

    Covid-19 pandemic has created a lot of obstacles in 2020. Restriction in mobility across the world has resulted in lower demand of commodities globally. Crude oil price dropped since January 2020. The lowest crude oil price was in March when many countries went lockdown. The falling of crude oil price was caused by several factors, such as plummeting global demand and tension between Saudi Arabia and Russia. Such conditions stirred market anxiety because of oversupply and piling up commodities. Fluctuation of crude oil price indirectly affects the Company's raw material costs.

    Mobility restriction imposed by certain countries could also impact to raw material availability directly or indirectly. To date, the supply of raw materials to the Company has been undisturbed.

    Plant capacity expansion project remains the focus of the Company. In compliance with health protocols during pandemic, any meeting and discussion with related parties and contractors which normally could be conducted by face-to-face interaction, now it has to be conducted virtually. Country border closure and quarantine for overseas visitors will also affect the project progress and completion.

    Digital transformation has undergone acceleration since Covid-19 virus outbreak. Operational activity requires adjustment to certain extent and the Company needs to adapt to assure the safety and health of employee and working spaces in order to align with authority regulations thus enabling smooth operation while maintaining physical distancing.


    Overview of Business Prospects

    Global economic condition is expected to continually improve as indicated by decreasing economic growth contractions in several countries. Although worldwide Covid-19 cases continue to increase and overshadowed by new strains. the availability of vaccines offers hope for global economy recovery.

    Indonesian economy in the fourth quarter of 2020 has improved from previous quarter. The softening economic contraction was supported by essential sectors such as health services and communications. In 2021 Indonesian economy is estimated to grow by 5%, higher than market consensus and International institution prediction.

    The economic growth coupled with population growth of Indonesia bring a bright future to detergent and cleaning product industries. Since Covid-19 outbreak, people awareness on hygienic way of living has increased. Growth potential of detergent in Indonesia is very promising considering detergent consumption per capita in Indonesia is still relatively low as compared to developed countries. Therefore, we are optimistic of the Company's future.

    We hope that by implementation of government policies and programs to maintain market stability and security, we may be able to regain positive momentum in 2021 and the years to come.


    Governance implementation

    The Company always views the Good Corporate Governance (GCG) and its implementation as an important aspect in managing the Company. It safeguards the interests of all stakeholders and increases trust and value for Shareholders and to achieve sustainable business growth.

    Therefore, the Company continues to make every effort to ensure that the basic principles of the GCG, which consist of Transparency, Accountability, Responsibility, Independence and Fairness - are applied to all aspects of the business operations and at all levels of management and implemented in accordance with prevailing laws and regulations and compliance with applicable business ethics.

    The Company always ensures that the Company's organs such as the General Shareholders Meeting (GSM), the Board of Commissioners, the Directors as well as other GCG supporting organs such as the Audit Committee, the Internal Audit Unit and the Corporate Secretary function properly so that the Company's GCS can be fully enforced. During 2020 the Company has fulfilled all obligations on reporting and disclosure of information to all stakeholders punctually in accordance with prevailing laws and regulations.

    On 29th July 2020, the Company's Directors held an Annual General Shareholders Meeting (GSM) for the 2019 financial year, whereby the Company's Shareholders accepted and ratified the 2019 Annual Report which includes the Company's Activity Report, the Board of Commissioners' Supervisory Report, and the Company's Financial Statements for the 2019 financial year. During this annual

    GSM, the Shareholders have also decided to distribute cash dividends on 2019 net income, amounting to IDR 116 per share, with a total cash dividend value of IDR 44.47 billion which was distributed on September 2nd, 2020.

    As part of GCG implementation, the Company also play an active role and participate in carrying out Corporate Social Responsibility (CSR) within the Company and the surrounding community. One example of CSR within the Company is the Company maintains harmonious working relationships and smooth communication with its employees and fulfilling the normative rights of employees as stipulated in the Manpower regulations. The Company also endeavors to establish excellent Occupational Health and Safety (K3) for the employees and provide comfortable, nice and environmentally friendly working atmosphere.

    During Covid-19 pandemic, the Company plays an active role in preventing the Covid-19 virus spread within the Company workplace by enforcing strictly health protocols as regulated by the Indonesian Government. As part of CSR, the Company donated Personal Protective Equipment (PPE) to surrounding hospitals for their front line health workers.


    Appreciation

    Finally, we would like to appreciate all employees who have worked with full dedication so that the Company could overcame 2020 challenges with positive achievements. We are also very thankful for all our customers, suppliers, creditors and business partners for the supports, co-operations and trusts provided to us. We will continue to put our best efforts to strengthen our co-operation based on mutually beneficial partnership.

    We also expressed our respects and gratitude to the Board of Commissioners for their guidance and to the Shareholders for their trusts. We are optimistic that the Company will continue to advance and achieve optimum results.


    -jxxi

Investor Relations
  • Board of Commissioners Report
  • Directors Report
  • Management Discussion and Analysis
  • Consolidated Statements of Comprehensive Income
  • Consolidated Statements of Financial Position
  • Financial Highlights Graphics
  • Ratio Analysis
  • Business Prospect and Strategy
  • Competitive Advantage and Risk Management
  • Prospectus & Articles of Association
  • Shares, Dividends and Chronology of Company Listing
  • The Significant Laws and Regulations Changes
  • Annual Reports
  • Consolidated Financial Statements