Dear Shareholders and Stakeholders,

Praise the Lord for His blessings and guidance that in 2023 the Company continues to operate smoothly amidst the challenging economic conditions due to global economic deceleration and financial market uncertainty. 

Globally, economic growth weakened from 3.5% in 2022 and predicted to fall to 3.0% in 2023. Increasing geopolitical fragmentation, causing supply chain disruption and widening growth divergence between countries. We are grateful, in the midst of these conditions, the Indonesian economy continued to grow and resilient to the impact from global economic conditions. Indonesian economy is still growing at 5.05%, which was mainly supported by strong domestic demand and maintained purchasing power inline with low inflation. 

With the above conditions, we report that in 2023 the Company’s financial performance was decreased compared to previous year, with consolidated revenue of USD339.90 million, a decrease of 17.66% from previous year which was USD 412.08 million. The Company net profit in 2023 was USD 21.39 million, a decrease of 43.58% from 2022 which was USD 37.90 million. 

This decline motivated us to strive for improvement in operation efficiency to anticipate fluctuation in crude oil prices which greatly affect the Company’s profitability and continuing to strive for sustainable growth.

Strategy and Policy of Strategy 

With the increase in population and increasing public awareness of clean and hygienic lifestyle, this will have an impact on increasing demand for the Company’s product. Therefore, the Company will expand its production capacity, whereas this capacity expansion is expected to start in 2024 and to be completed in 2026. 

In the meantime, the Company will maximize its production output and maintain stable distribution of product to ensure raw material availability to meet our loyal customers’ demand, and continue to explore new markets, both domestic and overseas. 

In carrying out business activities, the Company has standard operating procedures to ensure readiness to cope with operational disruptions so that the Company’s business activities to run smoothly and effectively. 

The Company always cares about environmental aspects by creating environmental-friendly operations and professionally manage in accordance with prevailing laws and regulations. The Company has obtained ISO 14001:2015 certificate by SGS Systems & Services Certification since 2004 and in 2023, the Company has also obtained international quality standard certification ISO 45001: 2018 for Occupational Health and Safety Management System from AMTIVO. 

Directors’ Role in Formulating Strategy and Policy 

The Company Directors had important roles in formulating the Company Strategy and Policy to achieve The Company’s goal and to present the best result to the stakeholders. 

The strategy and policy had been evaluated and discussed in depth. The Company Directors were assisted by the Company management in analyzing risks for finance, non-finance and business prospects. The end results were then delivered to the Company Commissioners for considerations and feedback. 

The Directors, assisted by the management team, Internal Audit unit, and the Corporate Secretary, continuously monitor the implementation of the approved strategy and policy and made adjustments and revisions when needed to adapt with the changes of situation and condition.

Comparison between Result and Target 

In 2023 the crude oil price experienced a decline, especially in the first half, and then tend to stagnate until the end of year. The fluctuation of crude oil price greatly affected the raw material costs and the Company’s product selling price, which then stressed the Company’s margin. 

Despite these conditions, the Company was still able to achieve consolidated revenue of USD 339.30 million, although it was still below 2023 target of USD 414.62 million. This also caused the Company’s margin in 2023 came down and recorded gross profit of USD45.57 million, below the 2023 target of USD 58.46 million.

Obstacles 

The drastic changes of crude oil prices due to geopolitical factors would affect the Company’s margin. In addition, the competition from imported and substitution goods may cause a decrease in demand of the Company’s products.

Overview of Business Prospects 

In 2024 it is predicted that global economic condition will decelerate at 2.8%, and of course this will have an impact to Indonesian economic conditions. The Indonesian economic growth in 2024 is predicted by Indonesia Central Bank (BI) to be in the range of 4.7% to 5.5%. This prediction is based on 2023 economic growth indicators which continue to recover. 

With continued good economic growth accompanied by increase in Indonesia’s population size and growth, whereas detergent consumption per capita is still relatively low compared to those in developed countries will give good prospect to the detergent and cleaning industries in Indonesia. The increase of people awareness for clean and hygienic way of life also increases the detergent and other cleaning products. Therefore, we are confident and optimistic for the Company future. 

In 2024 the Company will start the expansion project, and it’s expected that in 2026 the Company will have additional production capacity by 120,000 MT of Linear Alkylbenzene per year. This capacity increase is expected to strengthen the Company position domestically and internationally to provide sustainable on time supply to the customers.

Good Corporate Governance Implementation 

The Company always value the importance of sustainable growth and concern for Environment, Social and Governance (ESG) where ESG is a main pillar toward achieving sustainable growth. The Company always believes that Good Corporate Governance (GCG) is an important aspect in managing the Company to protect the interest of stakeholders also to enhance the trusts and values of the shareholders toward sustainable business growth.

Therefore, the Company continues to ensure that the basic principles of the GCG, which consists of Transparancy, 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. 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. In 2023 the Company has fullfilled all obligations on reporting and disclosure of information to all stakeholders punctually in accordance with prevailing laws and regulations. On 13 June 2023, the Company’s Directors held Annual GSM for the 2022 financial year, in which the Company’s Shareholders received and ratified the 2022 Annual Report which includes the Company’s Activity Report, the Board of Commissioners’ Supervisory Report, and the Company’s Financial Statements for the 2022 financial year. In the said GSM. the Company’s Shareholders have also decided to distribute cash dividends on 2022 net income, amounting to USD9.26 million, of which has been distributed to the shareholders on 12 July 2023.

Policies & Implementation of Sustainability Strategy Fulfillment

As part of the Company commitment to be active in establishing sustainable environment, the Company has created special task force who specifically deal with health, safety and environment (HSE). The Company will continually improve the competency of HSE task force by providing related trainings. The Company was awarded ISO 14001:2015 Certificate by SGS System & Services Certification since 2004 as a proof of the Company active involvement in preserving environment. In 2023, the Company has obtained an international quality standard certification ISO 45001:2018 for Occupational Health and Safety Management System from AMTIVO accreditation agency. 

The Company maintains good working relationships and communication with the employees, facilitates a union without discrimination of ethnic, religions, race, and gender. The Company also carries out an equal and fair performance evaluation and fulfilling the normative rights of employees as stipulated in the Manpower Law. The Company also maintains good Occupational Health and Safety (K3) for the employees and creates a comfortable working environment, beautiful and environmentally friendly.

The Company’s commitment is to provide quality products for its customers, The Company’s credibility to maintain the quality of its products has been recognized through the ISO 9001:2015 international quality standard certification which has been obtained by the Company since 2003 from SGS Systems & Services Certification. 

The Company actively participate in Corporate Social Responsibility within the Company’s vicinity as well as its surrounding community. As a form of the Company’s concern for the surrounding community, the Company provides work opportunities for local community (Pemuda Karang Taruna) as part of human resources programme, and participates in social activities and scholarships in the surrounding environment. 

Appreciation

Finally, we would like to appreciate all employees who have worked with full dedication so that the Company could overcame 2023 challenges with positive achievements. We are also very thankful for all our customers, suppliers, creditors and business partners for the supports, cooperations and trusts provided to us. We will continue to put our best efforts to strengthen our cooperation 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.

-bt24-