SMSM to Increase Capex to IDR 150 B

SMSM to Increase Capex to IDR 150 B

Selamat Sempurna Tbk (SMSM), a manufacturer of automotive components, will increase capital expenditure (capex) from IDR 100 billion to IDR 150 billion starting 2018. Capex is allocated for the rejuvenation of machines to boost efficiency and productivity.

“Our capex is generally IDR 100 billion per year for maintenance. In the next one to two years, it will be raised to IDR 150 billion for the rejuvenation of machines,” said Ang Andri Pribadi, Finance Director of SMSM.

The factory utilization reaches 60 percent with an average filter production of 50 million units per year. In the first half of 2017, the filter production reached 31 million units. The filter product contributes 72 percent or IDR 1.08 trillion to total revenue of IDR 1.49 trillion. The radiator products contribute IDR 161 billion, while car reaches IDR 91 billion, trading parts of IDR 368 billion and other incomes of IDR 162 billion.

The slowdown in automotive sales in Indonesia has little impact on the company’s business. “We are focusing on the replacement market, not on OEM, and our biggest contribution from export market to 115 countries reaches 72 percent of total sales,” said Andri.

The company is predicting that sales growth in the second half of 2017 will be higher than in the first half of 2017 which is 12 percent. Demand for spare parts not only derives from the automotive sector but also from the heavy equipment sector that grew in line with infrastructure development and improved mining commodity prices. (*)

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