Board of Directors
From left to right : Mr. Yamada Shoichi, Mr. Ferry Suarly, Mr. David Luis, Mr. Wu Yongcheng, Mr. Zhou Chengcai, Mr. Yogiawan
Dear Shareholders and Stakeholders,
Amidst stable macroeconomics condition in 2017, asBoard of Directors, PT Voksel Electric Tbk., allow us topresent report on Company’s performance managementand realization throughout 2017.
Macroeconomics and Industry Overview 2017
Macroeconomics condition indicated a recovering trendto 3.6% (yoy) throughout 2017, especially in developedeconomy countries such as United States, Eurozonecountries and China. In line with the condition, the commodity price was also increasing.
As of December 2017, copper price at the London MetalExchange (LME) surged to the highest level during thelast 4 (four) years after China commanded its mainmanufacturer to shut-down production to reducepollution during the winter season. Throughout 2017, thecopper and aluminum price grew around 20% level.At national level, Indonesia recorded economic growthof 5.1% or higher than 5.02% achieved in 2016. The Boardof Directors view national economy fundamental in 2017had been stronger followed with stable inflation andexchange rates throughout 2017. On the other hand, the
Board of Directors also analyzed that economic growthin 2017 was still underpinned by public consumption,investment and export.
We gladly appreciate commitments of our IndonesianGovernment in supporting local infrastructure projectsin 2017. Hence, contributing to growth of other economicsectors, including cable industry, We viewed 2017 as afavorable year. Despite metal price experienced significantvolatility, the Board of Directors noted performance of thecable industry remained positive.
Challenges in 2017
In the midst of stable economic condition, the Board of Directors noted few conditions which impacts onthe Company’s business development. Government’s initiatives in managing business and industry climate had been very supportive during 2017. Implementation of several policies by the central and regional governmentshad directly affected the Company’s business andoperational activities.
As a corporate entity that upholds compliance with Law and regulation, the Company had consistently attemptedto fulfill raw material needs from local suppliers.However, local raw material supply throughout 2017 wasless optimum compared to the growing cable demand.Company also noted occurrence of contract executionpostpone with our main customers with significant impacton Company’s performance.
Efficiency and competitive advantages are also main issues encountered by the Company in 2017. In themidst of fierce competition in cable industry at national,regional and global levels, the Company also experiencedhigher cost of production and Provincial Minimum Wage(UMP) which finally affected overall performance of theCompany. Production machine revitalization also becameanother concern for the Board of Directors in increasingthe Company’s competitive advantages in national andglobal cable industry.
Strategy Implementation and Performance Realization 2017
To overcome the challenges, the Board of Directorshad implemented strategic initiatives throughout2017. Couples of internal initiatives and policies hadbeen implemented in 2017 including efficiency, cash management, risk management policies and review on existing machineries productivity and effectivenesstowards machine revitalization and new technology adoption in the next year.
The Company also remained focus on Human Resources(HR) development as important factor in business andoperational activities. The HR development programcarried out in 2017 included soft-skill and hard skilltrainings as well as competency building for all personnelto increase competitive advantages of the Company.
Related to the people development throughout 2017, theCompany had also collaborated with foreign companyin employee exhange program related to Company’sproduction and business. The activities also aimed todevelop capability of our people through technicalassistance provided by the Company’s partners duringthe program.
Research and Development aspect also became oneof Board of Directors’ strategic focus in 2017. Although,the Company is still currently recognized as one of theleading cable manufacturer at national level, the Board ofDirector fully realized that the Company is facing strongcompetition with cable manufacturer at internationallevel, primarily with cable manufacturer from China,Vietnam and India.
The Board of Directors had conducted studies related to these conditions and managed the Company towards agrowth direction which balanced revenues target and risk exposure. Target which is expected to be achieved bythe Management is beyond profit but also ensuring the Company’s sustainability in long-run. Several efforts andinitiatives had been done in 2017 to build a sustainable company that is commited to compete in the long-termbasis and has capability to deal with dynamic situation aswell as other external factors.
Driven by good operational management, the Company received awards from various reputable institutionsthroughout 2017. In June 2017, the Company obtainedSMK3 Certificate with Gold Rank by Ministry of Manpowerand Transmigration and renewal of ISO 9001:2015 and ISO14001:2015 certifications as recognition of quality standardin the Company. The Company had also managed to obtainIndonesia National Certificate (SNI) Certificate, which is SNI Award 2017 in Gold Category, OHSAS 18001:2007 andPROPER award by Ministry of Environment throughout2017. Other awards for excellent performance in theindustry included Indonesia Best Electricity Award (IBEA)2017 in The Best Electrical Support – MDU Network. Theseawards reflect our commitment as a local company withconsistent support towards every initiative implementedby the Local Government.
In line with shifting at the stock market, the Company had executed stock split at Indonesia Stock Exchange in 2017.The change was considered as an initiative to increase the Company’s shares liquidity and value.
Realization of Performance Target 2017
Supported by accurate strategy implementation and commitment from all Management and employees, theCompany managed to book positive performance in 2017.The growth realization achieved 11% of 10% targeted inBudget Plan (RKAP) 2017.
The Company booked revenues of Rp2,258,316.81 million as end of 2017, which increased 11.67% from
Rp2,022,350.28 million booked in 2016. Operationalexpense was successfully controlled at optimum levelas reflected from total operating expenses and other expenses realization which decreased by 2.31% from Rp248,851.43 million in 2016 to Rp243,095.49 million in 2017.
Considering this achievement, the Management evaluates that the Company successfully achieved performancetarget as stipulated in the RKAP 2017.
Analyzing economic and industry growth as well as trend in 2017, the Company views business prospect tobe optimistic in the next year. Stable macroeconomic condition and stronger economic fundamentals inIndonesia will contribute to Company’s performancegrowth. Implementation of major events such as AsianGames 2018 and simultaneous Regional Election (Pilkada)will also trigger increasing household consumption andpromote conducive business climate for our industry.
Notwithstanding the positive business prospect ahead the Company concerns particular conditions which maybecome notable challenges, including the possibilityof more conservative appetite of financial and bankingindustries. Increasing demand in cable requirement whichwill encourage the Company to increase its productioncapacity. To optimize these opportunities, the Companyhas allocated budget to revitalize production machinesalong with other new investments.
Good Corporate Governance
Good Corporate Governance implementation in the Company refers to prevailing Law related to status ofthe Company as Issuer at Indonesia Stock Exchange. According to GCG Implementation Guideline applied forIssuers, such as Financial Service Authority Regulation (POJK) Number 21/POJK.04/2014 on Governance manualImplementation, SEOJK Number 30/SEOJK.2014/2016 onAnnual Report Format and Contents for Issuers or ListedCompany and other GCG Manuals applied in the Company.
The Company has also established Audit Committee, Nomination and Remuneration Committee and Code ofConducts as part of GCG structure and infrastructure.Throughout 2017, the Audit Committee had carried outduty as Board of Commissioners supporting committeein exercising supervisory duty over the Company’smanagement done by the Board of Directors. On theother hand, the Company’s Code of Conducts, or known as“EBEK (Etika Bisnis Etika Kerja)” is applied as guideline ofVoksel Personnel’s overall attitude, behavior and workingmethod in developing a sustainable business.
Changes in Board of Directors Composition
In 2017, the Board of Directors membership composition was changed pursuant to Annual General Meetings ofShareholders (AGMS) 2017 Resolutions which approvedresignation of Mr. Fumiaki Nakajima and appointment ofMr. Iwasaki Hiroya as Board of Directors member.
On behalf of the Management, the Board of Directors would like to thank our shareholders, the regulator,business partners, and especially our employees andstakeholders for supporting our achievement of theCompany’s performance throughout 2017. We wish thisharmonious relationship will sustain in the long-term inorder to maintain PT Voksel Electric Tbk. as a trusted localcompany with competitive advantages at internationallevel.
Jakarta, March 2018