Board of Directors
From left to right : Rizal Nangoy - Aripin - Yogiawan - David Lius - Wu Yongcheng - Shen Shao Junhua - Ferry Suarly
Dear Respected Shareholders and Stakeholders,
Throughout 2019, the Board of Directors has carried out our duties and responsibilities to manage PT Voksel Electric Tbk. in accordance with the plan and targets. As part of the Board of Directors accountability, we hereby submit the Annual Report 2019. In this Annual Report, we present the Company’s performance and achievements, efficiency efforts, strategic moves, innovations, and challenges, as well as business prospects.
Economic and Industrial Overview
As a result of the trade war between United States of America (USA) and People’s Republic of China, and also Brexit, global economic has been declining throughout 2019 with an estimated growth of 2.9%. These dynamics have a negative impact on investments and international trade in Indonesia. Although Indonesia is still able to maintain the fundamental of its macroeconomics through strong domestic consumption, controlled inflation, stable banking sector, as well as positive capital inflows, however the growth rate is below the economic target of 2019 which was 5.3%, with realization of 5.17% in 2018.
These dynamics also impacted the price of aluminum and copper which are the main materials in the Company’s business. In 2019, the price of both commodities was much lower than in 2018 as the result of a slow global market and low demand.
The greatest challenge the Company faced in 2019 was the postponement of the government’s plans and programs with regard to its 35,000 MW electricity project. The postponement has affected the Company’s performance, given that the Company has already invested in building high voltage cable factory which was already completed and operated commercially to support the government’s program.
The simultaneous presidential and legislative election also significantly increase the political temperature within the nation. As a result, the completion of various projects in almost every sector were delayed until the election was completed. Developers and contractor of infrastructure and property also tend to take wait-and-see attitude related to the construction of new projects. This situation led to the sales decline of power and telecommunication cable throughout the year.
As a part of long-term investment and expansion plan, the Company has completed the expansion of high voltage factory in 2019. This factory marks the increase of capability and capacity of production since the facility can always be used to produce various other products according to the market development and dynamics. The Company also continues to diversify its products, by launching submarine fiber optic cable to support government program in building telecommunication infrastructure. Operational efficiency has also been improved, by implementing the automation of Industrial Technology 4.0, and reducing electricity consumption for machineries.
To support the implementation of strategic development and expansion plan of high voltage cable, the Company has issued Voksel Electric Bond I in 2019. Through the issuance of bond which was ranked idA- by PT Pemeringkat Efek Indonesia (Pefindo), the Company has succeeded to raise Rp500 billion which will be used as working capital. At the same time, this success proves the market’s and investor’s confidence in the Company’s reputation, performance, and credibility.
The Company consistently maintain and improves its business processes, as well as integration and synergy with subsidiaries as supporting unit in the Company’s core business. The management of cash and inventory is also carried out strictly and carefully supported by an accurate sales plan. Cost control is also being carried out in a consistent and discipline manner, as part of operational efficiency process, as well as a risk management.
Company Performance in 2019
With the implementation of the mentioned strategic measures, the Company has succeeded in maintaining its performance and achievements amid of an uncertain industrial and economic condition. In 2019, the Company recorded a net revenue of Rp2,67 trillion, compared to Rp2,68 trillion in 2018. The decline of revenue is more or less influenced by the price fluctuation of copper and aluminum raw material.
Despite the aforementioned decline, the Company recorded a profit of Rp208.25 billion, increased by 98.51% compared to Rp105 billion in 2018. This result is equivalent to 99.86% from the profit target which is Rp208.55 billion set for 2019. This achievement is influenced by the success of cost efficiency and the decrease of raw material prices.
Despite the uncertainty of global and domestic economics, as well as the challenging industrial condition, the Company’s overall performance and business in 2019 has been in accordance with the projection and expectations.
The Board of Directors sees that cable industry has a very good prospects both for mid-term and long-term. As a developing country, the governments are still focusing on the construction of infrastructure, including power and telecommunication. We also think that the extension of the 35.000 MW project completion from 2019 become 2029 is a positive factor that will ensure the Company’s long-term sustainability. The plan to relocate the Capital to East Borneo is also a strategic opportunity to be explored.
Approaching 2020, the Company has also renewed its vision and mission as a part of long-term business development. With a vision of “To Become a World Class Total Cable Solution Provider in Indonesia” and the mission “To Contribute National Growth and Optimize Corporate Values through Superior Solutions and Sustainable Social Responsibility”, we will develop the Company into a Company which is not only produce cables, but also provides total solution.
To provide total solution, the Company is committed to continuously improve the capability and capacity of production in order to accommodate power transmission and distribution from power plant to houses. To become a world class Company, the Company is planning to expand export-based businesses, while also supporting the government program to reduce current account deficit. We are optimistic that these steps will further strengthen our position, performance, prospect, and sustainability in the future.
To support the government’s program related to Industry 4.0, the Company’s Human Capitals competency development program in 2019 has incorporated the materials related to Industry 4.0. We also intensify employee training in both domestic and abroad to develop their matrix competency according to the latest industry development.
The Company has also enforced its regeneration program to replace retiring employees. The implementation of transfer knowledge program and rotation from the Company to subsidiaries has also been carried out consistently. We believe that these programs will maintain the adequacy of the Company’s employee as well as ensuring the equal distribution of quality and competence in all organizational structure and business line.
Implementation of Good Corporate Governance
Throughout 2019, the Company has implemented Good Corporate Governance (GCG) effectively by referring to the best industrial practices. The Company is also committed to implement GCG continuously by complying to the law and regulations which is applicable for the issuer. The Company’s GCG implementations is based on Law No. 40 of 2007 on Limited Liability Company, GCG Manual issued by National Committee of Governance Policy, Financial Service Authority (OJK) regulations, and Indonesia Stock Exchange regulations.
On this basis, the Company has established a GCG infrastructures consisting of main organs and supporting organs as required by issuer. The Board of Directors has also been supported by Corporate Social Responsibility (CSR) Committee and Business Ethics Committee as a part of our commitments in both fields. By optimizing the organs function, we ensure the Company’s transparency and accountability. The implementation of corporate governance policies reflects the way we carry out the business in order to maintain our reputation as respected, accountable, and good business partner.
Corporate Social Responsibility
In 2019, the Company’s CSR Committee has organized various initiatives, programs, and corporate social responsibility activities focused on sustainability. In education field, the Company has established
PT Voksel Electric Tbk.’s Private Occupational Training Institute (LPKS) and continues to collaborate with Vocational High Schools (SMKs) and other industry players. With this collaboration, the Company provides training and technical education to vocational students/ college students and alumni to support them preparing working in the cable industry, also provide training and lecture as a sharing knowledge to the school and college.
In the field of environment, the Company has planted mangroves in West Karawang. The Company has also switched to solar panel in its offices, building wastewater treatment plant, as well as planting trees around the factory. These efforts are intensified in accordance with the Company’s commitment to improve its rank in Company Performance Rating Assessment Program in Environmental Management (PROPER) and to support environmental sustainability.
Changes in the Board of Directors’ Composition
The Board of Directors’ composition has changed in 2019 in accordance with the decision of Annual General Meeting of Shareholders in June 21, 2019. In this meeting, the attendants have approved the resignation of Mr Yamada Shoichi from his position as Director and appointed Mr Aripin as Director. The decision of Extraordinary General Meeting of Shareholders on October 18, 2019, has also approved the resignation of Mr. Zhou Chengcai from his position as Director and appointed Mr. Shen Shao Junhua as Director.
Accordingly, as of December 31, 2019, the Company’s Board of Directors composition are as follows:
|President Director||:||Mr. David Lius|
|Vice President Director||:||Mr. Wu Yongcheng|
|Director||:||Mr. Shen Shao Junhua|
|Director||:||Mr. Ferry Suarly|
We believe that the current composition of the Board of Directors has represented the diversity of expertise, competency, knowledge, and experience which are needed to manage the Company by considering the needs and complexity of business in power and telecommunication industry.
The Board of Directors would like to thank the Board of Commissioners for their guidance and advices, and also to all employees for their dedication and hard work in managing the challenges throughout 2019. We will continue working hard to improve the Company’s performance in 2020 in accordance with the new vision to become the world class total cable solution provider in Indonesia.
Jakarta, April 2020