Steel Pipe Industry (ISSP) has absorbed all Capex 2019

Deputy Director of Spindo, Tedja Sukmana Hudianto explained that this year's capital expenditure (capex) of Rp 50 billion has been absorbed by all.

"The absorption of capital expenditure this year is already outstanding. The capex is absorbed for the needs of machine efficiency beyond maintenance, purchasing of cutting machines, accumulative welding machines, "he explained when met by Kontan.co.id in Sidoarjo, Tuesday (26/11).

Tedja said that capital expenditure next year is certain to be greater than this year. But Tedja does not want to disclose the exact amount of capital expenditure next year.

Nevertheless, Tedja could notify several ISSP-coded shareholders' investment plans on the Indonesia Stock Exchange next year. Among them, upgrading one galvanized machine line that was previously still manual to be automatic. With that, it is expected that rough calculations of efficiency are quite large.

The Galvanized machine upgrade is targeted to be completed in the third quarter of 2020. The investment value for the upgrade is around Rp 8 billion. Tedja said upgrading just one machine had significantly increased capacity. In fact he said it could grow up to five times that of before.

In addition to renewing the Galvanized engine, Spindo will also conduct efficiency in other engines. There are two cutting machines in unit three that will be replaced. With this efficiency utilization can grow 10% yoy from 60% in 2019 to 70% in 2020.

The warehouse is still planned for a year there are two warehouses to be opened. Tedja explained how this was done to reach markets that had not yet been entered. It will also improve distribution connectivity. The closest plan is the completion of a depot in Makassar in the third quarter of 2020.

ISSP Corporate Secretary and Investor Relations Johannes Edward added that development and efficiency plans will be intensively carried out until 2021. "Spindo will also digitize the head office system and improve operational sales through digital marketing," he said.

Marketing development through social media for the dissemination of Spindo's products will also be maximized. Johannes gave an example, the company has a Facebook account that provides warnings to the public or prospective employees related to fraud. As for his Instagram account, there are many interesting programs and the introduction of Spindo products.

Meanwhile, besides updating the Galvanized engine, Spindo will also digitize trucks. Johannes explained this digitalization was applied to monitor fleet operations. Later with this digitalization, Spindo will be able to reduce the cost of funds by 10% or Rp. 40 billion annually.