All New Transformation WSBP

Dear Shareholders and Stakeholders,

First let us send our utmost gratitude to the presence of God Almighty who has bestowed His mercy and grace, hence PT Waskita Beton Precast Tbk, or also known as WSPB, has managed to pass the year of 2022 with proud achievements. After successfully going through challenging times due to the COVID 19 pandemic, we are now entering the stage of economic recovery, which has brought about a change in the business climate, especially in the precast concrete industry. WSBP responded to the increasingly challenging development of national precast concrete industry with a business transformation program in 2022.

WSBP launched a new vision, to Become a Trusted Partner in the Integrated Concrete, Construction and Modular Industry in Indonesia. Through this vision statement, WSBP confirms its commitment to make WSBP a competitive company by integrated concrete from upstream to downstream.

On this delightful occasion, please allow me on behalf of Board of Directors to explain WSBP strategies in order to realize this vision. The success of transformation through this new vision will certainly go well if supported with accurate strategies. The strategies that will be carried out in the transformation focuses on excellent operations, increasing the company’s competitiveness and brand image, as well as technology implementation and digitalization across all lines.

Contributing To The Nations

The construction industry’s contribution to Indonesia’s economic growth is in fourth rank, which is 10.48% of Indonesia’s Gross Domestic Product (GDP) in 2021.

The Central Bureau of Statistics (BPS) monitors the construction development through the Quarterly Construction Company Survey (SKTR) conducted on medium and large scale construction companies in Indonesia.

The world’s economic conditions are in the spotlight due to the geopolitical crisis that occurred throughout 2022, which also affected Indonesian economy. Even so, it is believed that Indonesia will be able to rise by continuing to focus on empowering domestic products and building quality infrastructure, hence Indonesia is able to increase economic equality throughout its territory.

Infrastructure development plays an important role in boosting economic growth, both at national and regional level, as well as reducing unemployment, alleviating poverty and of course increasing people’s welfare. Therefore, WSBP is committed to always support and contribute to various infrastructure development programs, because the availability of reliable infrastructure is very important to support economic activity and business growth.

Throughout 2022, WSBP actively participated in accelerating the completion of priority infrastructure development. WSBP’s Precast and Readymix Concrete Products are used in a number of toll road projects, water resources infrastructure projects, housing and building projects, and other infrastructure.

WSBP Precast and Readymix Concrete Products are applied to the construction of Cimanggis-Cibitung Toll Road, Cibitung-Cilincing Toll Road, Kayu Agung-Palembang-Betung Toll Road, Kamal-Teluk Naga-Balaraja Toll Road, and other toll roads. WSBP’s Modest Healthy Instant Home Products (RISHA) are used in post-disaster residential revitalization programs in Kupang, East Nusa Tenggara and Cianjur, West Java.

In addition to its contribution to infrastructure development, WSBP also plays an active role in improving people’s welfare and the environment through its Corporate Social Responsibility (CSR) program, which is in line with the Sustainable Development Goals (SDGs).

Through a program entitled “WSBP Inspring Kindness”, WSBP’s CSR directly touches various layers of people in need. WSBP Inspiring Kindness program supports the persons with disabilities and the elderly. In addition, WSBP also focuses on advancing the quality of education for Indonesia’s young generation in a number of regions.

In line with the 13 goals of SDGs, namely “Climate Action”, WSBP also carries out a reforestation program in West Java area and implements production processes that are oriented towards green industry standards.

Influence Of External Factors

The volatility of global geopolitical conditions due to the conflict between Russia and Ukraine and the impact of COVID-19 Pandemic which has been going on since 2020 has had a significant impact on global economic stability.

The conflict between Russia and Ukraine had affected the rising of world oil prices to more than USD 100 per barrel, the highest level since 2014. These conditions also led to an increase in commodity prices and disruption of world supply chains which resulted in an increase in the global inflation rate.

The weakening of the exchange rate and inflation were also felt by developing countries such as Indonesia. These two risk factors are the dominant factors affecting various industries in the country. The multiplier effect of rising world oil and gas prices as a result of the Russia and Ukraine conflict is also being felt by industry players in the country.

The spread of the Omicron COVID-19 variant in the first quarter of 2022 also caused a temporary disruption of Indonesian economic activity. The government’s alertness in carrying out phase 1 and 2 vaccination programs was able to quickly reduce the potential for a prolonged crisis.

Even though faced with a global situation that is full of uncertainty, Indonesia managed to close the year of 2022 on a good note. A number of indicators and survey results show that the National Economic Recovery program launched by the Government was able to sustain the domestic economic situation. This is reflected in the achievements of economic growth, increased exports, controlled inflation, and maintained levels of public consumption.

In order to promote economic growth and equity, the Government of Indonesia established targeted infrastructure development policies. In the 2022 State Revenue and Expenditure Budget (“APBN”), the Government allocated an infrastructure budget of Rp365.8 trillion which is spread across various Ministries, Institutions, and Transfers to the Regions.

The government has stipulated 200 National Strategic Projects (“PSN”) as ratified in the Regulation of Coordinating Minister for Economic Affairs of the Republic of Indonesia Number 9 of 2022 concerning Amendments to the Regulation of Coordinating Minister for Economic Affairs Number 7 of 2021 on Changes to the List of National Strategic Projects.

In accordance with the Government’s aspirations to support equality, 2022 was also be marked by the commencement of works on the construction of National Capital City (“IKN”) in Penajam, East Kalimantan. The Ministry of Public Works and Public Housing (“PUPR”) has received a special budget allocation of Rp5.1 trillion for the construction of the National Capital City in 2022.

Government policies in regional infrastructure development and the development of National Capital City have had a positive impact on the construction and precast concrete industry. Based on the Indonesian Economic Growth Report for the fourth quarter of 2022 released by the Central Statistics Agency (“BPS”), the construction sector recorded a growth of 2.01% or lower than the previous year of 2.81%. Meanwhile, the construction sector’s contribution to total Gross Domestic Product reached 9.77%.

Analysis Of Company Performance In 2022

2022 was a challenging year for WSBP. Uncertain global and domestic geopolitical as well as economic conditions were the dominant risk factors for the Construction and Precast Concrete Industry. The increasing price of fuel and main raw material for production is inevitable.

Furthermore, as an implication of the declining performance due to the pandemic that has occurred since March 2020, on January 25, 2022 WSBP was declared in the Postponement of Debt Payment Obligations (PKPU) according to the Commercial Court Decision at Central Jakarta District Court with case register no. 497/Pdt.Sus-PKPU/2021/PN.Niaga.Jkt.Pst.

By implementing good corporate governance principles, WSBP successfully completed a financial restructuring through PKPU which was marked by Homologation at the Commercial Court at Central Jakarta District Court on June 28, 2022.

During this challenging period, WSBP was able to realize its commitment to achieve sustainable performance growth and increase shareholder value. By implementing a targeted corporate strategy and launching a comprehensive business transformation program, WSBP managed to record an encouraging performance growth, in line with the targets set out in the 2022 Corporate Work Plan and Budget (“RKAP”).

WSBP’s Targets & Policies in 2022 as stated in the RKAP are as follows:

  1. Precast & Post Tension
    Develop types of precast products to meet the needs of target sectors and increase competitiveness through lean manufacturing.
  2. Readymix & Quarry
    1. Increase competitiveness to increase sales of Readymix to large projects.
    2. Empowering unutilized capacity by conducting retail sales.
    3. Building a Quarry development strategy to reduce Precast and Readymix raw material costs.
  3. Construction & Installation
    Develop a modular construction business by offering modular construction (prefabricated) for the existing (toll roads) and new (ports and airports) sectors.
  4. Equipment
    1. Building equipment management excellence to ensure equipment availability.
    2. Utilizing excess capacity to get additional income.

Until the fourth quarter of 2022, WSBP has succeeded in obtaining new contracts of Rp1.53 trillion, supported by PT Waskita Karya (Persero) Tbk Group project and an increase in the market share of government, state-owned and private projects.

WSBP is also able to maintain competitiveness among competitors in the concrete industry. Throughout 2022, WSBP managed to record a tender winning rate of up to 56%.

In accordance with the long-term strategy, WSBP continues to focus on developing the market share of Government, SOE/ROE, and Domestic and Overseas Private projects. This strategy was realized by expanding the marketing network from 4 Sales Areas to 6 Sales Areas, establishing a Strategic Development Division which is responsible for strategic marketing programs, and strengthening digital aspects in the marketing process.

Throughout 2022, WSBP posted total revenue of Rp2.06 trillion which was supported by the Precast, Readymix & Quarry concrete, as well as Construction Services lines of business. The Precast segment is still the main engine of WSBP’s revenue, contributing 40.3% of total revenue, through the sales of high quality concrete products such as Spun Pile, Girder and Full Slab to national infrastructure projects.

The Readymix product segment, which is widely used in medium to large scale construction projects, managed to contribute 19.9% of WSBP’s total revenue in 2022.

In accordance with the Company’s mission to become a one stop solution that provides products and services from upstream to downstream for customers, WSBP also recorded significant growth in the Construction Services business segment. This segment recorded revenue of Rp820.44 billion, an increase of 203% compared to 2022. In total, the Construction Services segment contributed 39.8% of WSBP’s total revenue.

Throughout 2022, WSBP recorded a gross profit of Rp304.22 billion with a gross profit margin of 14.75%. This is in accordance with WSBP’s long-term commitment on sustainable improvement of operational performance.

In line with the commitment to cost efficiency proclaimed by management through the rationalization and digitalization program, WSBP succeeded in reducing the realization of general and administrative expenses in 2022 by up to 14.98% to Rp1.03 trillion compared to the realization in 2021.

WSBP also demonstrated efficiency in the marketing and sales processes by recording a reduction in selling expenses of up to 24.36% in 2022. This efficiency was supported by reduced spending on marketing expenses. However, the management is committed to always maintaining the effectiveness of marketing process which is a crucial point for the Company’s performance growth in the future.

Supported by the results of financial restructuring in 2022, WSBP recorded Other Income of Rp2.40 Trillion or an increase of up to 2142.74% compared to 2021.

Looking at the realization of Net Profit as of December 31 2022, WSBP managed to achieve 93% of the target set in the 2022 RKAP. The details of these achievements are:

  1. The new contract value for 2022 is Rp1.53 trillion or 60.30% of the target in 2022 RKAP revision of Rp2.54 trillion;
  2. 2022 revenue amounted to Rp2.06 Trillion or reached 102.46% of the target in 2022 RKAP Revision of Rp2.01 Trillion;
  3. Gross profit for 2022 amounted to Rp304.23 billion or reached 107.21% of the target in 2022 RKAP Revision of Rp283.76 billion;
  4. Net Profit for 2022 amounted to Rp675.77 billion or reached 92.62% of the target in 2022 RKAP Revision of Rp729.63 billion.

These achievements show that WSBP managed to record improved performance compared to the 2021 period.

Board Of Directors’ Role In Formulating The Company’s Strategy And Strategic Policy

Board of Directors, assisted by all elements in WSBP organizational structure, formulated the Company’s 2022 strategies and strategic policies by taking into account the external or internal conditions of the Company’s business environment. Board of Directors analyzed the opportunities and threats of external business environment, as well as the internal strengths and weaknesses of the Company.

The risk management department conducted a risk assessment of Corporate Top Risk in relation to the formulated strategy and made strategic mitigation measures, in order to ensure that the risk exposure faced by the Company is at a tolerable level.

In addition, WSBP also considers the aspirations of Shareholders and other Stakeholders in determining targets, strategies and policies. Board of Directors held regular discussions with various internal and external elements in formulating the Company’s Strategies and Strategic Policies.

Based on the analysis and the results of discussion held, Board of Directors collegially set targets and strategies for 2022 at Board of Directors Meeting to respond to challenges from business, market and economic conditions.

Process Conducted By Board Of Directors To Ensure The Implementation Of Corporate Strategies

The Management continues to monitor performance results from various aspects on a regular basis which can be seen in the Company’s Financial Statements and Annual Report regarding annual reporting to the public or regulators. The Management has also compiled a Management Report as a form of fulfilling Good Corporate Governance.

The implementation of corporate strategy can be carried out well, including by holding weekly Board of Directors meetings, Coordination Meetings with all Divisions and Units, and Limited Board of Directors Meetings. This was done to ensure that all WSBP targets and strategies can be implemented and Board of Directors can take corrective and preventive steps for risks and challenges that arise in the current year.

In addition, to ensure that smooth implementation of WSBP strategies, WSBP also established the 2022 work programs to stay in line with the targets to be achieved. All programs that have been prepared by each WSBP division were still supported by the Business Transformation programs carried out in 2022, which consist of 3 Business Transformation pillars including Operational excellence, business nourishment, and technology & digitalization.

Furthermore, in responding to the dynamics of business environment during 2022, Board of Directors carried out the followings:

  • Determine the quick wins strategy;
  • Establishing a corporate transformation team;
  • Establishing a special team to increase cost efficiency in the corporate environment which consists of several related sections.
Board Of Directors’ Review On The Implementation Of Company Strategy

Pursuant with Good Corporate Governance principles implementation, in order to ensure the effectiveness of the pre-established strategies in 2022, Board of Directors held discussion regarding corporate performance every month in weekly Board of Directors meetings. The discussion includes performance achievements and their comparison with the RKAP targets, as well as the effectiveness of strategies implemented by the Company and corrective actions.

Limited Board of Director meetings attended by Board of Directors and Vice Presidents are held to discuss technical issues and existing constraints every week in order to produce decisions and policies that are faster and more precise.

The Management regularly visits the Company’s production units and strategic projects with Management Walkthrough agenda. In these activities, the Management discusses in details the implementation of strategies applied at project unit and team levels and evaluates the effectiveness of the implementation.

Board of Directors also prepares Quarterly Management Report as a tool to evaluate the implementation of strategy and the effectiveness of strategy set out in the RKAP.

The implementation of WSBP strategy can also be monitored by each division by continuing to safeguard the agreed targets in the 2022 RKAP Book. This can also be reflected in terms of Key Performance Indicators (KPI) achievement in each Directorate or Division during 2022.

Obstacles, Challenges, and Solutions

Throughout 2022, WSBP had to deal with number of challenges that require the Company to be more agile and adaptive in carrying its their business activities. WSBP management actively took corrective actions and mitigated the challenges and risks that occur.

External challenges faced by WSBP include the publication of negative reports in the media regarding the restructuring process and lawsuits. In the short term, this will affect WSBP’s image, and will reduce customer and public trust in WSBP in the long term. In overcoming this, WSBP has promptly made efforts to manage information effectively and prioritized the principles of openness and transparency to stakeholders.

In 2022, WSBP also faced the challenges of supply chain disruption and rising raw material prices, caused by the economic turmoil and global geopolitical conditions which resulted in an increase in the prices of the world’s main commodities.

Based on data from the Central Statistics Agency (BPS), the price of cement, which is the main raw material for concrete products, has increased by 8.25%, as well as the price of fuel which has an impact on rising shipping and expedition costs.

Furthermore, WSBP’s status that was undergoing a financial restructuring process in the first and second quarters of 2022, has affected the quantity of raw material supply from suppliers. This created a challenge in meeting production and sales targets according to the schedule agreed in the contract.

In dealing with such situations, WSBP focused on the solution efforts, which were made by establishing quick wins strategy, which consists of:

  1. Increase the intensity of communication with customers and other stakeholders in order to provide accurate and relevant information regarding WSBP’s strategies, ongoing production activities, new market potentials that have been obtained and current project activities, hence the stakeholders’ trust in WSBP can increase; And,
  2. Improving the fulfillment of material needs and selecting more selective suppliers so that they can provide more competitive raw material prices which in turn have a positive impact on product selling prices that are better and can compete in the market;

To anticipate any other business constraints or challenges, WSBP has identified the risks of the targets to be achieved as stated in the Corporate Work Plan and Budget (RKAP), Corporate Long Term Plan (RJPP), and Corporate Key Performance Indicators (KPI) which is then cascaded into KPIs for each Work Unit, Production Unit, and Supporting Unit. Risk identification is carried out at strategic level and operational level. After all risks have been identified and a list of risks has been made, risk measurements are then carried out so that the likelihood of their occurrence and the magnitude of the impact of losses can be measured. The results of risk measurement are in the form of risk map and risk status (very high, high, medium, low). From the results of risk measurement, appropriate mitigation efforts will be prepared in order to anticipate the occurrence of risks that have been mapped.

The massive turmoil in 2020 due to the COVID-19 pandemic caused a slowdown in economic growth in several business sectors, and also had affected the construction and precast concrete industry. These conditions led to an increase in commodity prices and disruption of world supply chains which resulted in an increase in global and domestic inflation rates, as well as making the year of 2020 a challenging period for WSBP.

The soaring inflation in Indonesia has became a challenge for WSBP to continue to answer market needs, namely providing quality concrete products at competitive prices. In addition, another challenge faced by WSBP in 2022 was the degradation of the Company’s brand image, which resulted in a decreasing customer trust in WSBP products.

To address and respond these challenges, we were trying to maintain going concern and financial sustainability by applying a number of strategies as outlined in 9 WSBP Transformation Breakthroughs:

  1. Lean Operation
    Increase the utilization of factories
  2. Cash Engine
    Improving cash management for retail, optimizing capex
  3. Talent booster
    Non-Fundamental System Analytics Development
  4. Competitiveness
    Preparation of retail strategy, acceleration of slow moving inventory
  5. Strategic Partnership
    Carrying out expansion and affiliation strategies, cooperation with constructive stakeholders
  6. Brand Intelligence
    Performing corporate branding
  7. Integration Data Management System
    Implementation of risk-based operating system
  8. Product Newness
    Market-based and Green Industry standard product development
  9. Digitization
    Implementation of digital administration in the company, quality data intelligence

The implementation of these 9 breakthroughs is believed to be able to answer all the challenges faced by WSBP.

Business Outlook For 2023

Seeing the predictions of a positive economic and industrial climate next year, Board of Directors seeks to optimize emerging business potential. This is reflected in the strategic policies that have been prepared as a reference in carrying out operational performance in 2023. This is also the basis for setting higher targets in the 2023 RKAP compared to 2022. WSBP has also developed strategic policies and initiatives, along with the faith to be able to implement them in 2023.

WSBP has been evaluating the 2022 Sales Performance. To answer challenges and seize opportunities that exist in 2023, WSBP is targeting growth in NKB acquisition of 138% of 2022 NKB target, by targeting NKB acquisition of Rp3.8 trillion. External will be the main market segment that will be targeted by WSBP at 61% (R 2.3 Trillion), while the Internal Segment (WSKT Group) will be only targeted at 39% (Rp 1.4 Trillion). Construction Services is a usage line that will be prioritized by WSBP (46%), followed by Readymix (28%) and Precast (26%).

In order to achieve the projected value of RKAP that has been determined for 2023, the WSBP needs to develop a strategy that can be grouped into 2 parts, namely long-term strategy and short-term strategy.

Short-term strategy is a strategy prepared with a timeline of approximately 1 year. WSBP’s short term strategy is as follows:

  1. Maintain Product Quality & Consistency
    Including the implementation of a reliable and responsive quality monitoring system, there is a need for a system to maintain product quality consistency.
  2. Improving Delivery Reliability
    Develop a delivery reliability monitoring and troubleshooting system that can detect and speed up resolution of issues that still occur in the field accompanied by root cause analysis.
  3. Improving Communication Skills
    WSBP frontliners must improve their communication skills with customers, in order to encourage increased quality perceptions and consistently communicate their strengths.
  4. Using Corporate Networks to Develop Market Capability in High-Rise and Commercial
    Market capability development is the key to competing against various types of competitors. Corporate networks can help building this capability.
  5. Increasing Price Competitiveness
    Price remains the main consideration. WSBP must be able to innovate in cost management, so that selling prices are more competitive in the market. This Cost Innovation include: supply, process, and logistics management.
  6. Improving Market Analysis Capability
    A field team that is able to dynamically conduct market analysis and competitive mapping is required, so that they can proactively develop a marketing strategy that is corporately consistent, but at the same time adaptive to real market conditions.
  7. Key Account Management
    Creating Key Accounts in the project sector belonging to the Government, SOE & Private, Internal WSKT, and Construction Consultants as a representation of the marketing strategy in certain targeted areas.

Key Account Management is divided into 4 groups, namely:

  • Government Key Account: Serves to carry out analysis on projects originating from APBN and APBD, such as Ministries and Agencies that have a construction spending budget in 2023, and is able to carry out intensive approaches to stakeholders in government levels both at the central and regional levels.
  • SOE & Private Key Account: Serves to analyze and compile customer pipelines in the SOE & Private sectors, both those that have become targets in the 2023 RKAP and as additional information on potential of other projects.
  • Waskita Group Internal Key Account: Synergy between the parent company, main business unit and subsidiary companies so that a solid collaboration can be formed and become a support system to contribute to the success of project implementation within Waskita Group environment.
  • Construction Consultant Key Account: Establishment of horizontal communication with construction consultants so that they are able to play an active role in planning a project targeted by the Company. In the implementation of each sales and construction area, there will be personnel who are representatives of central marketing called Marketing Representatives.
  • Marketing Representative functions as an extension of central marketing key account in the area or sales area that will be targeted.
  • Marketing Representative will collaborate with Sales Area Manager, Construction Marketing Manager and Sales Engineer in sales area in obtaining contract on a particular project.

Long term strategy is a strategy prepared by WSBP with a timeline of more than 1 year. The Company’s long-term strategy includes:

  1. R&D for Mass Innovation
    Innovation is required not only in new products, but also in the ability to make these new products cheaper and easier to apply.
  2. Market Education & Consultants
    Driving the adoption of innovative products is key in this quadrant. There should be active efforts to socialize market innovations as widely as possible, especially through project consultants.
  3. Develop Branding Capacity
    To be able to encourage mass adoption of new innovations, WSBP must be known as a thought leader in the industry. Various B2B Branding initiatives are needed, targeting key stakeholders.
  4. Developing Retail Market Capabilities
    Intensive efforts are required to build retail market capability. Starting from the business landscape mapping, positioning & differentiation strategy preparation, and the development of tactical marketing plan. Tactical planning must be specifically translated to the area.
  5. Develop Branding Capability
    Develop strong branding activities to support sales activities. Starting from visual identity, key messaging, to a comprehensive campaign plan.
  6. Focus on Customer Service Strategy for Retail
    Marketing and Branding must be accompanied by the ability to serve retail customers whose characteristics are different from the large customers that WSBP usually encounters. Starting from strategic service blueprints, to standard service scripts accompanied by the development of a service mindset for all front liners.
Corporate Strategy Implementation

Business strategy is a plan designed to attract and acquire consumers, as well as sell products or services. WSBP has prepared a business development strategy that can be grouped into 2 types, namely Short Term Strategy and Long Term Strategy. The breakdown of the two types of strategies is as follows:

Implementation of Short Term Business Strategy

No Short Term Strategy
1 Increase revenue stream from owned lines of business according to market demand
2 Mapping the business according to the company’s current business conditions
3 Business diversification that is relevant to the company’s articles of association (management of logistics jetty)
4 Maximizing quarry potential and make as one of additional revenue from raw materials
5 Optimization of owned equipment with a rental system through cooperation with heavy equipment companies

Implementation of Long Term Business Strategy

No Long Term Strategy
1 Implementing Lean Operation in organization and business processes
2 Conduct market and business analysis of new products that will be included in the future portfolio (AAC, HCS)
3 Completing investments that are still on progress (completion of commissioning, etc.)
4 Divestment to optimize assets that are no longer used
5 Mapping potential business collaborations which provide additional profit for WSBP
6 Integrate with risk management in business processes according to the company’s framework
7 Building the brand image as a trusted manufacturing and construction company
8 Maintain customer satisfaction so as to increase the number of repeat orders

Until 2022, the internal market still dominateed WSBP’s market segment, where the majority came from Waskita as the parent company. It is expected that in 2023, WSBP will expand into external markets.

Maintaining Customer Satisfaction for Repeat Order

Customer satisfaction is one of the main factors that can influence repeat order. High customer satisfaction indicates that customers are satisfied with the services offered by WSBP and increase their desire to re-purchase products/services, and this will benefit WSBP in the long term.

PT Waskita Karya (Persero) Tbk is one of the customers with the largest repeat order rate due to its status as the holding company, which will provide supplements in the form of projects to be carried out by WSBP. Through products and services quality improvement, these two things can be a catalyst for customer satisfaction level so that they will make pre-order.

Products with Quality in Accordance with Requirements

Product quality control is systems and activities carried out to guarantee a certain level or standard of product quality in accordance with planned specifications starting from the quality of raw materials, production processes, processing of materials into finished products to delivery to consumers so that the resulting products are effective and efficient.

For WSBP, maintaining the quality of Precast and Readymix products in accordance with applicable standards is a priority in business processes, because will lead to the following benefits for the Company:

  • Mitigating the risk of incurring repair costs
  • Reducing consumer complaints or rejection
  • Allows output grading
  • Increase or maintain company image

Lines of Business Differentiation

Lines of Business Differentiation Strategy is an approach developed by a company by providing something unique, different and personalized to customers from products/ services offered by competitors in the market. Differentiation strategies implemented by a company can be grouped into 2 types, namely broad differentiation strategies (building a different brand/business) and focused differentiation strategies (unique features of products/services). WSBP can carry out a broad differentiation strategy through the addition of lines of business that have never been done before such as logistics services (jetties), and rental of equipment.

The benefits of lines of business differentiation are as follows:

  • Reducing price competition
  • Providing unique products/services
  • Better profit margins
  • There is no substitute for the product/service

Pricing Strategy

Pricing strategy is a company’s policy in setting the price of products/services offered. This is a key factor in securing profit/revenue for the company, in which optimal demand is expected to be generated at the right price. There are 2 types of pricing strategies, namely market-based pricing (setting prices with market as consideration) and costbased pricing (setting prices with production/service costs as consideration). WSBP can implement a cost-based pricing strategy because by implementing this strategy, the Company can include the cost efficiency factor for production/service preparation as an important component in increasing the income offered by lines of business.

Technology Advantage

Technology is a major factor that can determine the success of a business. Higher technology owned will have more potential to increase productivity, reduce operational costs, facilitate making crucial decisions, and open up the potential for other business strategies. WSBP can implement this strategy by improving the quality of its technology in accordance with the times in order to continue to increase WSBP’s competitiveness with other competing companies in terms of the quality of products and services produced.

Segmentation by Portfolio

Segmenting based on portfolio is a way that can be taken by a company to be able to outline all lines of business that have been conducted and potential lines of business that can be added in the future. Accompanied by WSBP lines of business portfolio timeline, will make it easier for the Company to arrange schedules according to time priorities for each line of business.

Development of Human Capital (HC) and Information Technology

Human Capital (HC) is an important aspect in supporting WSBP’s sustainability of. For this reason, WSBP continues to develop all WSBP people through appropriate, systematic and sustainable human capital management. WSBP also continues to innovate in developing employee capabilities. By doing these, all WSBP human capital can have competent quality and are ready to adapt to any changes that occur.

There are several programs to improve the performance of Human Capital, as follows:

  1. Automation and centralization of Waskita Beton Precast Human Capital management through the implementation of Waskita Employee Self-Service Technology (WEST).
  2. Increasing the competencies of Human Capital through the Precast for Non-Precast program (Hard Competency) and Leadership Development Program (Soft Competency), including:
    1. Organizing hard competency training with the Precast For Non Precast (PFNP) program for each job level. With the aim of providing an in-depth understanding of precast knowledge for every WSBP people. This training is divided into 3 (three) program levels: Basic (for the public), Intermediate & Advance (for precasters specifically).
    2. The Leadership Development Program (LDP) training is intended to meet the gap competency (soft) for managers and vice presidents.
    3. Develop & run a cooperation program related to increasing employee competencies with external institutions/agencies (LPJK/Kemnaker).
  3. Formation of a Talent Management System involving relevant stakeholders, including:
    1. Digitizing the performance management process using the SunFish HR/WEST system so that the performance monitoring process can be carried out by employees and their direct superiors.
    2. Mapping and implementation of employee assessment and all BoD-1 to BoD-3.
    3. Applying the Qualified personnel fitting principle in determining employees in one position.
  4. Dissemination & Internalization of AKHLAK culture (Trustworthy, Competent, Harmonious, Loyal, Adaptive, Collaborative) to all employees and implementation of the Change Agent program.
  5. Improving the recruitment program to meet the needs of company employees.

Meanwhile, in an effort to maintain the level of availability of IT services, WSBP has a SAP Disaster Recovery Center (DRC) and a backup server system that can minimize downtime. To support efficiency, WSBP has optimized the use of Microsoft Office 365 Services and open-source software, for application/ system development needs, so that manual processes can be transformed into digital processes without the need for high costs.

Development of Corporate Governance Implementation

One of the big agendas in strengthening WSBP organization is the implementation of Good Corporate Governance (GCG). As a business entity with a status as public company, WSBP is required to carry out business management in compliance with prevailing laws and regulations. The application of GCG principles is primarily based on 5 (five) basic principles, namely transparency, accountability, responsibility, independence and fairness, as released in the General Guidelines for Good Corporate Governance issued by the National Committee on Governance Policy (KNKG).

The Company’s management has endeavored to implement all of GCG principles as outlined in the organizational scheme and policy tools, as well as various programs and activities. In terms of policy tools, Board of Directors together with Board of Commissioners has developed various guidelines and regulations that can limit the responsibilities of each WSBP organ. This boundary is important so that the pattern of relationships between organs can be harmoniously established, and is able to support the achievement of vision and mission that has been set.

WSBP also holds General Meeting of Shareholders (GMS) as a forum for shareholders to determine a number of limited strategic policies for the continuity of the Company. The existence of various supporting organs such as Corporate Secretary, Internal Audit Division and Risk Management & Control Division, is supported by policy tools as GCG processes and mechanisms that are enforced within WSBP.

The management periodically reviews and updates its policy tools, so that they continue to have relevance both to the development of WSBP, the development of regulations in force, and the growth of banking industry in Indonesia. In order for the application of GCG principles and practices to achieve its ultimate goal, which is to become part of the culture, WSBP considers it important to socialize GCG to all WSBP employees.

In addition, evaluating, monitoring and improving the implementation of GCG within WSBP is also an important part of overall GCG development so that the implementation of GCG can be increased every year. Assessment is carried out both on the implementation of GCG aspects, as well as risk management assessment in accordance with OJK compliance. WSBP’s commitment to implementing GCG is reflected in the achievement of GCG assessments which increased from the previous year. In 2022, the Company conducted GCG assessment for 2021 fiscal year with a score of 85.653 and “Very Good” predicate. In 2023, the Company conducted GCG assessment for 2022 fiscal year with a score of 81,489 and “Good” predicate.

Analysis of 2022 GCG Assessment Results and Comparison with 2021

Consistently, WSBP is committed to continuously implementing GCG principles and making improvements to improve GCG quality in all lines of business. At the beginning of 2022, WSBP conducted GCG self-assessment for 2021 fiscal year with assistance from the Center for Accounting & Finance Development (PPA&K) and WSBP managed to obtain a score of 85.653 with “Very Good” predicate. Whereas at the beginning of 2023, the Company’s GCG assessment for 2022 fiscal year year was conducted by the Financial and Development Supervisory Agency (BPKP), and managed to obtain a score of 81.489 with “Good” predicate.

Description 2022 2021
GCG Assessment Results 81.489
“Very Good”
Risk Management

WSBP is dealing with several issues, namely PKPU process, negative news, financial liquidity, downgrade of credit rating, suspension of shares and the COVID-19 pandemic. WSBP realizes that in carrying out business activities to achieve its goals, it will be faced with various risks including the risk of obtaining a bankruptcy decision, reputational degradation, insufficient resources, production utilities not being achieved, revenue not being achieved, quality and low employee productivity. Based on this, WSBP has stated its commitment in the Risk Management Policy of PT Waskita Beton Precast Tbk No. 05.ISO31000.2022.01 dated January 28, 2022, that the risk management aspect is an important factor that will determine the continuity of WSBP. This commitment is in line with the efforts to improve the Company’s business operations through:

  1. Implementation of integrated risk management in accordance with Good Corporate Governance to achieve company goals and objectives.
  2. Increased awareness of risk culture in every work activity so that it becomes an integrated part of the company’s business processes.
  3. Considering risks in every strategic and operational level decision-making in accordance with the established risk tolerance.
  4. Inform risk events that cause losses or opportunities for WSBP by requiring risk managers at every level of the organization to carry out the process of identifying, analyzing and evaluating risks and reporting the realization of control and risk management periodically as evaluation material for a continuous risk management process.
  5. Develop the competencies of risk management human capital, provide a risk management budget, and provide information technology support for adequate risk management.
  6. Use the results of risk register as a basis for inspection and supervision (Risk Based Audit) in order to improve performance and accountability.

The implementation and development of WSBP risk management refers to regulations regarding sound corporate governance and the best effective and efficient risk management practices. In addition, WSBP also refers to COSO Enterprise Risk Management—Integrated Framework (COSO ERM) and ISO 31000:2018 concerning Risk ManagementPrinciples and Guidelines. Furthermore, to encourage an appropriate Risk Management program, WSBP has established Risk Management Guidelines as approved in Board of Directors Decree No. 01/SK/WBP/PEN/2022 dated January 07, 2022 concerning Guidelines for Risk Management for PT Waskita Beton Precast Tbk. This risk management policy regulates the reference for the implementation of risk management in all WSBP activities, from strategic level to operational level, the authorities and responsibilities of all parties, including the role of top management in establishing a risk culture within WSBP.

WSBP has also made efforts to strengthen governance and integration of risk management in manufacturing and construction business activities through the establishment of Governance and Risk Management Guidelines as ratified in Board of Directors Decree No. 148/SK/WBP/PEN/2021 dated December 29, 2021, the implementation of pre-screening process, project risk scoring, risk-based feasible analysis and decision making through the Committee.

Whitsleblowing System

Whistleblowing System is a form of WSBP’s commitment to implementing GCG practices and as a means of conveying systematic information related to the management of WSBP so that this information can be managed and followed up by referring to applicable laws and regulations. WSBP has built and implemented the Whistleblowing System through internal rules contained in WBS Whistleblowing System policy stipulated in Board of Directors Decree No. 99/SK/ WBP/PEN/2021 concerning Guidelines for Whistleblowing System of PT Waskita Beton Precast Tbk.

The Company implements the Whistleblowing Reporting System in order to support the efforts to implement Good Corporate Governance. This is done in preventing acts of fraud, namely by reporting incidents of violating behavior and encouraging a culture of honesty and openness within WSBP. In addition, WSBP can use the WBS as a basis for designing necessary corrective actions and provide an early warning system for possible problems due to future violations.

To be able to maintain and improve the implementation of GCG pillars, an applicable Whistleblowing System (WBS) process and mechanism is needed so that reporting of violations of GCG principles, the Company’s Code of Conduct, as well as violations of laws and regulations within the Company can be carried out. To maintain the independence of WBS processes and mechanisms, the Company has formed a WBS Team that reports directly to the President Director.

Reporting of these violations can be submitted through the Whistleblowing System channel provided, namely via email or directly reported to the Company’s WBS Team. With a note, the report submitted by the whistleblower at least contains information regarding the whistleblower’s personal data (name, address, telephone number, and work unit). Furthermore, any indications of violations of the code of conduct or other disciplinary violations can be submitted to the WBS Team. After that, WSBP will follow up on reports that have the potential to harm materially and can damage WSBP’s image caused by irregularities, manipulation, and so on.

Commitment on Social and Environmental Responsibility

The success of WSBP’s business is not only determined by profitability alone, but also how WSBP contributes to non-economic aspects, such as environmental and social aspects that can realize the Sustainable Development Goals (SDGs). Therefore, WSBP is fully committed to carry out consistent and sustainable Corporate Social Responsibility (CSR) programs with reference to the three bottom line concept that emphasizes a balance between 3 (three) important aspects in sustainable development, namely People, Profit , and Planet.

In the Corporate Social Responsibility program, WSBP refers to the Minister of SOE Regulation No. PER-6/MBU/09/2022 dated September 15, 2022 on Amendments to the Regulation of Minister of State-Owned Enterprises No. PER-05/MBU/04/2021 dated April 20, 2021 concering Social and Environmental Responsibility Program for State-Owned Enterprises.

Stakeholders have an important role in the CSR programs carried out by WSBP, so that good and harmonious relationships are established and mutually beneficial between WSBP and stakeholders, both internal and external. Through this good relationship, it is hoped that WSBP will be able to realize the hopes, aspirations and input from each stakeholder which is useful in the process of formulating the Corporate Social Responsibility program and the Company’s value creation business.

WSBP’s CSR programs are carried out in social, education, health and environmental sectors. Through the CSR programs, the Company wants to share with the surrounding community as a whole. It is hoped that our good programs will be of great benefit to the community.

Some of the CSR programs carried out include:

  1. Padang Earthquake Relief
  2. Mass Circumcision
  3. Eid al-Adha Program
  4. Donation to Tresna Wardha Budi Mulia 1 Foundation
  5. Donation to Indonesia One Disability Foundation
  6. Blood donors in collaboration with PMI (Indonesian Red Cross)
  7. School supplies and uniforms assistance to SD Negeri 01 Curug, Karawang Regency
  8. Improvement of road access around Harapan Island which is located in the operational area of BP Cluster South Sumatra II
  9. Cianjur earthquake donation
  10. Donation for Orphans at Bojanegara Plant
  11. Donation for Orphans at Sadang Plant
  12. School supplies donation to SD Negeri Boreas in Subang
  13. Social service to Bartolomeus Blind Foundation Social
  14. Assistance for Victims of Natural Disasters around Batching Plant Tebing Tinggi
  15. Assistance for Indonesian Blind Association
  16. Planting trees on degraded lands

In formulating the Social Responsibility programs, WSBP has conducted a comprehensive review of the economic, environmental and social impacts arising from WSBP’s business activities, hence the goal to provide added value to stakeholders can be achieved. The due diligence methods and scope of corporate responsibility activities include:

  1. Employee satisfaction and engagement survey
  2. Filling out the due diligence form
  3. Filling out the plans and realization of work programs at Waskita Risk Management
  4. Customer satisfaction surveys, call center services, email, and customer complaint handling
  5. Environmental Management Efforts and Environmental Monitoring Efforts (UKL-UPL)
Changes in Board of Directors Composition

Throughout 2022, there were changes to the composition and structure of Board of Directors in accordance with the Resolutions of Annual General Meeting of Shareholders held on June 27, 2022. The AGMS decided to honorably dismiss Subkhan and Heri Supriyadi from their positions as Director of WSBP as of the closing of the AGMS, with a gratitude for the contribution of energy and thoughts given while serving as a member of WSBP Board of Directors.

The AGMS then decided to appoint Asep Kurnia and Bambang Dwi Wijayanto as Director of WSBP since they were determined at the Company’s GMS, with the term of office taking into account the provisions in the Company’s Articles of Association and applicable laws and regulations, without prejudice to the right of GMS to dismiss them at any time.

Changes to the composition and structure of WSBP’s Board of Directors were made to adjust the strategic direction of WSBP and to consider the application of best governance, especially with regard to the policy of diversity in the composition of Board of Directors members. The joining of new members of Board of Directors is expected to further improve the performance of WSBP management by Board of Directors.

Until the end of 2022, there are 5 (five) Board of Directors members, consisting of 1 (one) President Director and 4 (four) Directors. The following is a chronology of changes in the composition and structure of Board of Directors throughout 2022:

Chronology of Changes in the Composition and Structure of Board of Directors in 2022

Period of January 1, 2022 - June 27, 2022 Period of June 27, 2022 - December 31, 2022 Remarks Reason for Changes
FX Purbayu Ratsunu
(President Director)
FX Purbayu Ratsunu
(President Director)
- -
Asep Mudzakir (Director of Finance & Risk Management) Asep Mudzakir (Director of Finance & Risk Management) - -
Subkhan (Director of Human Capital & QHSES) - Honorably dismissed by the GMS held on June 27, 2022 The dismissal was carried out to adjust the direction of WSBP strategy and to consider the application of best governance, especially with regard to the policy on composition diversity of Board of Directors members. The joining of new members of Board of Directors is expected to further improve the performance of WSBP management by Board of Directors.
- Asep Kurnia (Director of Human Capital Management) Appointed as Director of WSBP through the AGMS held on June 27, 2022. The appointment of Bambang Asep Kurnia was carried out to adjust the direction of WSBP strategy and to consider the application of best governance, especially with regard to the policy on composition diversity of Board of Directors members. The joining of new members of Board of Directors is expected to further improve the performance of WSBP management by Board of Directors.
(Director of Business & Development)
(Director of Operations)
- -
Heri Supriyadi (Director of Production) - Diberhentikan dengan hormat oleh RUPST yang diselenggaran pada 27 Juni 2022 The dismissal was carried out to adjust the direction of WSBP strategy and to consider the application of best governance, especially with regard to the policy on composition diversity of Board of Directors members. The joining of new members of Board of Directors is expected to further improve the performance of WSBP management by Board of Directors.
- Bambang Dwi Wijayanto (Director of Engineering & Development) Diangkat sebagai Director WSBP melalui RUPST yang diselenggarakan pada 27 Juni 2022. The appointment of Bambang Dwi WIjayanto was carried out to adjust the direction of WSBP strategy and to consider the application of best governance, especially with regard to the policy on composition diversity of Board of Directors members. The joining of new members of Board of Directors is expected to further improve the performance of WSBP management by Board of Directors.

Board of Directors Composition as of December 31, 2022

Name Position Basis of Appointment Term and Period of Office
FX Purbayu Ratsunu President Director The resolution of Extraordinary General Meeting of Shareholders (EGMS) on December 17, 2021 and has been notarized through Notarial Deed of Aulia Taufani, S.H., No. 28 dated December 17, 2021. December 17, 2021 - 2026 AGMS, First Period
Asep Mudzakir Director of Finance & Risk Management The resolution of Extraordinary General Meeting of Shareholders (EGMS) on December 17, 2021 and has been notarized through Notarial Deed of Aulia Taufani, S.H., No. 28 dated December 17, 2021. December 17, 2021 - 2026 AGMS, First Period
Asep Kurnia Director of Human Capital Management Appointed as Director of WSBP through the AGMS held on June 27, 2022 and has been notarized through Notarial Deed of Titik Krisna Murti Wikaningsih Hastuti, S.H., M.Kn. No. 08 dated July 12, 2022 June 27, 2022 - 2027 AGMS, First Period
Sugiharto Director of Operations The resolution of Extraordinary General Meeting of Shareholders (EGMS) on December 17, 2021 and has been notarized through Notarial Deed of Aulia Taufani, S.H., No. 28 dated December 17, 2021. December 17, 2021 - 2026 AGMS, First Period
Bambang Dwi Wijayanto Director of Engineering & Development Appointed as Director of WSBP through the AGMS held on June 27, 2022 and has been notarized through Notarial Deed of Titik Krisna Murti Wikaningsih Hastuti, S.H., M.Kn. No. 08 dated July 12, 2022 June 27, 2022 - 2027 AGMS, First Period
Closing Remarks and Appreciation

Concluding this 2022 Board of Directors report, we would like to express our highest appreciation for the cooperation of all stakeholders, which has enabled WSBP to continue to grow and be highly competitive in the national construction industry, and to be able to respond to the challenges that occur as well as possible. Board of Directors also thanks and congratulates Board of Commissioners, Stakeholders and all levels of officials and employees for their success in achieving the set targets. We will passionately continue to increase our commitment so that WSBP can be managed in a better, efficient, effective and modern manner by always prioritizing the application of Good Corporate Governance principles.

Jakarta April 28, 2023

PT Waskita Beton Precast Tbk

FX Purbayu Ratsunu
President Director