CEO Message

To the Honorable Shareholders,

The Covid-19 pandemic will continue until 2021 and there is no certainty when this pandemic will end soon. In 2021, the government will enforce large-scale social restrictions (PSBB) to the implementation of emergency Community Activity Restrictions (PPKM) to control the spread of Covid-19, where the virus continues to mutate from one type to another so that the economic recovery of both Indonesia and the world is experiencing a slowdown again.

Macroeconomic Analysis

Efforts to control the Covid-19 pandemic carried out by the Government together with all stakeholders, including all levels of Indonesian society, have succeeded in boosting national economic growth by 3.69% in 2021, higher than the achievement in 2020 which experienced a growth contraction of 2.07%. In terms of production, the highest growth occurred in the Health Services and Social Activities Business Field of 10.46%. Meanwhile, in terms of expenditure, the highest growth was achieved by the Export Component of Goods and Services at 24.04%.

With this growth rate, Indonesia’s GDP per capita increased to IDR 62.2 million, higher than the prepandemic GDP per capita of IDR 59.3 million in 2019. This achievement has brought Indonesia back into the upper middle-income country classification.

When viewed from the production side, the five main contributory sectors, namely the manufacturing industry, agriculture, trade, construction, and mining, resumed positive growth and were able to support the Indonesian economy.

Company Performance in 2021

Throughout 2021, the company experienced many obstacles due to the Large-Scale Social Restrictions (PSBB) to the imposition of emergency Community Activity Restrictions (PPKM) to control the spread of Covid-19.

Various efforts, strategies and policies have been determined and reviewed at every monthly meeting of the board of directors, including: energy efficiency, optimizing product types, improving product quality, regulating the purchase of raw materials as well as tight cash flow arrangements, finally being able to bring the company to record comprehensive income for the year of USD 3.98 million, or an increase of 109.86% compared to 2020 which experienced a comprehensive loss for the year of USD 40.37 million.

The company’s total sales value increased by 24.54% from sales of USD 152.7 million in 2020 to USD 190.2 million in 2021. This was due to a significant increase in product prices in 2021. The company’s total sales value increased by 23.50 % when compared to the target set by the company in 2021 of USD 154.06 million.

In terms of sales quantity, the company’s local sales decreased by 0.59% from sales of 176.26 thousand tons in 2020 to 175.22 thousand tons in 2021, this is because the PSBB and PPKM have caused the polyester division to customer factories. reduced its production capacity so that sales of the polyester division decreased, while local sales of the chemical division continued to increase. The company’s export sales decreased by 78.40% from sales of 40.53 thousand tons in 2020 to 8.76 thousand tons in 2021, as for the causes and obstacles because MEG’s selling price was below the cost of goods sold and also due to an increase in shipping costs. very significant. The company’s overall sales quantity was 183.98 tons, an increase of 2.24% when compared to the company’s target in 2021, which was targeted at 179.95 tons.

Business prospect

The plan to replace the catalyst for the Merak plant in 2021 as an effort to cost and operational efficiency had to be postponed because there was 1 production line that stopped operating throughout 2021. One MEG production line had to be discontinued because the MEG price increase was still far below the increase in the price of ethylene raw materials. so that the selling price of MEG is below the cost of goods sold.

The commodity super cycle will continue throughout 2021, where the prices of commodities, crude oil and their derivatives are still experiencing a significant increase so that the company is optimistic and continues to strive to improve its opera_onal performance in line with the demands of market demand both domestically and internationally and the company continuously improves the quality of its products. produced in order to compete in the market and meet customer needs in a sustainable manner.

The company will still continue its plan to make EO purification to support EO production performance as well as the construction of an EOD factory which will add a capacity of 60,000 tons at the Merak factory which will be carried out in the coming years if the world and Indonesia are free from covid 19 and the economic conditions have improved. improving again globally.

Implementation of Corporate Governance

The Directors implements GCG implementation by monitoring good corporate governance.

The Company continues to improve and implement good corporate governance (GCG) in the corporate environment, and ensures that the basic principles of GCG are applied to every aspect of the business and at all levels by ensuring good corporate governance based on the principles of transparency, accountability (accountability), responsibility (responsibility), integrity (integrity) and fairness (fairness). One form of the implementation of the principles of Good Corporate Governance that is applied is by trying to involve the shareholders of the community at the General Meeting of Shareholders. In addition, to increase transparency and accountability, the Company uses a Public Accounting Firm (KAP) which is included in the ranks of the leading KAP so that the transparency and accountability of reports is better.

Appreciation

In closing, we would like to express our sincere gratitude to all stakeholders from employees, customers, suppliers, business partners, creditors and shareholders for their consistent support so far. We believe that Covid-19 will no longer be a pandemic in the years to come, and together with all stakeholders, we are optimistic that the company will continue to grow and develop and be able to improve satisfactory performance in the future.

Thank you