Gunung Raja Paksi (GRP) approaches record-year with US$723m revenue and US$49m profit in Q3 2022
- Written by Media Outreach
The Indonesian steelmaker has seen export revenue at US$45 million this year, which is 56% YoY increase. This is a testament to GRP's efforts in expanding its footprint in the international stage, where it has made its mark in key regional markets this year such as the United States (US), Australia, New Zealand and United Emirates Arab (UAE).
This positive performance can be attributed to the company's investments into modern technologies to increase steel production capacities and cementing its credibility as a sustainable steel manufacturer. Following this, the company has robust plans for 2023 where it aims to channel more investments into its steel production capabilities and green technologies to meet the region's growing demand for steel and in particular, low carbon steel.
"2022 has been a year of growth and achievements. As we enter the new year, we hope to continue this momentum by setting our sights beyond Indonesia. We are optimistic that we can do so as seen from how our production volume has increased by 36% since 2021, which we believe can address the demand and supply gap of steel in the region," said Roymond Wong, Director of Finance at Gunung Raja Paksi.
Concluding 2022 with sustainability initiatives
In the second year of its new leadership, having transformed from family run to professionally managed, GRP implemented major initiatives in the sustainability space. The most prominent being its Environmental, Social and Governance (ESG) Strategy Handbook and the establishment of its new sustainability department to drive it. GRP has also formed key partnerships with renowned industry players such as Fortescue Future Industries (FFI), Indonesian Chamber of Commerce (KADIN) and TotalEnergies to explore solutions for decarbonisation and facilitate discussions on helping the industry within the region, move towards a more environmentally friendly future.
On the production side, GRP has also been investing in transforming their energy use in their bid towards achieving Net Zero. This can be seen from how GRP has transitioned from traditional blast furnaces and is now operating on Electric Arc Furnace (EAF), which have proven to be less pollutive. It has also commissioned its Light Section Mill (LSM) as part of its efforts to increase efficiencies and lower energy consumption.
"As we journey toward an environmentally conscious world, it is important for businesses to factor sustainability into their business models to become responsible producers. At GRP, we have been investing time and resources into decarbonising our processes and are now proud to call ourselves suppliers of low carbon steel. We hope to see our steel making its way into more green building projects in the region in 2023 and pave the way for other steelmakers to follow suit in their own decarbonisation journeys," said Tony Taniwan, Executive Committee at Gunung Raja Paksi.
Having participated in the recent Indonesian Iron and Steel Industry Association (IISIA) Business Forum (IBF) which revealed the national agenda to improve Indonesia's infrastructure and modernise local resources and the development of the new State Capital (IKN) which prioritises green building, GRP aims to supply its low carbon steel products to spearhead infrastructure development for the country and the region.
Meeting the country and the region's growing steel demands
GRP foresees that the country and region's appetite for steel will continue to rise. According to the World Steel Association, global steel consumption is on course to recover by 1% to 1.81 billion tons despite current economic headwinds in 2023. In Indonesia alone, steel consumption in 2023 is expected to register a growth of 3.5% YoY and Indonesian Finished Steel Demand is expected to reach 20.1 mt. This is driven by construction projects, which contributes to 78% of steel consumption. For instance, the new state capital in Kalimantan (IKN) requires 9.2 million tons of which GRP is confident that they would be able to supply. This is evident from how GRP's sales volume has increased by 23% from 2021 this year, which highlights the increasing demand for the company's steel products.
GRP understands that not only the demand for steel is increasing but also steel manufactured from sustainable means to support the building of green cities and infrastructure. As such, GRP has been making efforts to decarbonise production processes and have obtained an environmental product declaration (EPD) certificate. With this credential, GRP has seen successes in breaking into regional markets such as Australia and New Zealand and the United States, and it hopes to broaden its reach to more environmentally conscious markets.
Following GRP's participation at the IBF, the company is aligned on the Indonesia government's plans to increase the use of domestic products (P3DN) and the level of domestic components (TKDN). As such, GRP is currently in discussions with the government on formulating policies to protect local steel suppliers in areas such as anti-dumping.
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