PT Waskita Beton Precast (WSBP) is a publicly traded Indonesian state-owned enterprise (SOE) founded in 2014 and a subsidiary of PT Waskita Karya (Persero). It is the country’s largest producer of precast and mixed concrete. The company intends to invest IDR 80 billion (US$ 5.2 million) in capital expenditure (Capex) to develop Indonesia’s New Capital, Nusantara, in East Kalimantan.
WSBP has one of the largest production capacities in Indonesia with 9 plants, 31 batching plants, and 1 quarry. The company currently has a production capacity of 3.7 million tons per year, and are located in Sumatera, Java, and Sulawesi. It has completed several major projects over the years, including:
- Benoa Bali Toll Road;
- Gempol-Pasuruan Toll Road;
- Terminal 3 Soekarno-Hatta Airport;
- Adam Malik Special Busway Line; and many more.
Significant emphasis on the government and SOE projects
The majority of the company’s IDR 80 billion in Capex will be spent on projects in Nusantara. The remaining Capex will go toward building maintenance and the completion of the Waskita Beton project’s land acquisition. “In essence, we are picky about how we spend the Capex. It will only be used to help the company’s productivity,” stated Asep Mudzakir, WSBP Director of Finance and Risk Management, at the 2023 WSBP Incidental Public Expose Press Conference.
WSBP’s new project in the Nusantara Capital City includes supplying concrete ready-mix with a capacity of 90 m3/hour for the Presidential Palace and working roads construction projects. In collaboration with its parent company, Waskita Karya, WSBP also constructs earthquake-resistant buildings.
“We are focused on entering the government and state-owned market share in order to achieve the targets we expect,” Mudzakir said of the company’s government and SOE projects. He also stated that the company is focusing on projects with advance payment schemes in order to maintain the company’s liquidity balance.
“Our project value target in 2024 is up to IDR 250 billion,” he explained. This year, the company expects revenue to increase by IDR 2.3 trillion, with a gross profit of IDR 300 billion.
Betting to build Nusantara
The Nusantara Capital City area is located deep within the forest, with few connecting roads. Balikpapan (71-80 kilometers) and Samarinda are the closest cities (98 kilometers).
According to Anton Sitorus, a property observer, Nusantara is still difficult to access and lacks the necessary infrastructure to build a new city. “Nusantara is in the middle of nowhere, far from anywhere,” Sitorus told the Indonesia Business Post on March 18, 2023. He claimed that the new capital city’s construction will require a significant investment in logistics and transportation.