Electronics and technology company PT Galva Technologies Tbk (GLVA) has allocated IDR 80 billion (US$ 5.34 million) Capital expenditure (Capex) in 2023 to achieve the targeted growth rate of 20%-30%.
Established in 1991, Galva Technologies is a company that supplies high-quality computers, printers, displays and audio-video equipment to corporate clients. Several of its brands include Sony, Etere, Libec, Fujinon, TOA, Yamaha, Aiphone, Acer, Lenovo, BenQ, Philips dan MSI.
Capex to facilitate revenue growth
The Capex will be allocated to increase recurring income in an effort to achieve the projected revenue growth for 2023. The company will focus on expanding its business in three main areas: IT distribution, business solutions and document solutions.
According to Maria Fransiska, Director of Galva Technologies, the 2023 Capex in 2023 is higher than in 2022 by about IDR 25 billion.Â
The company is optimistic that its 2022 revenue would increase by 30% than in 2021. The increase will double Galva’s annual net profit in 2022.
“The Capex will be used to increase the recurring income in an effort to achieve the projected revenue growth target for 2023,” Fransiska told Kontan.co.id on January 27, 2023.
Galva will also be promoting the optimization of all products and services through business distribution, project-based, managed services and e-commerce.Â
Fransiska was optimistic with the forecast performance in 2023, saying that the growing revenue was due to additional business activities in 2022 that have impacted Galva’s performance. “This is due to the opening of new opportunities in developing the business segment in the government market, state-owned and the health services segment,” she said.
The company’s growth is also supported by the increasing trend in the information and communications technology (ICT) industry, which is promising in both private and government sectors.
Meanwhile, the compound annual growth rate (CAGR) of the ICT sector is expected to grow by 7.5% from 2020 to 2025, reaching US$ 128 billion or equivalent to 9% of Indonesia’s GDP.Â
Internally, the company’s revenue growth in 2023 is driven by a wider variety of products and brands, as well as more comprehensive digital solutions.
Fransiska also mentioned that Galva has been planning to expand both organically and inorganically in the next 3 years to strengthen its business pillars and competitiveness in the ICT and technology solutions industry.
Risk in ICT industry
As the ICT industry may grow by 7.5% in five years, the growth faces some risks including:
- Technological advancements: Rapid advancements in technology can make products and services obsolete quickly, leading to increased costs and reduced demand for existing products and services.
- Cybersecurity: With increasing reliance on technology and the growth of digital transactions, the threat of cyber attacks is a significant risk in the ICT industry.
- Market volatility: The ICT industry is sensitive to economic and market conditions, which can result in fluctuations in demand for products and services.
- Supply chain disruptions: The electronics industry relies on a complex and global supply chain, which can be impacted by events such as natural disasters, trade disputes, and political instability.
- Access to raw materials: The electronics industry relies on a range of raw materials, including rare earth metals and minerals, which may become increasingly scarce and subject to price volatility.
- Environmental regulations: Companies in the electronics industry are subject to a range of environmental regulations, including those related to the disposal of electronic waste and the use of hazardous materials in production.
