PT Wijaya Karya Beton Tbk (WTON), a subsidiary of state-owned construction company PT Wijaya Karya Tbk (WIKA), has eyed IDR 8.6 trillion (US$ 570.4 million) contracts to support the government’s massive infrastructure projects.
Established in 1997, Wijaya Karya Beton (WIKA Beton), specializes in precast concrete industry. The company started to focus on the precast concrete industry by developing precast concrete panel for low-rise housing projects. Since 2020, it has had 14 concrete factories, 1 moveable concrete factory and 5 quarries.
Targeting IDR 8.6 trillion contracts
In 2023, WIKA Beton has aimed to secure contracts worth IDR 8.6 trillion, compared to the 2022’s target of IDR 7.6 trillion or 13.1% higher.
“Until December 2022, WIKA Beton recorded new contracts of IDR 7.01 trillion,” Corporate Secretary Dedi Indra told bisnis.com on February 5, 2023. He said the company would focus on constructing toll roads, bridges, ports and office towers to achieve its 2023 target.
Indra’s optimism is fueled by the increasing government’s budget for infrastructure, which rose by 7.75% to IDR 392 trillion. This increased budget will support various construction projects such as water resources, roads, bridges and residential areas, which are expected to impact the economy positively.
Several projects with large contract values include:
- East Ancol Toll Road project with new contracts of IDR 897 billion. WIKA Beton supplies Box Girder, which production began in August 2022, and is slated for completion in September 2024.
- Manyar Smelter project in Gresik, East Java, with a contract value of up to IDR 267 billion. The company provided piles and piling services for this project, which kicked off on November 2021 and construction has reached 87% as of September 2022.
- Semarang-Demak Toll Road with a contract value of IDR 359 billion.
- Power Distribution Network project with a contract value of IDR 350 billion.
Despite only securing contracts worth IDR 7.01 trillion in 2022, Indra remained confident that the company would achieve its IDR 8.6 trillion goal in 2023.
Risks in the concrete industry
There are several challenges in the concrete industry:
- Access to raw materials: The shortage of raw materials, such as cement, sand and gravel, will result in higher costs and longer lead times for projects. The shortages will impact the construction and concrete industries in the country.
- Labor shortage: Shortage of skilled labor can limit the capacity of companies to take on new projects and increase the cost of labor. This can lead to longer lead times for projects and reduced profit margins for companies in the construction and engineering sectors.
