Profile of PT. United Tractor Tbk.
PT. United Tractor (UT) was established in 1972 with the name of PT. Inter Astra Motor Works. UT operates in the trade of heavy equipment as a sole distributor for Komatsu heavy equipment from Japan. UT is a subsidiary of the Astra Group, which has other subsidiaries operating in automotive industry, agribusiness, finance, etc.
In 1989, UT launched Initial Public Offering (IPO) selling part of its shares to the public. In 2009, its capital was Rp 831,720,000,000 with shareholders including PT. Astra International Tbk owning 59.50% and investing public holding the rest.
UT has three business units operating in construction machine, mining and mining contract business. Each of the business units has significant contribution to the income of UT every year. The mining contractors have the largest contribution of 52.7%, followed by construction machine business with a contribution of 37.6% and coal mining business 9.7%. Currently UT focuses more on its coal mining business, which is expected to become its major earner in addition to heavy equipment sector.
Currently UT has 19 subsidiaries operating in three different business areas. Those in construction machine business include PT. United Tractor Pandu Engineering, UT Heavy Industries Pte. Ltd, PT. Komatsu Remanufacturing Asia. PT. Bina Pertiwi and PT. Multi Prima Universal. Those operating as mining contractors include PT. Pamapersada Nusantara, PT. Kalimantan Prima Persada and PT. Pama Indo Mining. The rest operate in mining industry including PT. Dasa Eka Jasatama, PT. Tuah Turangga Agung, DEJ Mines, PT. Nusantara Citra Jaya Abadi, PT. Kadya Caraka Mulya and PT. Ekasatya Yanatama.
Business in construction machines
UT distributes products of heavy equipment including Komatsu and Nissan Diesel from Japan, Scania, Bomag and Valmet from the United States and Tadano another brand from Japan. The heavy equipment products include off/road heavy trucks with gross vehicle weight of 24 tons or more of Nissan, forklift trucks under license of Komatsu Forklift, farm tractor under license of John Deer, Vibratory Roller under license of Bomag, Stonse Cruser with a capacity of up to 100 tons per hour under license of Norberg, Tadaro Crane, Asphalt Mixing Plant under license of Niigata and various other heavy equipment of its own production such as Logging Clamps and components.
UT also provides after sales service for heavy equipment, produce components, offer service for recondition of heavy equipment and leases out and sells second hand heavy equipment and sells farm tractors.
In 2009, sales of Komatsu heavy equipment shrank 28% to 3,111 units compared to 4,345 units in the previous year. The fall in sales was caused by global economic slowdown.
In 2010, UT sets sales target for Komatsu heavy equipment at 4,500 units, or an increase of 44.64% from 3,111 units in 2009. In the first four months of 2010, sales of heavy equipment rose 101.3% to 1,685 units from 837 units in the same period in 2009. The heavy equipment sold in the first four months of 2010 included 975 units to the mining sector, 371 units to the plantation sector, 190 units to the construction sector, and 149 units to the forestry sector. Its consolidated income this year is predicted to grow 10%-15% from Rp 29.24 trillion in 2009 Currently Komatsu has a 47% share of the heavy equipment market in Indonesia.
UT also sells generic spare parts that could be used for all products of heavy equipment. The products of components include filter, hose, lubrication system, hydraulic breaker, etc.
Currently, UT has 44 branches in various cities in Indonesia.
PT United Tractors Pandu Engineering (UTPE) was established in 1983 to produce equipment with own license and engineering design. In the beginning it's produced only forklift under license of Komatsu Forklift, Farm Tractors under license of John Deer and Vibratory Roller under license of Bomag. Later it produced various other types of heavy equipment with own license and engineering design.
All set of equipment for Nissan heavy duty trucks such as dumpers. Cab bolster, logging trailers, logging clamps, which constitute working equipment in timber industry are designed by the company itself. A number of types of equipment manufactured by the company include fork lifts, stone crushers, farm tractors, logging trailers, log clamps, dumpers, mixing plants, gen. sets, etc. All of the products enter the market with the brand of Patria.
The company started exporting forklift components in the form of frames to the United States in 1988 and then to Japan. Currently its exports average 300-400 frames a month. In 2009, UTPE launched new products including Coal Light Vessel HD 785, Pit Stop Mobile for HD 465, Lube Container and 18,000 watts Mega Tower Light. The buyers of the products of UTPE include General Electric of the United States and France's Alstom.
PT. Pandu Dayatama Patria produces engine under license of Komatsu, Nissan Diesel and Perkins, to support the program of the government to produce engines in Indonesia.
Remanufacturing and recondition
PT. Komatsu Remanufacturing Asia (KRA) in Balikpapan, East Kalimantan offers overhaul service for large types of Komatsu heavy equipment. Currently KRA has a production capacity of 600 units of machines and 2,300 units of components.
KRA has immediate plan to expand its production capacity to 1,200 units of machines and 3,000 units of components.
UT Reman provides overhaul service especially for medium and small types of Komatsu heavy equipment. In 2009, the production of UT Reman included 341 units of machines and 1,706 units of components. UT Reman has three workshops in Jakarta, Pekanbaru and Balikpapan. Recently UT Reman launched a new product--rebuild cylinders with a capacity of 70 units per month from its Balikpapan workshop, electric component with a capacity of 20 units per month from its Sangatta workshop and facilities of turbo balancer and starting motor test bench from its Jakarta workshop.
Leasing and sales of second hand heavy equipment
PT. Multi Prima Universal (MPU) was established in 2008 leasing out and selling second hand heavy equipment. In the beginning, MPU leased out and sold heavy equipment only to companies operating in the construction sector. Later it leased out and sold heavy equipment also to companies operating in other sectors mainly in mining sector. MPU provides guarantee in line with the standards of Komatsu supported with equipment, system and technology. Mining Contractors
PT Pamapersada Nusantara (Pama) was established in 1989 to operate as a mining contractor. Pama built coal and gold mine facilities, dams, roads and handles transport projects.
Currently Pama is the largest coal mining contractor in the country with a 42% share of coal mining contracting market. Among its clients are large coal producers including PT. Adaro Indonesia, PT. Indominco Mandiri, PT. Kideco Jaya Agung and PT. Kaltim Prima Coal.
In 2009, Pama expanded its business and capacity with an additional investment of US$ 282 million or around Rp 2.82 trillion for the purchases of heavy equipment to support its operation. Part of the fund was also used to finance the acquisition of a new coal mining company having a coal reserve of 40 million tons. In 2009, the company had 2,079 units of heavy equipment consisting of 186 units of bulldozer, 241 units of excavator/shovel, 1,471 units of dump truck, 127 units of prime mover and 54 units of wheel loader.
Earlier, Pama acquired PT. Tuah Turangga Agung (TTA), a coal miner at Kapuas, Central Kalimantan with a coal reserve of 40 million tons. TTA was acquired at a price of US$ 165 million. The TTA mine started production in October 2009 with a production capacity of 50,000 tons by the end of 2009. It is expected the capacity could be increased to 1 million tons later
Early 2010, Pama secured a loan of US$ 135 million from three foreign banks Sumitomo Mitsui Banking Corporation Singapore, Mizuho Corporate Bank Ltd and Citibank.
Pama is set to turn out 77 million tons of coal for its clients in 2010 with income at Rp 19 trillion--Rp 20 trillion--up from an estimated production of 66 million tons with estimated income of Rp17 trillion in 2009.
Its assets are valued at US$ 1.1 billion with 1,794 units of heavy equipment. Pama also sets coal transporting target at 75 million tons in 2010 or a 15% increase from 68 million tons in 2009. The target is set based on an increase in its contracts with coal producers its overburden removal contracts also increase 8%
The removal of overburden by the company is predicted to increase 35% in 2009 to 597.9 million bcm from 441.9 million bcm in 2008.
The largest coal production by Pama is for PT. Adaro Energy Tbk totaling 20 million tons a year, followed by coal production for PT. Kideco Jaya Agung totaling 9 million tons and for other coal producers PT. Tambang Batubara Bukit Asam Tbk, PT Kaltim Prima Coal (KPC), and PT Indominco. In 2009 Kideco extended its coal mining contract with PAMA for another 10 years.
Pama also sets coal production target at 3.5 million tons from its own mines in South Kalimantan. It will export its coal to buyers in Hong Kong, and Japan.
In 2010, Pama sets aside US$ 350 million for capital expenditure. Around 80% or US$280 million of the fund will be used to buy more heavy equipment. Around 30% of the funds are from its own internal cash and the rest are in standby loans remaining provided by international and local banks two years ago.
Pama plans to build a coal port in South Kalimantan with a capacity to facilitate the transport of up to 1 million tons of coal.
In 2007, UT acquired PT. Dasa Eka Jasatama (DEJ), a coal miner in South Kalimantan. DEJ has two coal mines in Kalimantan in Rantau, South Kalimantan and Kapuas, Central Kalimantan. The two mines are estimated to have a total reserve of 16 million tons of coal with a calorific value of 6.700 kcal/kg. DEJ has so far produced only 7 million tons from the two mines.
In 2009, DEJ sold 2.4 million tons of coal valued at Rp 2.8 trillion, down 35% from 3.7 million tons valued at Rp 3.9 trillion in the previous year.
In 2008, PT. Pama acquired PT. Tuah Turangga Agung (TTA), a coal miner in Kapuas at a price of USS165 million.
TTA has a coal concession of 4,897 hectares with a reserve of 40 million tons. The coal has a calorific value of 6,300 kcal/kg, suitable for power plant fuel.
In 2009, constructions of TTA's mining facilities were completed and were ready for operation including crusher plant, hauling road, stock pile and jetty. TTA started production in April 2010 with a production capacity of around 700,000-1 million tons per year. Its maximum capacity is around 3 million tons per year expected to be reached in 2012.
TTA's coal has high calories, therefore, its production is all for exports. UT cooperates with Japanese Trading Firm to handle the exports of TTA's coal production to Japan.
In July 2010, TTA acquired 60% of PT Agung Bara Prima (ABP) at a price of US$ 15.9 million. Explorations are still underway for coal reserve of ABP in Kapuas, Central Kalimantan over a concession of 1,365 hectares. The reserve is estimated at 40 million tons with a calorific value of 6,300 Kcal/kg. It is estimated that ABP will start production in 2012.
Through TTA, UT is in the process of acquiring PT Asmin Bara Bronang and PT Asmin Bara Jaan, both coal miners at a price of US$ 50 million. The process is expected to be wrapped up in the last quarter of this year. The two mining companies in Central Kalimantan have potential reserves of 20 million--50 million tons of coal with a calorific value of 6,300 Kcal. The two mines, entirely untapped are expected to produce 2 million tons of coal a year.
Currently, coal production of Pama is around 2.5 million-3 million tons. In 2010, Pama is expected to have additional production of around 700,000 tons from TTA and around 2 million tons from two holders of mining authority (KP) it has acquired bringing its total production to 5 million-5.5 million tons. With the acquisitions, UT sets production target at 10 million tons a year.
PT Patria Maritime Lines (PML), which was established in 2008, operates in river transport business with a carrying potential of 7 million tons of coal a year.
PML started operation with 8 units of tug boats and barges. It hopes to strengthen its fleet to 16 units in 2010 and to 19 units in 2011. In addition, PML focuses its transport service for coal from concessions belonging to affiliate under UT including PT Kalimantan Prima Persada and PT Prima Multi Mineral (a subsidiary of PT Pamapersada Nusantara (PAMA)) in South Kalimantan and PT Tuah Turangga Agung in Central Kalimantan.
In July, 2009, its vessels the Patria 1 and Auriga set out for their maiden voyage from Swiss-Belhotel Borneo terminal in Banjarmasin, South Kalimantan.
Coal producers maintain their coal production levels this year with good prices in 2009. Pama recorded healthy financial performance in 2009. Last year, UT distributed 3,011 units of heavy equipment, and recorded coal production at 2.4 million tons. Coal production it produced for its clients totaled 68 million tons.
UT reported net income of Rp 29.24 trillion in 2009, up 5% from Rp 27.9 trillion in 2008. The income included 37.6% from business in construction machines, 52.7% from mining contracting business, and 9.7% from mining business.
Increase in UT's income was attributable to 33% rise in income from mining contracting service to Rp 15.4 trillion.
Its income from construction machine business dropped 11% resulting in a decline the contribution of the business sector to Rp 10.9 trillion from Rp 12.4 trillion in the previous year. The decline followed weak demand for Komatsu heavy equipment Komatsu, the sales of which shrank 28% from 4,345 units in 2008 to 3,111 units in 2009. However, sales of spare parts and earning from maintenance service rose 23% in value in 2009.
Income from coal mining business unit fell 27% from Rp 3.9 trillion in 2008 to Rp 2.8 trillion in 2009 as a result of weak demand in coal market.
UT posted Rp 3.82 trillion in net profit in 2009, up 43% from Rp 2.66 trillion in the previous year.
Meanwhile, in 2010, the mining business of UT is predicted to grow 10%, heavy equipment sales are forecast to rise 15% and its coal production is estimated to reach 3.5 million tons. Its income is forecast to increase 15% compared with in 2009.
In the first half of 2010, UT reported a 30.26% rise in consolidated profit to Rp 18.08 trillion from Rp 13.88 trillion in the same period last year.
Business in construction machines accounted for the largest contribution of Rp 8.23 trillion to the consolidated income. Business in coal mining contracting business contributed Rp 8.19 trillion and coal mining business contributed Rp 1.43 trillion.
UT's operating profit rose slightly 2.71% from Rp 2.58 trillion in the first half of last year to Rp 2.65 trillion in the same period this year. Its net profit rose 1.07% from Rp 1.87 trillion to Rp 1.89 trillion or Rp 567 per share.
Table - 1 Summary of financial report of PT. United Tractor Tbk and subsidiaries, 2008 and 2009 (Rp million) Description 2009 2008 Assets Current assets 11,969,001 12,883,590 Non current assets 600,101 458,883 Fixed assets 11,835,726 9,505,248 Other assets -- -- Total assets 24,404,828 22,847,721 Liabilities and equity Current liabilities 7,225,966 7,874,135 Non current liabilities 3,227,782 3,770,781 Other liabilities -- -- Total liabilities 10,453,748 11,644,916 Equity 13,843,710 11,131,607 Minority interest 107,370 71,198 Total liabilities and equity 24,404,828 22,847,721 Profit/Loss Income 29,241,883 27,903,196 Net profit 3,817,541 2,660,742 Source: PT. United Tractors Tbk
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||COMPANY PROFILE|
|Publication:||Indonesian Commercial Newsletter|
|Article Type:||Company overview|
|Date:||Jun 1, 2010|
|Previous Article:||Heavy equipment industry in Indonesia.|
|Next Article:||Role of heavy equipment sole agents.|