Profile of the Rajawali Nusantara Indonesia (RNI) group.
PT. Rajawali Nusantara Indonesia (RNI) is a state company in agribusiness. It an investment holding for subsidiaries operating in agro industry, trade and medical and pharmaceutical sectors. After 45, the RNI group diversified business and expands operation to oil palm, rubber and tea plantation and property sectors. Agro industry is its core business, and through trade it expands the market for its products.
Currently RNI group is made up of a parent (holding) company and 15 subsidiaries and 2 offspring of the subsidiaries. In 2009, the RNI Group had assets valued at Rp4.9 trillion with employees of 15,928 persons.
In agribusiness sector, RNI has 10 sugar factories in West Java, Yogyakarta and East Java, oil palm plantations, tea plantations and a number of factories processing upstream products and sugar-based products. It also has animal feed factories, particle board factory, brake canvas factory, alcohol factory and mixed fertilizer processing factory . In the pharmaceutical and medical sectors it has pharmaceutical, syringe and condom factories and an X ray equipment factory. In trade and distribution sector it has branch offices in a number of large cities in Indonesia.
Sugar plantations and factories
The RNI Group under its subsidiaries--PT. PG Rajawali I, PT. PG Rajawali II, PT. PG Rajawali III and PT. PG Candi Baru--has sugar plantations in a number of areas in Java integrated with sugar factories.
PG Rajawali II through its subsidiary PT. Inti Bagas Perkasa (IBP) diversified business by utilizing all sugarcane basic material to produce derivatives a concept used in Brazil, China and Vietnam. IBP in cooperation with the Bandung Institute of Technology (ITB) has developed and produced brake canvas for buses, trucks and locomotives. The component was first produced commercially in 2006 with the brand of Gasrem.
The brake canvas is made of bagasse. Bagasse could also be used to produce a substitute for asbestos that could cause lung diseases. The use of asbestos has been banned in 1987 in the United States, the European Union and Japan. In 2007, RNI and a Cuban sugar company established investment and technology cooperation. The cooperation included in research and development of high yield sugarcane varieties which have high productivity and are more resistant to plant diseases and pests. Thailand, the Philippines, India and Vietnam have utilized the Cuban technology making them leading sugar producers at present.
In order to keep pace with annual growth of 5% in the domestic sugar consumption, RNI plans to build new sugar factories with a processing capacity of 6,000 tons of cane per day (TCD). Construction of the factory in Malang, East Java, is estimated to cost Rp1.5 trillion . It is to be operational in the first half of 2014. In the first year it is expected to produce 72,000-85,000 tons of sugar . The regency of Malang has sugarcane supply in abundance. The company has 500 hectares of sugar plantation with more than 5,000 hectares of plasma farms.
The sugar factory will use modern and highly efficient machines. It will environmentally friendly with zero waste. It will be an integrated factory producing also ethanol, compost and animal feed. It has carried out and will continue the on farm and off farm revitalization program. The program has expanded its sugar plantations form 43,548 hectares in 2005 to 52,461 hectares in 2009, and increased its sugar factory milling capacity from 23,556 TCD in 2005 to 28,031 TCD in 2009 and improved the sugar content from 6.74% to 7.72 %.
In 2009, RNI revitalized nine of its sugar factories in West and East Java . The program reached the target in the production of white sugar at 430,444 tons in 2009. The company used a loan of Rp 600 billion from BRI to finance the program.
In 2010, RNI cooperated with a number of companies form the Republic Czech such as TS Plzen, Invelt Industry International, and Cukrovary a lihovary TTD to revitalize its sugar factories. The cooperation was in the purchases of new machines or through involvement of the Czech companies in joint venture.
TS Plzen has supplied machines for sugar factories in Bone, South Sulawesi and Cot Girek, nAd in 1965. RNI will use sugar factory equipment from Invelt Industry.
The government supports its revitalization by providing 60% of the cost especially for the construction of new sugar factories. The remaining 40% is provided by the company and its Czech partners.
In 2008, RNI built a bio-ethanol factory with a capacity of 100 kiloliters per day . The factory started operation in December 2008. Bio-ethanol is a sugarcane based bio-fuel. Molasses, the basic material for bio-ethanol, is a by product of sugar factories.
RNI cooperated with PT Choi Biofuel Indonesia, an Indonesian-South Korea joint venture, PT PSA Aotu-matika, an Indonesian Russian joint venture and PT Indo Acidatama, to build the bio-ethanol factory. Construction of the factory was estimated to cost US$ 58 million all provided by the partners with RNI providing land and the feedstock molasses.
Expansion of bio-ethanol industry will be made in the sugar factories of (PG) Janti Tujuh, Cirebon, West Java, PG Kebon Agung, Grati, East Java, PG. Candibaru and PG Rejo Agung.
The project in PG Jati Tujuh will be handled by PT Indo Acidatama and PT PSA Automatica, respectively to invest US$ 20 million and US$ 18 million. PT PSA Automatica developed a 20-megawatt power plant using bagasse as fuel fuelled. The project was completed in June 2008.
Development of bioethanol project in PG Kebon Agung, was carried out in cooperation with investor PT Choi Biofuel Indonesia. It has a production capacity of 100 kiloliters per day . Construction of the project, which cost US$ 20 million was completed in April 2009.
RNI has established market foothold in South Korea and it cooperates with a number of countries in Europe such as Germany and France in the use of bioethanol fuel.
In addition to bio-ethanol, RNI has increased its production of jetropha curcas oil to 204,485 liters per year after expanding its plantation of the plant by 24,293 hectares in 2007 from only 2,915 hectares in 2006 with production of 1,767 liters of oil.
Animal feed industry
RNI has animal feed factories in Jatitujuh and Malang, East Java using sugarcane shoots as the feedstock. It is a new invention as previously the main basic material for animal feed is corn.
Particle board industry
RNI operates a particle board factory in Madiun, East Java. The factory utilizes sugar industry waste in he form of bagasse to produce furniture.
PT. Perkebunan Mitra Kerinci has a tea plantation in Solok, West Sumatra built in 1990 in cooperation with PTP VII (currently merged in PTPN IV). Its product is in bulk tea sold on the domestic and export markets and tea in small packages with the brand of Teh Kerinci.
Oil palm plantation
PT Perkebunan Mitra Ogan (PMO) was established in 1988 by RNI and PT Perkebunan Nusantara III. PMO operates oil palm plantations in Peninjauan in the regency of Ogan Komering Ulu (OKU) and Rambang Lubai Kabupaten Muara Enim in South Sumatra. The plantations occupy a total area of 24,000 hectares. The two plantations have palm oil processing plants PKS I has a processing capacity of 60 tons of fresh palm fruit bunches per hour and PKS II with a processing capacity of 30 tons per hour. The factories produce crude palm oil (CPO), Palm Kernel (PK). It also has rubber plantations in the two areas. It has also opened plantations in the regency of Muba in South Sumatra totaling 16,000 hectares.
PT Rajawali Tanjungsari (RT) was established in 1988 to operate in leather tanning industry. In the beginning it cooperated with the Wonocolo leather factory in Surabaya, a state company in East Java. Later RT built a factory hat could produce 10 million square feet of leather per year. The factory is located at Tanjungsari, Sidoarjo, East Java.
The factory uses cow, goat and sheep hides as the basic material to produce semi finished leather and various article of finished leather for shoes, garments and hand gloves. The basic materials are entirely supplied locally .
Its main product is finished cow leather Nappa softy (aniline and semi aniline), which has been used as basic material for shoes of world famous brands like SPM, Jette, Bellmondo and Bruno Premi. Nappa has been developed for years as superior article with German technology. It is high in demand by shoe factories especially in India, Taiwan and China.
PT RT is one of the producers of the best quality Nappa in Indonesia using Java leather known in Germany as "Java Box". In Indonesia that type of leather is also high in demand among the producers of ladies' shoes
Wet blue leather of cow, goat and sheep with international standard in quality is also high in demand among shoe makers in Italy, Brazil, India, China and Taiwan.
Apart from Nappa, PT RT also produces cow leather for baseball hand gloves, bags, sofa, shoe lining and suede, and embossed and corrected leather for police and military boots with a production capacity of 400,000 square feet per month. Its production capacity for goat and sheep leather is 300,000 square feet for golf glove, batting glove and garments and 100,000 square feet of lining crust and finish.
In 2009, RT made first export of leather tanning machines to Egypt with buyer EL Montaza Tannery, a leather company in Cairo.
The export of the leather tanning machines was expected to be the start of expanding market abroad .
In 2008, PT RT reported a net profit of Rp 2 billion after five years of losses. Its sales of animal leather increased significantly from Rp38 billion in 2007 to Rp 73 billion in 2008.
PT. Rajawali Gloves (RG) which was established in 1990 in Surabaya, East Java, operates in the manufacture of leather hand gloves. RG produces leather hand gloves including from synthetic leather for golfers' hand gloves and police hand gloves.
RG is a joint venture between RNI with a 61.27% stake and Mastergrip Inc. USA (16.33%), Mirae Trading Co Inc Korea (6.07%), and Mitten Co.USA (16.33%).
This year (2010) RNI and other state plantation companies PTPN I, PTPN II, PTPN III, PTPN V, PTPN VII, PTPN VIII, PTPN IX, PTPN XII, PTPN XIII and PTPN XIV--plan to build factory to produce motorcycle tires with a capacity of 7 million units of tire case and 14 million inner tubes per year.
The project to be built in Purwakarta, West Java, is estimated to cost US$ 22.2 million.
Health care products
PT. Mitra Rajawali Banjaran (MRB) was established in 1994 by PT. RNI and PT. Bimantara Artika Citra with share split of 95% and 5%. In 1998, PT Bimantara Artika Citra quit and its stake was taken over by PT. RNI making it the sole owner. For efficiency PT Mitra Rajawali Banjaran was merged with PT Skifa Rajawali late 1998.
MRB is a producer of health care equipment such as contraceptives with a capacity of 600,000 gross/year. The factory located in Banjaran, Bandung, supplies its product mainly for the national family planning program of the health ministry, the National Family Planning Coordination Board and state pharmaceutical company PT Kimia Farma.
MRB is the first producer of contraceptives in the country. With a production capacity that could be maximized to 900,000 gross, it is the largest producer of contraceptives in Southeast Asia. Its product meets standard quality of The International standard ISO 4074-2002, WHO specification Male Latex Condom 2003.
MRB has been granted certificates in recognition of good quality such as Quality Assurance (QA), ISO 9001-2000 and ISO 13485-2003 .
MRB products are sent to the market with the brand of Artika. The company exports part of its production such as to Bangladesh, Sri Lanka, Nigeria, Chili, Dubai, PNG and Iran. MRB has also received orders for contraceptives from Singapore Procarre Inc Ltd with the brand of Prosafe sold in Singapore, Vietnam and Malaysia.
MRB has subsidiary PT. Putera Rajawali Banjaran (PRB) operating dispensaries. PRB sells mainly the products of PT Phapros, a pharmaceutical company which belongs to the RNI Group.
PT. Phapros has operated in pharmaceutical industry for over four decades with factory in Semarang, Central Java. The company was formerly NV Pharmaceutical Processing Industry (Phapros) which was established in 1954 by Oei Tiong Ham Concern (OTHC). In 1961 Phapros was taken over by the government. Currently PT. RNI owns 56.57% of Phapros, with the rest owned by investing public.
In 1990, Phapros secured the certificate of Method of Manufacturing Good Medicines and it was also granted the ISO 9001 certificate in 1999 and in 2002, the ISO 9011 certificate of 2000 version and the ISO 14001 certificate in 2000. In mid 2004, Phapros introduced an agro medicine called Agromed. Currently Phapros produces 342 items of medicines including 313 non licensed items. In 2009, Phapros reported Rp45.61 billion in net profit.
PT. Rajawali Nusindo (RN) operates in import and export trade and as wholesaler, supplier and distributor of medicines, health equipment and in packaging and warehousing business. Its trade commodities include medicines, and health equipment, general commodities and products of agro industry. It has branch offices in various areas in Indonesia.
In the beginning RN served to support in the sales and exports of the products of the RNI Group only such as pharmaceuticals/health equipment, sugar, molasses, CPO/palm kernel, tea and tanned leather and to procure basic materials, fertilizer, pesticides, bags, etc.
Later RN also sells products of foreign principals. Most of its sets of health equipment are imported such as small and large laboratory equipment, dental treatment equipment, reagents, surgery threads, etc.
The types of health equipment produced locally by PT RNI and its subsidiaries include X-Ray films by PT Trovi Rajawali Indonesia in cooperation with French partner, syringes with the brand of Skifa, and condoms with the brand of Artika produced by PT Mitra Rajawali Banjaran, Bandung.
RNI has 50 branch offices all over the country.
In 2009, PT RNI reported a net profit of Rp 122.1 billion up from Rp 33.6 billion in the previous year. Almost 90% of the profit was contributed by its 11 sugar factories in Java and North Sulawesi.
Its sales in 2009, were valued at Rp 3.485 trillion or an increase of 0.09% from 2008 . This year (2010), PT RNI set income target at Rp 5.5 trillion.
Agro industry including in palm oil and sugar sectors, contributes 60% to PT RNI's income.
PT. RNI teams up with PTPN XIV to secure a working capital credit of Rp306 billion from state owned bank, Bank Rakyat Indonesia (BRI). The loan was a form of support by BRI for the country's program to revitalize its sugar industry. It was the first phase of loan provided by the bank. The second part was investment credit valued at Rp150 billion.
The first phase of the loan was to finance planting of high yield variety of seedlings over 12,000 hectares. The investment credit was for the revitalization of three sugar factories of PTPN XIV, including Pabrik Gula (PG) Takalar, PG Camming, and PG Bone.
RNI hopes to see some of its subsidiaries to launch initial public offering (IPO) in 2011 and 2012.
Members of the RNI Group:
1. PT. PG Rajawali I (sugar, animal feed and particle board factories)
2. PT. PG Rajawali II (sugar factory)
3. PT. PG Rajawali III (sugar factory)
4. PT. PG Candi Baru (sugar factory)
5. PT. PG Madu Baru (sugar plantation)
6. PT. Perkebunan Mitra Ogan (oil palm and rubber plantations)
7. PT. Perkebunan Mitra Kerinci (tea plantation)
8. PT. Rajawali Nusindo (trading)
9. PT. GIEB Indonesia (trading)
10. PT. Rajawali Citramass (plastic bag factory)
11. PT. Rajawali Tanjung Sari (leather industry)
12. PT. Rajawali Gloves (rubber hand glove industry)
13. PT. Mitra Rajawali Banjaran (contraceptive device industry)
14. PT. Putera Rajawali Banjaran (dispensaries)
15. PT. Phapros Tbk (pharmaceutical industry)
16. PT. Inti Bagas Perkasa (brake canvas industry)
Table - 1 Summary of financial reports of PT. RNI and its subsidiaries, 2008 and 2009 (Rp million) Description 2009 2008 Assets Current assets 2.286.138 2.371.991 Non current assets 474.404 572.950 Fixed assets 1.106.997 823.427 Other assets 845.562 905.653 Total assets 4.713.101 4.674.021 Liabilities and equity Current liabilities 3.140.299 3.120.693 Non current liabilities 779.661 853.098 Other liabilities Total liabilities Equity 601.232 522.670 Minority interest 191.909 177.559 Total liabilities and equity 4.713.101 4.674.021 Profit/Loss Income 3.485.191 3.482.495 Net profit 122.106 33.569 Source: PT RNI
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|Title Annotation:||COMPANY PROFILE|
|Publication:||Indonesian Commercial Newsletter|
|Date:||May 1, 2010|
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