MIRA
INFORM REPORT
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Report Date : |
21st
June, 2006. |
IDENTIFICATION
DETAILS
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Name : |
P. T.
ESSAR INDONESIA |
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Registered Office : |
Bekasi Fajar Industrial Estate, Industri III Area Kav. B-1, Cibitung, Bekasi 17520, West Java, Indonesia. |
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Country : |
Indonesia |
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Date of Incorporation : |
April 2005 |
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Com. Reg. No.: |
C-17377 HT.01.04.TH.99 |
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Legal Form : |
P.T. (Perseroan Terbatas) or Limited Liability Company |
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Line of Business : |
Cold Rolled
Steel Coil/Sheet Manufacturing |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
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Maximum Credit Limit : |
US$ 10,000,000 |
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Status : |
Satisfactory |
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Payment Behaviour : |
Usually
Correct |
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Litigation : |
Clear |
Name of Company
P.T.
ESSAR INDONESIA
Address
Head Office & Factory
Bekasi Fajar Industrial Estate
Industri III Area Kav. B-1
Cibitung, Bekasi 17520
West Java
Indonesia
Phone - (62-21) 8980152 (Hunting), 8980203, 8980467
Fax. - (62-21) 8980150, 8980151
E-mail - marketing@essar.co.id
Website - http : //www.essar.co.id
Building Area - Office & Factory
Office Space - 14 hectares
Region - Commercial
Status - Owned
Date of Incorporation
a. 8 September 1993 as P.T. ESSAR DHANANJAYA
b. April 2005 as P.T. ESSAR INDONESIA
Legal Form
P.T. (Perseroan Terbatas) or Limited Liability Company
Company Reg. No.
The
Ministry of Law and Human Rights
No. C-17377 HT.01.04.TH.99
Dated 8 October 1999
Company Status
Foreign Investment (PMA) Company
Permit by the Government Department
The
President of the Republic of Indonesia
- No. B-131/Pres/6/1993
Dated 30 June 1993
The Capital Investment Coordinating Board
- No. 126/I/PMA/1993
Dated 14 July 1993
- No. 124/III/PMA/1995
Dated 6 April 1995
- No. 285/III/PMA/1995
Dated 17 July 1995
- No. 33/II/PMA/1997
Dated 26 February 1997
- No. 1447/III/PMA/1997
Dated 14 October 1997
- No. 883/III/PMA/2000
Dated 7 July 2000
- No. 152/II/PMA/2000
Dated 11 July 2000
Related Company :
a. The ESSAR Group Members, India
b. The GARAMA Group Members
CAPITAL AND OWNERSHIP
Capital Structure :
Authorized Capital : US$ 75,000,000.-
Issued Capital : US$ 28,000,000.-
Paid up Capital : US$ 28,000,000.-
Shareholders/Owners
a. ESSAR GLOBAL LTD., of Mauritius - US$ 14,500,000.-
b. ESSAR STEEL LTD., of India - US$ 10,700,000.-
c. P.T. GARAMA ADIPRATAMA of
Indonesia - US$ 2,800,000.-
BUSINESS ACTIVITIES
Lines
of Business:
Cold Rolled Steel Coil/Sheet Manufacturing
Production
Capacity :
Cold Rolled Steel Coils/Sheets - 600,000 tons p.a.
Total
Investment :
a. Owned Capital - US$ 47.0 million
b. Loan Capital - US$ 129.0 million
c. Total Investment - US$ 176.0 million
Started Operation :
September 1997
Brand Name :
ESSAR
Technical Assistance :
ESSAR STEEL LTD., of India
Number of Employee :
311 persons
Marketing Area :
Export - 50%
Domestic - 50%
Main Customer :
Buyers in Bangladesh, Vietnam, Sri Lanka, Philippine, Malaysia, the USA and other countries
Market Situation :
Very Competitive
Main Competitors :
a. P.T. KRAKATAU STEEL
b. P.T. ISPAT STEEL
c. P.T. LITTLE GIANT STEEL
d. P.T. BUMI KAYA STEEL
Business
Trend :
Growing
BANKER, AUDITOR & LITIGATION
Bankers :
a. P.T. Bank MANDIRI Tbk
Plaza Mandiri
Jalan Jend. Gatot Subroto Kav. 36-38
Jakarta Selatan, Indonesia
b.
Hongkong and Shanghai Banking Corp. Ltd.
World Trade Center
Jalan Jend. Sudirman Kav. 29-31
Jakarta Selatan, Indonesia
Auditor
:
Internal Auditor
Litigation :
No litigation record in our database
FINANCIAL FIGURE
Annual Sales (estimated) :
2003 – US$ 84.5 million
2004 – US$ 86.0 million
2005 – US$ 87.0 million
Net Profit (Loss) :
2003 – US$ 4.2 million
2004 – US$ 4.7 million
2005 – US$ 5.2 million
Payment Manner :
Average
Financial Comments :
Satisfactory
KEY EXECUTIVES
Board of Management :
President Director - Mr. K.B. Trivedi
General Manager - Mr. V. Sridhar
Board of Commissioners :
President
Commissioner - Mr. Ir. Airlangga Hartarto
Commissioners - a. Mr.
Prashant S. Ruia
b. Mr. Rangasami Vijaya Raghavan
Signatories :
President Director (Mr. K.B. Trivedi) which must be approved by
Supervisory Board.
CAPABILITIES
Management Capability :
Good
Business Morality :
Good
Credit Risk :
Below Average
Credit Recommendation :
Credit can be proceeded
normally
Proposed Credit Limit :
Moderate amount
Maximum Credit Limit :
US$ 10,000,000.- on the 90 days of payments
OVERALL PERFOMANCE
Originally the company name was P.T. ESSAR DHANANJAYA
was established in September 1993 with an authorized capital of US$ 75,000,000
and an issued capital of US$ 25,000,000 of which US$ 2,500,000 was paid up. The
founding shareholders of the company are ESSAR GUJARAT LTD., of India and P.T.
GARAMA ADIPRATAMA, a national private company. In December 1993 the company's
issued capital of US$ 25,000,000 was paid up in full. In July 1998, the issued and paid-up capital was raised to US$
28,000,000. By the same time ESSAR GUJARAT LIMITED of India pulled out and
replaced by ESSAR STEEL LIMITED of India. The deed of amendment
was made by Mr. Rahman Arie Soetardjo, SH., a public notary in Surabaya under
Company Registration Number C-17377 HT.01.04.TH. 1999, dated October 8, 1999.
In April 2005, the name of the company changed to P.T. ESSAR INDONESIA
(P.T. EI). But, the amendment of its latest articles of association is under
process at the Department of Justice and Human Right. Reportedly, the
shareholder of P.T. EI namely ESSAR STEEL LIMITED the second largest steel
producer in India will merge with ISPAT STEEL of India also known as the
largest steel producer in India.
P.T. EI is sheltered under the ESSAR Group, a major business group of
India. The majority business stakes of the ESSAR Group is controlled by Mr.
Shashi Ruja and his family members. We note that the local partner, P.T. GARAMA
ADIPRATAMA, is a member of the GARAMA Group, a small Indonesian business group
headed by the late of Mr. Ir. Gunadharma Hartarto MBA and his younger brother
Mr. Ir. Erlangga Hartarto (44), both the sons of Mr. Dr. Ir. Hartarto
Sastrosoenarto, the former Coordinating Minister for Trade and Industry.
P.T. EI operates under Foreign Investment (PMA) facilities in the cold
rolled steel coil/sheet manufacturing industry. Its plant is located on a some
14.0 hectares land area in the Bekasi Fajar Industrial Estate, Industri III
Area Kav. B-I, Cibitung, Bekasi, West Java. The plant had been operating since
September 1997 and had been expansion frequently to increasing production
capacity. The plant has absorbed an investment of US$ 176.0 million coming from
owned capital of US$ 47.0 million and the rest from loans. It used the ESSAR
LIMITED technology of India. Firstly the whole products are marketed locally,
but since mid-1998 the company attempted to export some 50% of the products to
Bangladesh, Vietnam, USA, Sri Lanka, Canada, Malaysia, Philippines and other
countries. Steel products produced by the company among others are tinplate,
drums & barrels, automobile components, precision tubes, galvanized and
others. P.T. EI’s operation is also backed by the ESSAR Group of India, a big
size business group in India which has succeeded to develop extensive business
network in several countries. The ESSAR Group’s business operation is including
shipping, power plant, steel, financial and others. We
observed that the company’s operation has been growing in the last three years.
Generally outlook, the steel industry in Indonesia has kept on declining since end 1997 under the impact of economic crisis battering Indonesia. The crisis caused the demand of steel products to drop because property sector, steel construction sector, automotive and other sectors using steel in the country have been in sluggish. Until mid of 2001, the local demand for steel products remained weak and estimated to continue sluggish until the end of this year. The large number of other similar companies operating in Indonesia also led to fierce competition. We observed that P.T. EI’s business position is still quite good in line with the increasingly growing of its export market in the last three years.
Until this time P.T. EI has not been registered with Indonesian Stock
Exchange, so that they shall not obliged to announce their financial statement.
We observed that total sales turnover of the company in 2003 is US$ 84.5
million increased to US$ 86.0 million in 2004 and to US$ 87.0 million in 2005
and it will be higher by at least 8% in 2006. The operation in 2005 yielded an
estimated net profit at least US$ 5.2 million and the company has an estimated
total networth by at least US$ 140.0 million. We observe that P.T. EI its
financially strong being backed by foreign partner ESSAR Group of India. With
strong and sound financial condition. So far, we have never heard of the
company having been black listed by the Central Bank (Bank Indonesia). The
company usually pays its debts punctually to suppliers.
P.T. EI’s management is led out by Mr. K.B. Travedi (48). He is a
professional manager of the foreign partner, ESSAR Group. In his day-to-day
activities, he is assisted by a marketing general manager namely Mr. V.
Shidhar, a professional manager also from the ESSAR Group with broad experience
in his field. We observed that management’s reputation in said business is
fairly good. The company has had wide relation in the realm of the private
businessmen inside and outside the country. Their relation with the government
is fairly good. So far, we have never heard that the company’s management
involved in a dirty business practice or detrimental cases that settled in the
country. The company’s litigation record is clean and it has not registered
with the black list of Bank of Indonesia.
PT. ESSAR INDONESIA is fairly good for business transaction. However, in
view of the unstable economic condition in the country we recommend to treat
prudently in extending a loan to the company.
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial
base with the strongest capability for timely payment of interest and
principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No
caution needed for credit transaction. It has above average (strong)
capability for payment of interest and principal sums |
Large |
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56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect.
Satisfactory capability for payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of
interest and principal sums in default or expected to be in default upon
maturity |
Limited with full security |
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<10 |
C |
Absolute credit risk exists. Caution
needed to be exercised |
Credit not recommended |