|
Report Date : |
14.08.2014 |
IDENTIFICATION DETAILS
|
Name : |
P.T. ESSAR |
|
|
|
|
Registered Office : |
Steel Cold rolling Mill & Galvanizing Complex, Bekasi Fajar Industrial Estate (BFIB), Industri III
Area Kav. B-1, Cibitung, Bekasi 17520, West Java |
|
|
|
|
Country : |
|
|
|
|
|
Date of Incorporation : |
April 2005 |
|
|
|
|
Legal Form : |
Limited Liability Company |
|
|
|
|
Line of Business : |
Subject is engaged in Cold Rolled Steel Coil and Sheet Manufacturing |
|
|
|
|
No of Employees : |
560 |
RATING & COMMENTS
|
MIRA’s Rating : |
Ba |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
Status : |
Satisfactory |
|
Payment Behaviour : |
No Complaints |
|
Litigation : |
Clear |
NOTES :
Any query related to this report can be made on
e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – June 01, 2014
|
Country Name |
Previous Rating (31.03.2014) |
Current Rating (01.06.2014) |
|
Indonesia |
B1 |
A2 |
|
Risk Category |
ECGC
Classification |
|
Insignificant |
A1 |
|
Low Risk |
A2 |
|
Moderate Low Risk |
B1 |
|
Moderate Risk |
B2 |
|
Moderate High Risk |
C1 |
|
High Risk |
C2 |
|
Very High Risk |
D |
INDONESIA - ECONOMIC OVERVIEW
Indonesia, a vast polyglot
nation, has grown strongly since 2010. During the global financial crisis,
Indonesia outperformed its regional neighbors and joined China and India as the
only G20 members posting growth. The government has promoted fiscally
conservative policies, resulting in a debt-to-GDP ratio of less than 25% and
historically low rates of inflation. Fitch and Moody's upgraded Indonesia's
credit rating to investment grade in December 2011. Indonesia still struggles
with poverty and unemployment, inadequate infrastructure, corruption, a complex
regulatory environment, and unequal resource distribution among regions. The
government also faces the challenges of quelling labor unrest and reducing fuel
subsidies in the face of high oil prices.
|
Source
: CIA |
P.T. ESSAR
INDONESIA
Head
Office & Factory
Steel Cold rolling Mill & Galvanizing Complex
Bekasi Fajar Industrial Estate (BFIB)
Industri III Area Kav. B-1
Cibitung, Bekasi 17520
West Java
Indonesia
Phone -
(62-21) 8980152 (Hunting)
Fax. -
(62-21) 8980150, 8980151
E-mail - marketing@essar.co.id
Website - http://www.essar.co.id
Land Area - 14.0 hectares
Building Space - 6.5 hectares
Region - Industrial
Estate
Status - Owned
City
Office
19th Floor, Menara Karya Building
Jl. H.R. Rasuna Said Block X-5 Kav. 1-2
Jakarta 12950
Indonesia
Phone -
(62-21) 5794 4800 (hunting)
Fax. - (62-21) 5794 4811
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
a. No. C2-5.HT.01.01.TH.94
Dated 3 January
1994
b. No. C-17377.HT.01.04.TH.99
Dated 8 October
1999
c. No. C-18629.HT.01.04.TH.2003
Dated 7 August
2003
d. No. C-05572.HT.01.04.TH.2005
Dated 3 March 2005
e. No. AHU-91279.AH.01.02.Tahun 2008
Dated 28 November
2008
f. No. AHU-AH.01.10-20218
Dated 12 November 2009
g. No. AHU-AH.01.10-038846
Dated 02 February 2013
h. No. AHU-AH.01.10-56424
Dated 30 December 2013
Company Status :
Foreign Investment (PMA) Company
Permits by the Government
Department :
a. The
Department of Finance
NPWP
No. 01.070.747.9-055.000
b. The
President of the Republic of Indonesia
No.
B-131/Pres/6/1993
Dated 30 June 1993
c. 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
-
No. 1073/III/PMA/2002
Dated 30 September 2002
-
No. 448/III/PMA/2003
Dated 25 April 2003
-
No. 947/III/PMA/2004
Dated 24 September 2004
-
No. 1495/III/PMA/2005
Dated 22 December 2005
-
No. 289/II/PMA/2006
Dated 05 September 2006
-
No. 350/II/PMA/2006
Dated 31 October 2006
d. The
Department of Industry and Trade
No.
677/T/Industri/1999
Dated
14 December 1999
A member of the
ESSAR Group of India
Capital Structure
:
Authorized Capital - Rp.
156,600,000,000.- (US$. 75,000,000)
Issued Capital -
Rp. 79,344,000,000.- (US$. 38,000,000)
Paid up Capital -
Rp. 79,344,000,000.- (US$. 38,000,000)
Shareholders/Owners
:
a. ESSAR (UAE) LIMITED of Dubai -
US$ 37,900,000.- (99.74%)
b. IMPERIA CONSUTANT AND
SECURITIES Pvt. Ltd., of India -
US$. 100,000.- ( 0.26%)
Lines of Business
:
Cold Rolled Steel Coil/Sheet Manufacturing
Production
Capacity :
Existing Units
a. Cold Rolled Steel Coils/Sheets -
600,000 tons p.a.
b. Galvanizing Coils/Sheets -
200,000 tons p.a.
c. Colour Coated Coils/Sheets - 60,000 tons p.a.
Expansion Units
(31 Oct. 2006)
a. Cilegon Factory ; Hot
Rolled Steel Coils/Sheets - 2,000,000
tons p.a.
b. Tanah Laut Factory ; Pellets – 4,000,000 tons and Slabs Casting – 2,000,000 tons p.a.
Total Investment :
Existing Units
a. Owned Capital -
US$ 47.0 million
b. Reinvested Profit -
US$ 10.0 million
b. Loan Capital - US$ 179.0
million
c. Total Investment - US$ 236.0 million
Expansion Units
(31 Oct. 2006)
a. Cilegon Factory -
US$ 450.0 million
b. Tanah Laut Factory - US$
1,450.0 million
c. Total Investment - US$ 1,900.0 million
Started Operation
:
September 1997
Brand Name :
ESSAR
Technical
Assistance :
ESSAR STEEL LTD. of India
Number of Employee
:
560 persons
Marketing Area :
Export - 50%
Domestic - 50%
Main Customers :
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. BAJA INDO ERA PRIMA
d. P.T. SRIREJEKI PERDANA STEEL
Business Trend :
Growing
Bankers :
a. P.T. Bank MANDIRI Tbk
Ruko Mega Mall Cibitung
Blok B1-2
Kawasan Industri
MM2100, Cibitung
West Java, 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
Annual Sales
(estimated) :
2009 – US$ 162.0 million
2010 – US$ 180.0 million
2011 – US$ 192.0 million
2012 – US$ 208.0 million
2013 – US$ 226.0 million
Net Profit
(estimated) :
2009 – US$ 9.5 million
2010 – US$ 10.6 million
2011 – US$ 11.3 million
2012 – US$ 12.2 million
2013 – US$ 13.3 million
Payment Manner :
Almost Promptly
Financial Comments
:
Satisfactory
Board of
Management :
President Director - Mr. Kunj Bihari Trivedi
Director -
Mr. Maizalius Ali
Board of
Commissioners :
President Commissioner -
Mr. Dilip Oommen
Commissioners - a. Mr. Ir. Airlangga Hartarto
b. Mr. Vikram Amin
Signatories
:
President
Director (Mr. Kunj Bihari Trivedi) or Director (Mr. Maizalius Ali) which must
be approved by the Board of Commissioners
Management
Capability :
Good
Business Morality
:
Good
Credit Risk :
Below Average
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. The Deed of establishment has been approved
by the Minister of Justice of the Republic of Indonesia through its Decision
Letter No. C2-5.HT.01.01.TH.94 dated January 3, 1994.
The articles of association of the company
have frequently been changed. 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. In April 2005, the name of the company changed to P.T. ESSAR
INDONESIA (P.T. EI). The amendment to Deed of establishment has been approved
by the Minister of Law and Human Rights of the Republic of Indonesia through
its Decision Letter No. C-05572.HT.01.04.TH.2005 dated March 3, 2005.
In August 2008, the authorized capital was
raised and converted to Rupiah (IDR) is Rp. 156,600,000,000 (US$ 75,000,000)
issued and paid up capital to Rp. 79,344,000,000.- (US$ 38,000,000).
Concurrently, the shareholders of the company are ARYA INFRASTRUCTURE HOLDINGS
Ltd., formerly named Essar Infrastructure Holdings Ltd., of Mauritius (99.74%)
and ESSAR INVESTMENTS Ltd., of India (0.26%).
The amendment to Deed was approved by the Minister of Law and Human
Rights of the Republic of Indonesia through its Decision Letter No.
AHU-91279.AH.01.02.Tahun 2008 dated November 28, 2008 and No.
AHU-AH.01.10-20218 dated November 12, 2009.
Most recently by Deed of Notary Putut
Mahendra, SH., No. 13 dated 19 December 2012, initial shareholders pulled out and
concurrently, the whole shares of the Company is owned by ESSAR (UAE) Limited
of Dubai (99.74%) and IMPERIAL Consultant and Securities Pvt, Ltd., of India
(0.26%). The amendment to deed has been approved by the Minister of Law and Human
Rights of the Republic of Indonesia through its Decree No. AHU-AH.01.10-03846
dated February 8, 2013 and No. AHU-AH.01.10-56424 dated December 30, 2013.
We
are extremely difficult to trace or investigate the shareholders of ESSAR (UAE)
Ltd., as this company is incorporated under law of Dubai State.
We suspect that ESSAR (UAE) Ltd., is a subsidiary of ESSAR STEEL is a
global steel producer with a footprint in India, Canada, USA, the Middle East
and Asia.
The company has specialized plants for value-added steel products
such as pipes and plates and has a leadership position in the cold rolling,
galvanizing and pre-coated segments.
P.T. ESSAR INDONESIA (PT. EI) operates under
Foreign Investment (PMA) facilities in the cold rolled steel coil/sheet
manufacturing industry. Its plant is located on 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 various countries like Pacific Region, ASEAN Region, USA, China,
Australia, Middle East and South Asia.
Steel products produced by the company among others are tinplate, drums
& barrels, automobile components, precision tubes, galvanized and others.
In 2005, P.T. EI has ever explored to be in
cooperation with P.T. KRAKATAU STEEL of Indonesia to construct iron steel plant
in Indonesia. However, the cooperation
has not been realized in line with several obstacles being faced. On October 2006, P.T. EI planned to build its
own iron ore plant located in Tanah Laut Regency, South Kalimantan. In the plan of the development of plant, P.T.
EI will invest US$ 1,450.0 million. It
is planed that the plant has annual production of 4.0 million tons iron pellets
and 2.0 million tons slabs casting per annum.
However, the plant development in Kalimantan has yet to be realized due
to difficulties in supplying basic materials.
This obstacle in line with iron ore mining areas in South Kalimantan
having been controlled by companies obtained a mining concession (KP).
Therefore, the development of the plant has yet to be realized.
P.T. EI currently has a cold rolling
capacity of 400,000 MT and a galvanizing capacity of 150,000 MT per annum and
100,000 MT per annum of CR Soft products.
P.T. EI plans to focus a value added CR Soft products. The company is currently the largest producer
of Cold Rolled and Galvanized Steel in the private sector in Indonesia supplying
CR Full Hard, CR soft and GI (in coil, plain and corrugated sheet, trusses and
decking) products. According to plan P.T. EI
will increase the production capacity of cold
rolled coil (CRC) from 400,000
tons to 700,000 tons
per year, by
investing US$ 125 million.
The expansion is expected to be realized
as soon as possible so as to meet
domestic needs. We observed that P.T. EI is classified as a
large sized company of its kind in the country of which the operation has been
growing in the last three years.
Generally, the demand for the cold rolled
steel coil and sheets in the country had significantly rising by 8% to 10% per
year in the last five years, in line with the growth of automotive industries,
steel drum and container industries, and others. The solid and steady domestic economy,
increased government activity in infrastructure development and improving
investment climate in Indonesia with the rising of Country Rating to Investment
Grade, and also supported by Indonesia’s economic indicators such as inflation,
exchange rates and interest rates are expected to encourage the business
sectors.
The global economy
is expected to grow faster in 2014 than it did in 2013, although it still face
risks stemming from the slowing economic growth in developed countries and the
on going crisis in Europe. Despite the
slowing global economy, Indonesia’s economy still grew quite briskly in
2013. Indonesia’s economic growth reached
5.8% in 2013, or slightly below the projection contained in the 2013 Revised
State Budget and 2012’s economic growth of 6.2%.
|
Indonesian
Economic Indicators |
2009 |
2010 |
2011 |
2012 |
2013 |
|
• Gross Domestic Product |
4.6 |
6.1 |
6.5 |
6.2 |
5.8 |
|
• Consumer Price Index |
4.8 |
5.1 |
5.4 |
4.3 |
8.4 |
|
• Government Debt (percentage of GDP) |
28.6 |
27.4 |
26.6 |
27.3 |
28.7 |
|
• Exchange Rate (GBP / USD) |
10,389 |
9,074 |
8,773 |
9,419 |
11,500 |
|
• Population (in millions) |
- |
237.6 |
- |
- |
- |
|
• Poverty (percentage of population) |
14.2 |
13.3 |
12.5 |
11.7 |
11.5¹ |
|
• Unemployment (percentage of labor force) |
7.9 |
7.1 |
6.6 |
6.1 |
6.3 |
|
• Reserves (in billion USD) |
66.1 |
96.2 |
110.1 |
112.8 |
99.4 |
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. Therefore, the company has no
obligation to publish financial statement publicly. P.T. EI’s management is very reclusive to
outsider and rejecting to disclose its financial condition but we estimated the
total sales turnover of the company in 2010 amounted to US$ 180.0 million
increased to US$ 192.0 million in 2011 to US$ 208 million in 2012 and rose
again to US$ 226.0 billion in 2013. The
operation in 2013 yielded a net profit at least US$ 13.3 million and the company
has a total net worth of US$ 160.0 million.
It is projected that total sales turnover of the company will increase
at least 8% in 2014. So far we did not
hear that P.T. EI has been black listed by Bank Indonesia (Central Bank) or
having detrimental cases being settled in local district court.
P.T. EI’s management is headed by Mr. Kunj
Bihari Travedi (53) of India as president director. He is a professional
manager of the foreign partner, ESSAR Group.
In his day-to-day activities, he is assisted by Mr. Maizalius Ali (54) of
Indonesia as director. The management’s reputation in said business is fairly
good. 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. 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 did not hear 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.
P.T. ESSAR INDONESIA is sufficiently fairly
good for business transaction. However In view of the unstable economic
condition in the country, we recommend to treat prudently in business
transaction and in extending a loan to the company.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.61.25 |
|
|
1 |
Rs.103.02 |
|
Euro |
1 |
Rs.81.90 |
INFORMATION DETAILS
|
Analysis Done by
: |
SUM |
|
|
|
|
Report Prepared
by : |
TPT |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
|
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 |
|
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 |
|
41-55 |
Ba |
Overall
operation is considered normal. Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
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 |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
-- |
NB |
New Business |
-- |
This score serves as a reference to assess SC’s credit risk and
to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.