MIRA INFORM REPORT

 

 

Report Date :

10.10.2014

 

IDENTIFICATION DETAILS

 

Name :

P.T. PINDAD (PERSERO)

 

 

Registered Office :

Jalan Jend. Gatot Subroto No. 517, Kiaracondong, Bandung 40284, West Java

 

 

Country :

Indonesia

 

 

Date of Incorporation :

29.04.1983

 

 

Legal Form :

Limited Liability Company

 

 

Line of Business :

Subject is engaged in

·         Metalworking

·         Manufacturing of Machine Tools and Industrial Machinery

·         Manufacturing of Generators, Mining Pumps, Railway Components including Rail Fastener, Airbrake Systems Vacuum Circuit Breakers, Forge Components & Casting Parts

·         Manufacturing of Armaments and Defense Equipment’s

·         Investment Holding

 

 

No of Employees :

3,181

 

 

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 1, 2014

 

Country Name

Previous Rating

(31.03.2014)

Current Rating

(01.06.2014)

Indonesia

B1

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low

 

A2

Moderate

 

B1

High

 

B2

Very High

 

C1

Restricted

 

C2

Off-credit

 

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

 

 

 

 

 

BASIC SEARCH

 

Name of Company :

 

P.T. PINDAD (PERSERO)

 

Address :

Head Office & Factory 1

Jalan Jend. Gatot Subroto No. 517

Kiaracondong, Bandung 40284

West Java

Indonesia

Phones             - (62-22) 7312073, 7312076

Fax                   - (62-22) 7301222, 7304292

E-mail               - info@pindad.com

Website                        - http://www.pindad.com

Land Area         - 30,000 sq. meters

Building Space  - 15,000 sq. meters

Region              - Industrial Zone

Status               - Owned

 

Factory II

Jalan Jend. Sudirman No. 1

Turen, Malang, 65175

East Java

Indonesia

Phones            - (62-341) 824462

Fax                   - (62-341) 824200

E-mail               - divmu@indo.net.id

Land Area         - 12,000 sq. meters

Building Space  - 8,000 sq. meters

Region              - Industrial Zone

Status               - Owned

 

Branch

Jalan Batu Ceper No. 28

Jakarta Pusat

Indonesia

Phones             - (62-21) 3806929, 3802886

Fax                   - (62-21) 3814039

E-mail               - pindadjkt@pindad.com

Building Area     - 2 storey

Office Space      - 200 sq. meters

Region              - Commercial

Status               - Rent

 

 

 

Date of Incorporation :

a.   29 April 1950 as Pusat Perindustrian Angkatan Darat (Army Industrial Centre)

b.   29 April 1983 as P.T. PINDAD (Persero)

 

Legal Form :

P.T. (Perseroan Terbatas) or Limited Liability Company

 

Company Reg. No. :

The Ministry of Law and Human Rights

-  No. C2-4134.HT.01.01.TH.1984

   Dated 20 January 1984

-  No. AHU-AH.01.10-10889

   Dated 21 July 2009

-  No. AHU-AH.01.10-18229

   Dated 22 May 2012

-  No. AHU-AH.01.10-07075

   Dated 27 February 2014

 

Company Status :

State Owned Company

 

Permit by the Government Department :

The Department of Finance

-  NPWP No. 01.060.008.8-051.000

-  No. 307/KMK.011/1983

   Dated 27 April 1983

The Department of Defense and Security

No. SKEP/65/M/IV/1983

Dated 29 April 1983

The Capital Investment Coordinating Board

No. 18/1/IU/PMDN/Industri/2011

Dated 10 May 2011

 

Related Companies :

a.                                                   P.T. CAKRA MANDIRI PRATAMA (Hospital Management Services)    

b.                                                   P.T. GOODRICH PINDAD AURONAUTICAL SYSTEM INDONESIA (Aircraft Component Mfg)

c.                                                   P.T. INTI PINDAD MITRA SEJATI (General Contacting and Trading)

d.                                                   P.T. MAN DIESEL TURBO INDONESIA (Maintenance and Installation of Turbine Machinery)

e.                                                   P.T. RUMAH SAKIT UMUM PINDAD (Hospitals Development and Management)

 

CAPITAL AND OWNERSHIP

 

Capital Structure :

Authorized Capital                            : Rp. 1,000,000,000,000.-

Issued Capital                                  : Rp.    667,542,000,000.-

Paid up Capital                                : Rp.    667,542,000,000.-

 

Shareholder/Owner :

The Government of the Republic of Indonesia     - Rp. 667,542,000,000.-

 

BUSINESS ACTIVITIES

 

Lines of Business :

a.   Metalworking

b.   Manufacturing of Machine Tools and Industrial Machinery

c.   Manufacturing of Generators, Mining Pumps, Railway Components including Rail Fastener,

      Airbrake Systems Vacuum Circuit Breakers, Forge Components & Casting Parts

d.   Manufacturing of Armaments and Defense Equipment’s

e.   Investment Holding

 

Production Capacity :

A.   Centre of Excellent Products

      - SS1-VI (Assault Rifles)                 -      100,000 pieces p.a.

      - Ammunition 38                             - 20,000,000 pieces p.a.

      - Ammunition SS.109                      - 20,000,000 pieces p.a.

      - Morter Tampela                            -        90,000 pieces p.a.

      - Hand Grenades                            -      110,000 pieces p.a.

 

B.   Energy Sector Products

      - Generators                                   -           50 units p.a.  

      - Breakers                                      -         400 pieces. p.a.

 

C.   Transportation Sector Products

      - Air Brake System for Rail Ways   -          400 units p.a.

      - Rail Fastener for Rail Ways           -   250,000 sets p.a.

      - Marine Equipment                        -            12 units p.a.

 

D.   Machine Tools

      - CNC Machine (Fanuc Tape Drill)    -      140 units p.a.

      - Conventional Machine Tools

        (Milling Leather)                            -       300 units p.a.

 

E.   Other Products

      - Metal Spare Parts                        -    1,500 tons p.a.

      - Pump for Mining                           -       300 units p.a.

 

Total Investment :

Owned Capital - Rp. 367.5 billion

 

Started Operation :

1950

 

Brand Name :

Pindad

 

Technical Assistance :

None

Number of Employee :

3,181 persons

 

Marketing Area :

Local    - 100%

 

Main Customer :

Indonesian Army

 

Market Situation :

Very Competitive

 

Main Competitors :

None

 

Business Trend :

Growing

 

BANKER, AUDITOR & LITIGATION

 

Bankers :

a.   P.T. Bank MANDIRI Tbk

      Jalan Asia Afrika No. 92

      Bandung, West Java

      Indonesia

b.   P.T. Bank NEGARA INDONESIA Tbk

      Jalan Asia Afrika No. 119

      Bandung, West Java

      Indonesia

 

Auditor :

Hendrawinata Gani & Hidayat (Grant Thornton)

 

Litigation :

No litigation record in our database

 

FINANCIAL FIGURE

 

Annual Sales :

2010 – Rp. 1,105.8 billion

2011 – Rp. 1,265.9 billion

2012 – Rp. 1,508.0 billion

2013 – Rp. 1,877.5 billion

2014 – Rp.    998.0 billion (January – June) estimated

 

Net Profit :

2010 – Rp. 34.2 billion

2011 – Rp. 47.2 billion

2012 – Rp. 76.2 billion

2013 – Rp. 97.6 billion

2014 – Rp. 40.0 billion (January – June) estimated

 

Payment Manner :

Average

 

Financial Comments :

Satisfactory

 

KEY EXECUTIVES

 

Board of Management :

President Director                            - Mr. Sudirman Said, MBA

Directors                                         - a. Mr. Ir. Tri Handjono, MM

                                                        c. Mr. Ir. Wahyu Utomo, MBA

                                                        d. Mrs. Rita Widayati, SE, AK

                                                        e. Mr. Dr. Ir. Ade Bagdja, MME

 

Board of Commissioners :

President Commissioner                   - Mr. Jend. TNI Gatot Nurmantyo

Vice President Commissioner           - Mr. Mayjend. TNI (Retired) Ali Yusuf Susanto, SIP, MM

Commissioners                                - a. Mr. Brigjend. TNI (Retired) Maman Soemantri

                                                        b. Mr. Brigjend. TNI Basuki Abdullah

                                                        c. Mr. Djaja Sukirman, Ak, MBA

 

Signatories :

President Director (Mr. Sudirman Said, MBA) or one of the Directors (Mr. Ir. Tri Handjono, MM, Mr. Ir. Wahyu Utomo, MBA, Mrs. Rita Wadayati, SE, Ak or Mr. Dr. Ir. Ade Bagdja, MME) which must be approved by Board of Commissioner

 

CAPABILITIES

 

Management Capability :

Good

 

Business Morality :

Good

 

 

OVERALL PERFORMANCE

 

Originally named Pusat Perindustrian Angkatan Darat (army industrial centre) abbreviated to PINDAD set-up in 1950. Based on the government's regulation (PP) of 1983 a Perseroan   Terbatas (P.T.) or Limited Liability Company named P.T. PERINDUSTRIAN TENTARA NASIONAL ANGKATAN DARAT or P.T. PINDAD for short was established with the authorized capital Rp. 350,000,000,000.- issued capital of Rp. 240,000,000,000.- of which Rp. 70,000,000,000.- was paid up. P.T. PINDAD shares are entirely owned by the government. P.T. PINDAD is one of all ten state owned companies dealing with strategic industries (BUMNIS)  previously headed by the Minister of Research and Technology Prof. Dr. Ir. B.J. Habibie who is also former President of the Republic of Indonesia. In August 1998, P.T. PINDAD shares were taken over by P.T. BAHANA PAKARYA INDUSTRI STRATEGIS (ex. P.T. PAKARYA INDUSTRI). P.T. PINDAD's shareholder namely P.T. BAHANA PAKARYA INDUSTRI STRATEGIS is a state-owned holding company established in August 1998 aimed to control the entire shares and controlling the operation of the above all ten BUMNIS  respectively P.T. KRAKATAU STEEL, P.T. DIRGANTARA INDONESIA (ex. P.T. INDUSTRI PESAWAT TERBANG NUSANTARA), P.T. PAL INDONESIA, P.T. PINDAD, P.T. BOMA BISMA INDRA, P.T. BARATA INDONESIA,  P.T. INDUSTRI TELEKOMUNIKASI INDONESIA, P.T. INDUSTRI KERETA API, P.T. LEN INDUSTRI and P.T. DAHANA.

 

Based on the decision of an extra-ordinary shareholders meeting of P.T. BAHANA PAKARYA INDUSTRI STRATEGI (P.T. BPIS), the government on 28 March 2002 decided to liquidize and to cease the operation of P.T. BPIS and therefore the whole of P.T. PINDAD's shares is controlled by the Government of the Republic of Indonesia. Then in July 2008 the authorized capital was raised to Rp. 1,000,000,000,000 issued capital to Rp. 367,542,000,000 entirely paid up. Later in June 2009 the board of directors and the board of commissioners had been changed. The latest according to the revision of notary deed Mrs. Nining Puspitaningtyas, SH., dated 2 January 2014 the company’s issued capital was increased to Rp. 667, 542,000,000 fully and paid up. The whole shares had been controlled by the Government of the Republic of Indonesia. The deed of amendments was approved by the Ministry of Law and Human Rights in its decision letter No. AHU-AH.01.10-07075 dated February 27, 2014.

 

P.T. PINDAD is engaged in armament manufacturing. The business activities in manufacturing a variety of military and commercial products formed the core activities of the company. The factories and offices located in Bandung and Turen, Malang, as well as the marketing office in Jakarta, support business success of the two product groups mentioned above. It products light arms, ammunitions, dynamites, artillery motors, hand grenades, etc. The products are produced to meet the requirements of the Department of Defense and Security (HANKAM), and besides that, the company also has succeeded to export partly of the products to a number of North Atlantic Treaty Organization (NATO) member countries. Since 1984 P.T. PINDAD has diversified its activity into non-military product manufacturing, like vacuum circuit breakers under the license of SIEMEN of Germany, air brake system for railway under the license of KNOOR, Germany, Key for railway trains licensed by HOLLANDIA KLOOS B.V. of the Netherlands.

 

P.T. PINDAD also produces generator sets, machine tools, pumps for mining, metal spare parts, etc. Four divisions in Bandung run the business activities for commercial products which are; Mechanical Industry and Services Division that produces ship equipments and air brakes as well as industrial machineries, Casting and Forging Division that produces forged and casting components, Special Vehicles Division, which produces a special function vehicles for both commercial and military purposes, as well as Commercial Explosives Division that produces explosives for commercial purposes such as mining.

 

Weapon Division that specialized in the production of military products with long and short barrel weapons is also located in Bandung. The other Division in Turen, Malang, produces such various kinds of military ammunitions and explosives.

 

PINDAD Products:

 

Windlass; Naval Seat; Steering Gear; Winches; Vacuum Circuit Breaker (VCB); BOMB
Air Brake; Munisi 5.56 x 45 mm; Eno Pindad Debarker; Law Enforcement Personal Equipment; Mortar Grenade; Motor Traksi; Munisi 12.7 x 99 mm; Munisi 38 Special; Munisi 9 mm; Munisi 7.65 mm; Grenade Launching Adapter PGT; Water Canon M1W-40; Combat Vehicle; Special Vihicle Purpose; Tools; Generator; Component & Parts; Counter Weight Pump; LPG Valve; Worm; Booster and SS2-V1 Seismic.

 

Some of P.T. PINDAD's major customers are Indonesian Army Forces (TNI), POLRI (Indonesian Police) Deparment of Law; Department of Forestry; Directorate of General Custom; Indonesian Oil & Gas, P.T. PERUSAHAAN LISTRIK NEGARA (P.T. PLN), P.T. KERETA API INDONESIA, P.T. INDUSTRI KERETA API (P.T. INKA), P.T. BOGASARI, P.T. KODJA BAHARI, P.T. SUMITOMO CORPORATION, FERROSTAL AG of Germany, NIIGATA DIESEL of Japan, ABC-NV of Belgium, FR LUERSSEN WERFT of Germany and many others.

 

In investment holding P.T. PINDAD was appointed as the local partner in the joint venture companies namely P.T. GOODRICH PINDAD AURONAUTICAL SYSTEM INDONESIA engaged in aircraft component manufacturing by controlling its 30% shares. P.T. PINDAD is classified as a large sized company in the country of which the operation had been running smoothly and growing steadily in the last three years.

 

The domestic demand on military equipment like submarine spare parts, battleship, other military equipments, marine equipment and spare parts and maintenance services is getting increase about 6% per year in the last five years. This matters in line with the increasing of expenditure budget in the defense and security sector in the last five years. It is forecasted that the demand will increase about 7% in the last five years. In addition, demand on military budget will increase in the next five years, in line with development of many industrial sectors who are its customer. If Gross Domestic Product growth can be maintained as an average of 10 years by 16.2% (between 5-6% economic growth) and the average state budget 18.8% of GDP, then the defense spending when projected = average of the last 10 years amounted to 4, 2% of the national budget (less than 1% of GDP) will get the number 5 years ahead is very big. Market competition is very tough on account of many other imported products being offered on the domestic market. P.T. PINDAD's business position is not too badly because it has built regular customers and extensive marketing network both on the local and overseas. We are sure that P.T. PINDAD is in position to further maintain its business in the future. Besides that, P.T. PINDAD in its operation is fully backed by the government.

 

 

Estimation of Indonesian Defense Budget, 2010 – 2014

 

No.

Description

Average 2000 - 2009

2010 E

2011 E

2012 E

2013 E

2014 E

 

1.

 

 

2.

 

 

 

3.

 

GDP

% Growth

 

APBN

% GDP

% Growth

 

Defense Budget

% GDP

% APBN

% Growth

 

16.2%

 

 

18.8%

20.5%

 

 

0.8%

4.2%

18.3%

6.167.50

16.2%

 

1.313.76

18.8%

 

 

55.13

 

4.2%

7.164.84

16.2%

 

1.560.55

18.8%

 

 

65.49

 

4.2%

8.323.44

16.2%

 

1.853.70

18.8%

 

 

77.79

 

4.2%

9.669.40

16.2%

 

2.201.92

18.8%

 

 

92.40

 

4.2%

11.233.02

16.2%

 

2.615.56

18.8%

 

 

109.76

 

4.2%

 

Until this time P.T. PINDAD has not been registered with Indonesian Stock Exchange, so that they had not obliged to announce their financial statement. According information from Ministry of State Owned Enterprise the sales turnover of the company in 2010 was amounted at Rp. 1,105.8 billion with a net profit of Rp. 34.2 billion increased to Rp. 1,265.9 billion with a net profit of Rp. 47.2 billion in 2011 increased to Rp. 1,508.0 billion with a net profit of Rp. 76.2 billion in 2012 and to Rp. 1,877.5 billion with a net profit of Rp. 97.6 billion in 2013. As from January to June 2014 the sales turnover has reached at least Rp. 998.0 billion with a net profit of at least Rp. 40.0 billion and projected to go on rising by at least 8% in 2015. The company has an estimated total networth of at least Rp. 1,100.0 billion. So far, we did not heard that the company having been black listed by the Central Bank (Bank Indonesia). The company usually pays its debts punctually to suppliers.  

 

The management of P.T. PINDAD is led by Mr. Sudirman Said, MBA (51) a professional manager with experience in armament and defense equipments manufacturing and trading. Taking his education at the College of State Accounting (Diploma of Education in 1984 and Bachelor of Education in 1990), then in 1994 he continued at George Washington University, Washington DC, USA for a Master of Business Administration, Majoring in Human Resources Management and Organizational Behavior and Development. Before being appointed as Director of P.T. PINDAD (Persero), he has experience in various institutions and companies. In 2003-2005 he served as Director of Finance & Admin, P.T. Petrokimia Nusantara Interindo. He also served in several positions at P.T. Pertamina (Persero), one Expert Staff Director (2007-2008). Before becoming Director of P.T. PINDAD (Persero), he was active in the Indika Energy Group, among others, served as Executive Director, APEC CEO Summit 2013, and most recently as Vice President Director of P.T. Petrosea, Tbk.

 

The company's management is handled by professional managers in the above business. They have wide relations with private businessmen within and outside the country. So far, we did not hear that the management of the company being filed to the district court for detrimental cases or involved in any business malpractices. The company’s litigation record is clean and it has not registered with the black list of Bank of Indonesia. P.T. PINDAD (Persero) is sufficiently fairly good for business transaction.

 

 

 

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs.61.04

UK Pound

1

Rs.98.64

Euro

1

Rs.77.74

 

 

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%)

 

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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.