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MIRA
INFORM REPORT
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Report No. : |
503943 |
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Report Date : |
20.04.2018 |
IDENTIFICATION DETAILS
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Name : |
PT. IMR ARC STEEL |
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Registered Office : |
Dusun Randuhardjo, RT. 036, RW. 010, Kelurahan
Randuharjo, Kecamatan Pungging, Kab. Mojokerto 61384, Jawa Timur |
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Country : |
Indonesia |
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Financials (as on) : |
2017 [Summarized] |
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Date of Incorporation : |
2015 |
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Com. Reg. No.: |
AHU-AH.01.03-0171760 |
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Legal Form : |
Private Limited Liability Company or Perseroan Terbatas (PT) |
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Line of Business : |
· Manufacture of basic metals · Manufacture of basic iron and steel and of ferro-alloys |
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No. of Employees : |
Per 2017 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
A |
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Credit Rating |
Explanation |
Rating Comments |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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Status : |
Satisfactory |
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Payment Behaviour : |
No Complaints |
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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
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Country Name |
Previous
Rating (30.09.2017) |
Current Rating (31.12.2017) |
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Indonesia |
A2 |
A2 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low Risk |
A2 |
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Moderately Low Risk |
B1 |
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Moderate Risk |
B2 |
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Moderately High Risk |
C1 |
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High Risk |
C2 |
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Very High Risk |
D |
INDONESIA - ECONOMIC OVERVIEW
Indonesia, the largest economy in Southeast Asia, has seen a slowdown in
growth since 2012, mostly due to the end of the commodities export boom. During
the global financial crisis, Indonesia outperformed its regional neighbors and
joined China and India as the only G20 members posting growth. Indonesia’s
annual budget deficit is capped at 3% of GDP, and the Government of Indonesia
lowered its debt-to-GDP ratio from a peak of 100% shortly after the Asian
financial crisis in 1999 to 33% today. While Fitch and Moody's Investors
upgraded Indonesia's credit rating to investment grade in December 2011,
Standard & Poor’s has yet to raise Indonesia’s rating to this status amid
several constraints to foreign direct investment in the country, such as a high
level of protectionism.
Indonesia still struggles with poverty and unemployment, inadequate
infrastructure, corruption, a complex regulatory environment, and unequal
resource distribution among its regions. President Joko WIDODO - elected in
July 2014 – seeks to develop Indonesia’s maritime resources and pursue other
infrastructure development, including significantly increasing its electrical
power generation capacity. Fuel subsidies were significantly reduced in early
2015, a move which has helped the government redirect its spending to
development priorities. Indonesia, with the nine other ASEAN members, will
continue to move towards participation in the ASEAN Economic Community, though
full implementation of economic integration has not yet materialized.
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Source
: CIA |
COMPANY IDENTIFICATION |
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Company Name |
PT. IMR ARC STEEL |
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Address |
Dusun
Randuhardjo, RT. 036, RW. 010 |
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Telephone |
+623216820101 |
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Fax |
+623216820102 |
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Mobile Phone |
N.A. |
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Email |
arif.rahman@arcsteelasia.com |
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Web |
N.A. |
PROFILE |
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Address |
Dusun Randuhardjo, RT. 036, RW. 010 |
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Office Building |
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Date of Establishment |
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Start Operation |
the end of 2016 |
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Legal Status |
Private Limited Liability Company or Perseroan Terbatas (PT) |
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Legalization (historical) |
No. AHU-0013016.AH.01.01.Tahun 2015 |
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Government Permit (s) |
Badan Koordinasi
Penanaman Modal (BKPM) |
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Significant change |
PT. IMR
ARC Steel (the Company) was established in 2015 in Mojokerto, East Java.
Up to the completion of this report, however, we were unable to obtain the
establishment act of the Company; so that we are unable to provide details
about its initial capitalization and shareholder structure. On October 16, 2015, the Company published a notarial act. As written
on the act, authorized capital of the Company was USD 2,500,000 or equivalent
with IDR 32,457,500,000 entirely issued and paid up. Meanwhile,
shareholders of the Company were IMR Holding AG of Switzerland (99.00%) and
IMR International Metallurgical Resources AG of Switzerland (1.00%). On August 31, 2017, the Company published the latest notarial act, but
there was no significant change in its capitalization and shareholder
structure. As far as we know, there has been no change in the Company’s notarial
act as published by the Ministry of Justice. |
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Capitalization |
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SHAREHOLDERS & MANAGEMENT |
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Shareholders |
Total No. of Shareholders: 2 |
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Name of Shareholders |
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Management Board |
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Name |
Mr. Anirudh Misra |
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Position |
President Director |
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Nationality |
Indian |
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Name |
Mr. Heyno Michael Smith |
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Position |
Vice President Director |
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Nationality |
African |
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Supervisory Board |
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Name |
Ms. Naizheng Yang |
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Position |
Commissioner |
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Nationality |
Chinese |
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Management Assessment |
The management is deemed to have sufficient experience and industry
expertise to manage subject properly. |
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Authorized Signatories |
Mr. Anirudh Misra as a President Director and Mr. Heyno Michael Smith
as a Vice President Director of the Company which must be approved by
shareholders meeting. |
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Affiliate (s) / Associate (s) |
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KEY DATA ON OPERATIONS |
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Registered Activities |
SIC Code 24 : Manufacture of basic metals |
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Employee |
Per 2017 |
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Business Category |
SIC Code 24.1 : Manufacture of basic iron and steel and of
ferro-alloys |
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Line of Business |
SIC Code 24.10 : Manufacture of basic iron and steel and of
ferro-alloys |
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Product & Capacity |
- Stainless Steel - 30,000 MT p.a. |
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Status of Investment |
Foreign-invested Company |
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Sales Territory |
Local |
30% |
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International |
70% |
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Main Items Imported |
Machinery and Raw Materials |
China |
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Main Items Exported |
Cold Rolled Steel |
South Korea |
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Major Customers |
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Major Supplier |
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Terms of Payment |
Purchase Payment |
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Activity Comment |
PT. IMR ARC Steel (the Company)
is a foreign-invested company that started the operation at the end of 2016.
The Company's head office and factory are located in a commercial area of
Mojokerto, precisely at the registered address Dusun Randuharjo, RT. 036, RW.
010, Kelurahan Randuharjo, Kecamatan Pungging, Kab. Mojokerto, 61384, Jawa
Timur, Indonesia. We believe the location is leased by the Company. Based on our investigation, the Company is engaged in the manufacture
of stainless steel. The Company starts the production at the end of 2016. The
Company produces Stainless Steel Sheets and coils in all the grades.
Meanwhile, 70% of the produce is exported and rest is sold in the domestic
market. To support its business, the Company imports most of their machines
from China. For other equipment such as pipes, filters, and other supporting
equipment, however, the Company is supported by retailers in the area of
Surabaya. In addition, for the raw materials such as hot rod coil, the Company
is supported by principals in China, India, and Taiwan with the
principal name are Clariant Power System Ltd. of India and Unique Automation
LLC. of India. In 2017, the Company has an import quota of 500 tons per
month to produce cold-rolled steels. Moreover, construction of the Company's factory is conducted by a
contractor, PT. Shanty Wiraperkasa. The factory stands on an area of 17,300
square meters. In its operation, the Company has the production capacity of 2,500 MT
of stainless steel per month (or equivalent to 30,000 MT per year). For its marketing, the Company distributes some 70% of its products to
overseas markets, namely India, South Korea, Denmark, Europe, and East Asia.
Meanwhile, the other products are distributed to the domestic market. Currently, constraints faced by the Company are in form of
availability of facilities and infrastructure, such as motorway access.
Motorway access is important for the Company because it uses trucks with the
capacity of 60-70 tons. Apparently, the truck gets in trouble if driving through regular
streets. In addition, the number of trained human resources in Mojokerto is
still very few. Therefore, the Company has to bring workers from out of town;
and it certainly makes the cost increase. In 2016, although the Company in commissioning phase, the Company
already receives contracts from several customers for producing 300 - 400
tons of products. As we learn, the commissioning phase already completed in September
2016. In 2017, the Company majority sells its products to overseas
market and has realized to export about 10 containers every month. The
Company also noted satisfactory results since it began operating in late 2016
with a high export achievement despite the Company classified as a new player
in the cold-rolled steel industry. IN 2018, the Company will open its market as far as possible to beyond
the Southeast Asia region which currently becomes one of the biggest sales
for the Company. Unfortunately, our source refused to provide information on
the Company's turnover rate in 2017. In addition, in accordance with the announcement No.
660/1399/416-203.A/2015 issued by the Environment Agency of Mojokerto, dated
October 27, 2015, the Company has made application for the environmental
permit in industrial activity. Currently, the Company is supported by approximately 100 employees. |
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Litigation |
At the time this report is written, this
Company has not been involved in any criminal or civil cases. This statement
is based on the search result for cases conducted at the State Court in the
area where the Company was established and operates today. |
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Factory and Registered Address |
Dusun Randuhardjo, RT. 036, RW. 010, |
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BANKING INFORMATION |
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Banker (s) |
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Insurance |
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BUSINESS PROSPECTS |
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Business Prospects |
The global steel demand growth in 2018 will decline to 1.6% from an
increase in the previous year by 7% due to the slowing consumption in China. The World Steel Association (WSA) reported that the global steel
demand in 2018 grows moderately by 1.6% year on year (yoy) to 1.65 billion
tons. Meanwhile, in 2017, the steel demand growth reached 7% yoy to 1.62
billion tons from 1.52 billion tons last year. Worldsteel Economics Committee said the slowing global steel demand
growth in 2018 occurs along with a moderate rise in consumption in the
country of Panda. China is estimated to absorb steel of 765.7 million tons in
2017 and 2018. Whereas in 2017 China's steel demand increased 12.4% yoy from
2016 amounting to 681 million tons. Meanwhile, the Indonesian Iron and Steel Industry Association (IISIA)
is still expecting growth in 2018 in accordance with the target set. This
growth can only be achieved with accurate import control by the government. Until the end of the first quarter of 2018, the association has not
received a demand-related picture because it is still processing the data
from the producers. Nevertheless, the association still hopes the steel
industry can still grow as predicted, ie more than 7%. Over the past year, the domestic demand for steel has been around 13.5
million tons and is expected to reach 14.5 million tons in 2018. The Association also believes that domestic steel utility capacity can
only be optimal when imports are controlled. Therefore, the government is
required to control imports as needed. Based on the data shown above, we believe that national and global
steel demand still has good prospects, although China plans to reduce
production this year. |
FINANCIAL STATEMENT |
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Sales Turn Over |
2017 - IDR 53,012,912,010 (Estimated) |
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Total Assets |
As the Company is not a publicly listed company, we are unable to give
a detailed picture of the financial condition of the Company. |
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Other Financial Data |
As the Company is not a publicly listed company, we are unable to
provide details on the financial condition of the Company. |
CREDITWORTHINESS |
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Management Capability |
Adequate |
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Business Morality |
Adequate |
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Payment Manner |
No Complaints |
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Financial Condition |
Satisfactory |
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Operating Trend |
Undetermined |
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Conclusive remarks |
Based on the information shown above, the Company already started
the production activity at the end of 2016 and engaged in
the manufacture of stainless steel. The Company already produces cold
rolled steel and steel sheet with the annual capacity around 30,000 Metric
Tons. In its operation, the market share of the Company is 70% export and 30%
for the domestic market. As we learn, the operational performance still undetermined, the
Company already receives contracts from several buyers who want to buy the
Company’s products. Currently, 300-400 tons of the Company’s products are
already purchased by customers, and in 2018, the Company will expand
their marketing territory into USA and Europe. Meanwhile, the global steel demand growth in 2018 will decline to
1.6% from an increase in the previous year by 7% due to slowing Chinese
consumption.In line with the condition above, we believe that the Company
could penetrate in the overseas market and domestic market with the support
from its shareholder. Currently, the Company already expand their overseas market into
Southeast Asia countries and India. So, we come to the conclusion that the
Company has a prospective business in the future. However, the Company has just started its operation in late 2016, so
we conclude the credit risk of the Company at medium to
high risk. Nevertheless, for security reasons, we advise those wishing to
corporate with or grant loans to this Company to keep asking for adequate
collateral from shareholders. |
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 65.78 |
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1 |
INR 93.42 |
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Euro |
1 |
INR 81.39 |
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IDR |
1 |
INR 0.0048 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
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Analysis Done by
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NIS |
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Report Prepared
by : |
TPT |
RATING EXPLANATIONS
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Credit Rating |
Explanation |
Rating Comments |
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A++ |
Minimum Risk |
Business dealings permissible with minimum
risk of default |
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A+ |
Low Risk |
Business dealings permissible with low
risk of default |
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A |
Acceptable Risk |
Business dealings permissible with
moderate risk of default |
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B |
Medium Risk |
Business dealings permissible on a regular
monitoring basis |
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C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
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D |
High Risk |
Business dealing not recommended or on
secured terms only |
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NB |
New Business |
No recommendation can be done due to
business in infancy stage |
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NT |
No Trace |
No recommendation can be done as the
business is not traceable |
NB is stated where there is insufficient information to facilitate rating. However, it is not to be considered as unfavourable.
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 are as follows:
·
Financial
condition covering various ratios
·
Company
background and operations size
·
Promoters
/ Management background
·
Payment
record
·
Litigation
against the subject
·
Industry
scenario / competitor analysis
·
Supplier
/ Customer / Banker review (wherever available)
This report is issued at
your request without any risk and responsibility on the part of MIRA INFORM
PRIVATE LIMITED (MIPL) or its officials.