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MIRA INFORM REPORT
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Report No. : |
487239 |
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Report Date : |
29.01.2018 |
IDENTIFICATION DETAILS
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Name : |
PT. ROYAL INDUSTRIES INDONESIA |
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Registered Office : |
Bellagio Office Park Lantai 1 OL 2 30-32, Jl. Mega Kuningan Barat Kav.
E4. 3 Kelurahan Kuningan Timur,
Kecamatan Setia Budi Kota Jakarta Selatan 12950 DKI Jakarta |
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Country : |
Indonesia |
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Date of Incorporation : |
09.08.2004 |
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Com. Reg. No.: |
No. AHU-AH.01.03-0011089 |
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Legal Form : |
Private Limited Liability Company or Perseroan Terbatas (PT) |
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Line of Business : |
Subject is engaged in palm oil refinery industry. |
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No. of Employees : |
200 |
RATING & COMMENTS
(Mira Inform has adopted New Rating mechanism w.e.f. 23rd
January 2017)
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MIRA’s Rating : |
C |
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Credit Rating |
Explanation |
Rating Comments |
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C |
Medium High Risk |
Business dealings permissible preferably
on secured basis |
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Status : |
Poor |
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Payment Behaviour : |
Slow and Delayed |
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Litigation : |
Exist |
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 (30.06.2017) |
Current Rating (30.09.2017) |
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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.
Royal Industries Indonesia |
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Address
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Bellagio
Office Park Lantai 1 OL 2 30-32, Jl. Mega Kuningan Barat Kav. E4. 3 |
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Telephone
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+622130066151,
+622130066152, +622130066153 |
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Fax
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+622130066155,
+622130066166 |
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Mobile
Phone |
N.A.
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Email
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ho@ptrii.com |
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Web
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www.ptrii.com |
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PROFILE
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Address
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Bellagio
Office Park Lantai 1 OL 2 30-32, Jl. Mega Kuningan Barat Kav. E4. 3 |
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Office
Building |
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Date
of Establishment |
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Start
Operation |
2005
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Legal
Status |
Private
Limited Liability Company or Perseroan Terbatas (PT) |
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Legalization
(historical) |
No.
C- 21177.HT.01.01.TH.2004 |
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Government
Permit (s) |
Badan
Koordinasi Penanaman Modal (BKPM) |
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Significant
change |
PT.
Royal Industries Indonesia (the Company) was established in Jakarta on August
9, 2004. Up to the completion of this report, however, we were unable to
obtain the establishment act of the Company, so cannot provide details on its
initial capitalization and shareholder structures. On
June 5, 2008, the notarial act of the Company was changing. As written on
act, the Company’s authorized capital amounted to IDR 91,000 million or
equivalent USD 10 million, with issued and paid-up capital of IDR 72,800
million or equivalent USD 8 million. Meanwhile, its shareholder structure
comprised Mr. Muhammad Asif or also known as Malik Muhammad Asif (59.4%), Mr.
Bilal Asif (15.6%), and Mr. Muhammad Jahangir or also known as Muhammad
Nazeer (25.0%). On
February 11, 2010, the Company’s authorized capital increased to IDR 465,000
million or equivalent USD 50 million, with issued and paid-up capital of IDR
186,000 million or equivalent USD 20 million. At that same time, the
percentage of shares controlled by the shareholders changed, being: Mr.
Muhammad Asif or also known as Malik Muhammad Asif (60.0%),
Mr. Bilal Asif (20.0%), and Mr. Muhammad Jahangir or also known
as Muhammad Nazeer (20.0%). On
March 3, 2011, the notarial act was again changing, yet it was only
incidental and not affecting the Company’s capitalization structure and
shareholder structure. On
July 8, 2013, the Company published a notarial act. As written on the act,
the Company’s authorized capital was IDR 571,875,000,000.00, with issued and
paid-up capital of IDR 285,937,500,000.00. Meanwhile, shareholders of the
Company changed to consist of Mr. Muhammad Asif AKA Malik Muhammad Asif
(60%), Mr. Bilal Asif (10%), Mr. Assad Ullah Asif (20%) and Ms. Fatima Batool
(10%). On
February 20, 2015, the Company’s issued and paid-up capital was increased to
IDR 549,000,000,000. Meanwhile, authorized capital and shareholder structure
of the Company remained unchanged. As
far as we know, there has been no more 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
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Total
No. of Shareholders: 4 |
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Name
of Shareholders |
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Management
Board |
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Name
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Mr.
Muhammad Asif AKA Malik Muhammad Asif |
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Position
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President
Director |
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Nationality
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Pakistani
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Name
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Mr.
Bilal Asif |
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Position
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Director
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Nationality
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Pakistani
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Supervisory
Board |
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Name
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Mr.
Assad Ullah Asif |
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Position
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President
Commissioner |
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Nationality
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Pakistani
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Name
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Ms.
Fatima Batool |
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Position
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Commissioner
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Nationality
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Pakistani
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Management
Assessment |
The
management is deemed to have sufficient experience and industry expertise to
manage subject properly. Based
on our search, the Company's management has international managerial experience.
Based on our search, Mr. Bilal Asif as Director of the Company is also the
Chief Operating Officer of Royal Group. In addition, He is also Director of
White Pearl Group of Companies in Pakistan which is mainly engaged in Rice
and Jute manufacturing. His leadership has been instrumental in managing more
than ten thousand staff in the industrial/commercial ventures in Indonesia
which spreads out as palm plantations, edible oil refineries, shipping, and
teak wood businesses. He is also a member of Singapore Chamber of Commerce
and Industries and Rice Exporters Association of Pakistan (REAP). |
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Authorized
Signatories |
Mr.
Muhammad Asif AKA Malik Muhammad Asif as President Director and Mr. Bilal Asif
as Director 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 10 : Manufacture of food products |
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Number
of Employee |
Approximately
- 200 employees |
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Business
Category |
SIC
Code 10.4 : Manufacture of vegetable and animal oils and fats |
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Line
of Business |
SIC
Code 10.41 : Manufacture of oils and fats |
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Product
& Capacity |
N.A.
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Status
of Investment |
Foreign-invested
Company |
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Sales
Territory |
Local
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00%
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International
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00%
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Main
Items Imported |
-
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-
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Main
Items Exported |
-
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-
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Major
Customers |
N.A.
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Major
Supplier |
N.A.
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Terms
of Payment |
Purchase
Payment |
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Activity
Comment |
PT.
Royal Industries Indonesia (the Company) is a foreign-invested company
that is engaged in palm oil refinery industry. The Company started the
operation in 2005. The Company's head office is located in a commercial area,
precisely at this registered address: Bellagio Office Park Lantai 1 OL 2
30-32, Jl. Mega Kuningan Barat Kav. E4. 3, Kelurahan Kuningan Timur,
Kecamatan Setia Budi, Kota Jakarta Selatan 12950, DKI Jakarta - Indonesia. We
believe this location is leased from other parties. The Company is also
supported by three factories, namely in Semarang, Karawang, and Pontianak. Based
on our investigation, the Company previously run two business lines namely
furniture industry and palm processing plant. However, these two lines of
business are no longer in production. For the furniture business line, the
Company is supported by a factory located in Semarang. However, it has been
declining since last few years, and in 2016, furniture production has been
halted and currently, the factory in Semarang is in the process of selling
bidding even though it has not been sold yet. Meanwhile,
for the second business line of palm processing plant, the Company owns two
crude palm oil mills, with the capacity to process 75 tons of fresh fruits
bunches (FFB) per hour and 600 tons of cooking oil per day or equivalent
180,000 tons per year. The Company also sold crude palm oil to various
industries. Based on our source, the Company's CPO Processing Mills are
located in two places, namely in Kab. Karawang and Pontianak. Based
on our latest investigation, since 2017, the Company is no longer doing
production. Previously,
the Company obtained a supply of raw materials, ie CPO, from various
companies in Indonesia, some of its group and some from other companies such
as PT. Perkebunan Nusantara (Persero), PT. Alam Raya Indonesia, PT. Sawit
Sumbermas Sarana Tbk, PT. Surya Borneoindah and PT. Sawit Desa Kapuas. Trade
brands of the Company’s cooking oil or refined bleached and deodorized palm
olein products were zanish, green lands, HI, Royal, 92 and white pearl.
These products are packed in a variety of sizes, using carton, container,
drum and flexi bags. About 70% of the Company’s products were exported,
particularly to Middle East countries. Meanwhile, the other 30% were marketed
domestically. Based
on our investigation, the Company faced decreasing
performance, especially in the last three years. In 2015, demand
for its products was significantly dropping by nearly 40%. It is a fact that
the weakening condition of the world economy had lowered demand from some
customers. It was worsened by the decreasing price of commodities in
the international market. In 2015, the Company also conducted the
reduction of 300 employees for efficiency. Then,
in 2016, although the CPO commodity prices have increased, the condition of
the Company has declined and unable to rise again. Although the Company was
still in production throughout 2016, its production has declined
significantly. In fact, in June 2016, the Company recorded by Global Capital
Asia, did the first installment in arrears on a loan of USD 380 million given
by CTBC Bank, Deutsche Bank and First Gulf Bank in June 2015. However,
the Company is still in debt enough to reach IDR 5 trillion. Entering
2017, the Company is slowly discontinuing its production operations and is no
longer producing production in its three factories. The Company also
continues to reduce the number of employees. In early 2017, the Company
reduced its employees in line with the employee wage policy of Karawang
district according to UMK 2017 worth IDR 3.6 million. Based on our source,
from the beginning of 2017 to the second quarter of 2017, the Company has
made a reduction of 500 employees. Currently, there are approximately 200
employees registered and currently in the process of layoffs and in the
process of Industrial Relations Court. Moreover,
the Company had several times experienced problems with employees, as in
2012, hundreds of the Company's workers took protests in front of the
Company's factory in Kawasan Surya Cipta. During the protest, the workers
blockaded the access street in the industrial area, demanding the removal of
'outsourcing' scheme. The workers also protested the Company for giving them
the low-standard wages, and unclear regulations such as Social Security,
medical service, transport, and leaves. Our
source added that although the Company has just updated the RSPO certificate
issued by PT. SAI Global Indonesia. The certification is valid from September
27, 2016, until September 26, 2021, but from the operational side, the
Company is no longer able to bear the cost of production. Based
on our investigation, until the first quarter of 2018, the Company has
not started production. The plan, the Company will start production
again in this 2018, however, our source has not been able to confirm the
certainty of the operational plan, as the management of the Company is still
considering the decision. Currently, there are only a few staffs in its head
office and factories who are actively managing various administrative matters
for both employees and finance. Based on our search through a search of case that we
did in the State Court of Karawang, the Company was sued by Mr. Kaham, with
the classification of Torts case with the case number 1/Pdt.G/2017/PN Kwg
dated January 6, 2017. However, it is still in the trial phase. We do not
know the contents of the lawsuit because there is an internal error occurred
in the court system. In
addition, based on our search through the Case Search Information System of
Bandung State Court, it was recorded by the case number 153/Pdt.Sus-PHI/2017/PN
Bdg dated August 15, 2017, in a mass termination case. In the case, the
Company was sued by some of its former employees. The contents of the case
petitum stated that the Company's layoffs were against the law, and the
plaintiffs demanded the Company to provide Total Employee Reimbursement of
IDR 9,801,901,815. However, until now the case is still in trial stage. Based
on the collected information, the Company proposed a voluntary process
of debt restructuring (PKPU) at the Central Jakarta Commercial Court with
No.120 / Pdt. Sus.PKPU-2017 / Pn.Jkt.Pst dated September 18, 2017. The
Company is proven to have debts due and can be billed to its creditors. The
Company also recognizes having debts to 14 creditors. Total debtors'
liabilities are to separatist creditors or with material guarantees of IDR
5.60 trillion and concurrent or unsecured creditor of IDR 242.68 billion.
Furthermore, the Company's debt to its preferred creditor or creditor must be
prioritized of IDR 3.49 billion. In
the bills of separatist creditors, there are 18 syndicated banks with
receivables of IDR 5.38 trillion. Bank syndication consists of PT Bank
Mandiri (Persero) Tbk, Indonesia Eximbank, Deutsche Bank Singapore Branch,
First Gulf Bank PJSC Singapore Branch, CTBC Bank Co. Ltd. Singapore, PT Bank
ICBC Indonesia, Siemens Financial Services, Inc. and PT Bank CTBC Indonesia.
Currently, the status of the case is still in the trial because the
Company requested an extension of the debt restructuring period. |
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Sources
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Mr.
Naseri (HRD Staff of the Company, contacted on 24 January 2018) |
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Factory
Address |
Factory
Address 1 : |
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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
government is targeting economic growth to reach 5.4% in 2018. The target is
increased compared to the target in 2017, which was 5.2%. President Joko
Widodo said the moderate increase was in line with the improving world
economy. The
positive performance of the CPO industry could continue until the first
quarter of 2018. CPO production is also supported by improved weather
conditions. CPO demand is also on the rise. One of them comes from biodiesel
program. The demand for palm oil for renewable energy development is 20% and
will increase to 30% by 2020. Within
seven years, global vegetable oil demand reaches more than 236 million tons,
as released in Oilworld Outlook Conference in 2015. Thomas Mielke added that
world CPO production reached 78 million tons and supported two major
manufacturers, namely Indonesia amounted to 42 million tonnes and Malaysia as
much as 23 million tons. Next, there is Nigeria which amounted to 1.3 million
tons, Colombia totaled 1.6 million tons, Thailand totaled 2.8 million tons, and
other amounted to 7.3 million tons. Based
on this information, it shows that the palm oil plantation industry has a
good prospect business. |
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FINANCIAL
STATEMENT
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Sales
Turn Over |
2014
- IDR 690,508,000,000 (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 |
In
2013, the Company obtained USD 290 million facilities through bookrunner, and
mandated lead arrangers DBS and Indonesia Eximbank. The
facility was split into a USD 205 million three-year credit facility, a USD
60 million five-year and a USD 25 million three-year term loan. Syndication
saw Bank Internasional Indonesia and First Gulf Bank joining in as mandated
leads, while Siemens Financial Services came in as lead arranger. PT. Bank
Danamon Indonesia Tbk and Bank Commonwealth concluded the syndicate as
arrangers. The proceeds were for working capital and refinancing purposes. |
CREDITWORTHINESS
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Management
Capability |
Poor
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Business
Morality |
Poor
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Payment
Manner |
Poor
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Financial
Condition |
Poor
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Operating
Trend |
Down
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Conclusive
remarks |
Based
on the information shown above, we learn that the Company is engaged in palm
oil refinery and furniture industry; and began operating in 2005.
However, in 2017, the Company has made a production halt due to unable to
bear the production costs including the employee salaries. So far, the
Company has laid off about 500 employees, and is currently in the process of
terminating the remaining 200 employees. As
we learn, in terms of operational, the Company has dropped significantly and
until the first quarter of 2018, the Company has not operated yet. In
terms of the financial aspect, it is stated that the Company made a number of
job cuts and also recorded the first installment in arrears. For this reason,
it can be classified that the Company is now in high-risk condition. Although
the CPO business has a good prospect in the coming year and regarding the
current condition of the Company, we rate the Company's credit opinion at 'high risk.' For
security reason, then, we advise those wishing to make cooperation with and
to grant loans to the Company to ask for strong collaterals from the owners
and management. |
FOREIGN EXCHANGE RATES
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Currency |
Unit
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Indian Rupees |
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US Dollar |
1 |
INR 63.50 |
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1 |
INR 90.92 |
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Euro |
1 |
INR 79.07 |
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IDR |
1 |
INR 0.0048 |
Note :
Above are approximate rates obtained from sources believed to be correct
INFORMATION DETAILS
|
Analysis Done by
: |
PRI |
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Report Prepared
by : |
DNS |
RATING EXPLANATIONS
|
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.