MIRA INFORM REPORT

 

 

Report No. :

509597

Report Date :

23.05.2018

 

 

 

IDENTIFICATION DETAILS

 

Name :

PT. ISPAT PANCA PUTERA

 

 

Registered Office :

Kawasan Industri Gresik, Jl. Tridharma No. 3 Kav. D1-9/14-22 , Kelurahan Randuagung, Kecamatan Kebomas ,Kab. Gresik 61121 ,Jawa Timur

 

 

Country :

Indonesia

 

 

Date of Incorporation :

June 2006

 

 

Legal Form :

Private Limited Liability Company or Perseroan Terbatas (PT)

 

 

Line of Business :

·         Manufacture of basic iron and steel and of ferro-alloys

·         Manufacture of basic metals

 

 

No. of Employees :

320

 

 

RATING & COMMENTS

(Mira Inform has adopted New Rating mechanism w.e.f. 23rd January 2017)

 

MIRA’s Rating :

A

 

Credit Rating

Explanation

Rating Comments

A

Acceptable Risk

Business dealings permissible with moderate risk of default

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

Slow but Correct

 

 

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

 

Country Name

Previous Rating

(30.09.2017)

Current Rating

(31.12.2017)

Indonesia

A2

A2

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low Risk

 

A2

Moderately Low Risk

 

B1

Moderate Risk

 

B2

Moderately High Risk

 

C1

High Risk

 

C2

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 34% today. In May 2017 Standard & Poor’s became the last major ratings agency to upgrade Indonesia’s sovereign credit rating to investment grade.

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.

 

Source : CIA

 

COMPANY IDENTIFICATION

 

Company Name

PT. Ispat Panca Putera

 

Address

Kawasan Industri Gresik, Jl. Tridharma No. 3 Kav. D1-9/14-22
Kelurahan Randuagung, Kecamatan Kebomas
Kab. Gresik 61121
Jawa Timur - Indonesia

 

 

Telephone

+62313970609, +62313974191

Fax

+62313972762

Mobile Phone

N.A.

 

 

Email

info@ispatpanca.com

Web

www.ispatindo.com/OtherPanca.htm

 

 

 PROFILE

 

Address

Kawasan Industri Gresik, Jl. Tridharma No. 3 Kav. D1-9/14-22
Kelurahan Randuagung, Kecamatan Kebomas
Kab. Gresik 61121
Jawa Timur - Indonesia

 

Office Building

a.

Area - Industrial

b.

Status - Leased

Date of Establishment

-

June 2006

 

Start Operation

2007

 

 

Legal Status

Private Limited Liability Company or Perseroan Terbatas (PT)

 

 

Legalization (historical)

No. AHU-AH.01.10-39536
Dated, 2013

No. AHU-AH.01.03-0188351
Dated, 07 November 2017

 

 

Government Permit (s)

Direktorat Jenderal Pajak
NPWP - 01.659.764.3-612.000

 

 

Significant change

PT. Ispat Panca Putera (the Company) was established in Jakarta Barat - DKI Jakarta on June 2006. Up to the completion of this report, however, we are unable to obtain establishment act of the Company; so that we cannot show you details about its first capitalization and shareholder structure. 

Per July 27, 2013, the Company’s authorized capital amounted to IDR 500,000,000,000 –of which IDR 434,750,000,000 was issued and paid up by PT. Ispat Indo (99.000%) and PT. Ispat Wire Products (1.000%). 

On October 4, 2017, the Company issued a revision notarial act, yet without changing its capitalization and shareholder structure 

Up to the completion of this report, there has been no more change in the Company’s notarial act. 

 

 

Capitalization

     -    Authorized Capital
     -    Issued Capital
     -    Paid Up Capital



IDR 500,000,000,000
IDR 434,750,000,000
IDR 434,750,000,000

 

 

 SHAREHOLDERS & MANAGEMENT

 

Shareholders

Total No. of Shareholders: 2
Shareholders as 07 November 2017
Total Shareholding private – 434,750 shares

 

Name of Shareholders

- 

PT. Ispat Indo
(430,402 shares) - 99.000 %

- 

PT. Ispat Wire Products
(4,348 shares) - 1.000 %

 

 

Management Board

 

 

Name

Mr. Baldeo Prasad Banka

 

 

Position

Director

 

 

Nationality

Indian

 

 

Name

Mr. Sunil Kumar Jaju

 

 

Position

Director

 

 

Nationality

Indian

 

 

Name

Ms. Annisa Radhiana Hasan

 

 

Position

Director

 

 

Nationality

Indonesian

 

 

Name

Ms. Nur Saidah

 

 

Position

Director

 

 

Nationality

Indonesian

 

 

Name

Mr. Ashok Dutta

 

 

Position

Director

 

 

Nationality

Indian

 

 

Supervisory Board

 

 

Name

Mr. Herman Hasan Basri

 

 

Position

Commissioner

 

 

Nationality

Indonesian

 

 

Management Assessment

The management is deemed to have sufficient experience and industry expertise to manage subject properly.

 

 

Authorized Signatories

Mr. Baldeo Prasad Banka, Ms. Nur Saidah, Ms. Annisa Radhiana Hasan, Mr. Sunil Kumar Jaju and Mr. Ashok Dutta as Directors, which must be approved by shareholders meeting.

 

 

Affiliate (s) / Associate (s)

  - 

The Ispat Projects Ltd. of India
(Activities of holding companies)

  - 

Indo Investments Pte. Ltd of Singapore
(Activities of holding companies)

  - 

Mudra Viniyog Limited of India
(Activities of holding companies)

  - 

PT. Ispat Indo
(Activities of holding companies)

  - 

PT. Ispat Wire Products
(Manufacture of wire products, chain and springs)

  - 

Arcelormittal Group
(Unlimited Company)

  - 

PT. Ispat Bukit Baja
(Manufacture of basic iron and steel and of ferro-alloys)

 

 

KEY DATA ON OPERATIONS

 

Registered Activities

SIC Code 24 : Manufacture of basic metals

 

 

Employee

Per 2018
320

 

 

Business Category

SIC Code 24.1 : Manufacture of basic iron and steel and of ferro-alloys

 

 

Line of Business

SIC Code 24.10 : Manufacture of basic iron and steel and of ferro-alloys

 

 

Product & Capacity

- Round Bars and Deformed Bars - 300,000 MT p.a.

 

 

Status of Investment

Foreign-invested Company

 

 

 

Sales Territory

Local

80%

 

 

 

 

International

20%

 

 

 

 

 

Main Items Imported
And Country Origin

Machinery
Machinery
Metal Product

Japan
Germany
China

 

 

 

Main Items Exported
and Country Destination

Steel Bars
Steel Bars

Australia
Malaysia

 

 

Major Customers

  - 

PT. Hanwa Steel Service Indonesia

 

 

Major Supplier

  - 

PT. Ispat Indo

 

 

Terms of Payment

Purchase Payment
Domestic: Telegraphic Transfer (T.T) with Credit Term up to 30 days;
Overseas: Telegraphic Transfer (T.T) with Credit Term up to 30 days;

Sale Terms
Domestic: Advance payment with Telegraphic Transfer (T.T);
Overseas: Advance payment with Telegraphic Transfer (T.T);

 

 

Activity Comment

PT. Ispat Panca Putera (the Company) is a foreign-invested company that is engaged in steel industry. The Company began operation in 2007. Head office, registered address and factory of the Company are located at Kawasan Industri Gresik, Jl. Tridharma No. 3 Kav. D1-9/14-22, Kelurahan Randuagung, Kecamatan Kebomas, Kab. Gresik 61121, Jawa Timur - Indonesia. We believe this location is leased by the Company for long term time period. The factory is situated on 6.4 hectares of land. 

The Company is a member of India-based groups, particularly ArcelorMittal Group that is one of the world’s leading steel and mining groups in India. ArcelorMittal Group has all major markets including automotive, construction, household appliances and packaging. ArcelorMittal is present in 60 countries and has an industrial footprint in 19 countries.

Based on our investigation, the Company is engaged in Steel Industry, producing Round Bars and Deformed Bars, with annual installed capacity of around 300,000 Mt. The Company is known as one of the largest Bar Mills in Indonesia.

As additional info, the current production utilization of the Company is only 60%. For this reason, the Company is still potential to increase its actual production capacity.

The Company produces High Tensile round and Plain Bars. Its main products are 12-45 mm round and deformed bars, billet materials with 140/140 mm and 150-150 mm x 4 m length. 

Some of the Company’s products are as follows:

• Round Bar 12 mm - 45 mm

• Deformed Bar 12 mm - 45 mm

• Shafting Bar 12 mm - 80 mm

For the production process, the Company uses some raw materials from local market, particularly billet materials from its holding PT. Ispat Indo. The Company also uses some raw materials from overseas market particularly China, and some machineries from Japan and Germany. In present time, the percentage of metal materials used by the Company for its production activities is similar, namely 50:50 for local and imported materials.

For purchase payment, the Company uses Telegraphic Transfer (T.T) with credit term of up to 30 days, both with local and overseas suppliers. Meanwhile for sales transaction, the Company applies advance payment with Telegraphic Transfer (T.T), both with local and overseas customers. So this, the Company has not faced any payment default either from its customers or to its suppliers.

The Company’s products are 20% exported, such as to Australia, Malaysia, etc. Meanwhile the other 80% are marketed in domestic market. One of its major customers in domestic market is PT. Hanwa Steel Service Indonesia. The Company’s steel products are applicable for various business and industrial sectors, such as infrastructure, automotive industry, general construction, and so on.

In addition, the Company already received ISO 9001 certification and ISO 14001 certification. The Company also already received other certifications, such as from Lloyd`s Register Quality Assurance, UKAS Quality Management, UKAS Environmental Management, SNI Certificate with SNI Approval Certificate: SNI 07-2052-2002, SMK3, etc.

According to our source, depreciation of rupiah has affected to the Company’s financial performance, particularly to their profit, since the Company uses some imported materials. Apart from the situations, however, regarding the market demand in 2015, the Company’s sales performance remained stable. Along the year 2016, in fact, to meet the increasing demand in local and overseas market, the Company produced around 12,000 - 13,000 tons of steel products per month in quarter I 2016. Meanwhile in quarter II until the end of 2016, the Company produced around 13,000 - 15,000 tons of steel products per month.

In 2017, the Company was still able to book positive performance, yet not significantly increasing.

Currently, the Company is supported by approximately 320 employees, or increasing by some 15 employees if compared to the number of employees in 2016. 

As information, based on news in mass media in 2015, we found that legal status of the Company’s factory building that stands on some 20,000sqm of land is unclear. It is because there is a party who claims that the 20,000sqm land is a part of 70,650 sqm land belonged to the late Mr. Kohir bin Abdoel Majid.

According to Rozi, heir of Mr. Kohir bin Abdoel Majid, the 70,650sqm land that is located in Karesidenan Surabaya, precisely at Randu Agung Kebomas Gresik, was belonged to NV. De Bataafsche Petrolium Maatschappj (an oil company) with Sigendom Verponding Letter No. 19409.

Meanwhile, based on Akta Hibah No. 145/02/1942 that was made before a public notary, EH. Carpentier Alting, NV. De Bataafsche Petrolium Maatschappj had granted the land property on September 15, 1931, Certificate Ukur No. 170/16-08-1930, to Mr. Kohir (as the grantee). 

Initially, according to Rozi, PT. Ispat Panca Putra occupied the land under a tenancy scheme. Yet, up to present time, the heirs have never received any money from the tenancy. Up to the completion of this report, however, we are unable to find info about progress of the case. So far, this case is not registered at the court information system in Gresik.

 

 

Litigation

Based on the case No: 36/PDT.G/2015/PN GSK, the Company became the Plaintiff against KOden International Co, Ltd as the Defendant. The case classification is "rent-lease". Final decision of the court toward the case is as follow:

1. to state that the Defendant had been legally summoned, but not present in the court;

2. to grant the Plaintiff partially, with Verstek;

3. to state that the sales contract made by the plaintiff and the defendant is legally binding.

4. to punish the Defendant to pay compensations of :

- material compensation: USD225,000 or equivalent to IDR. 2,995,425,000, in accordance to the exchange rate dated May 20 2015, (@USD1= Rp. 13,313,-).

5. to punish the defendant to pay the court cost of Rp.601,000.

6. to refuse the other claim of the Plaintiff.

Meanwhile, based on the case No. 4/PHI/2015/PN GSK, the Company became the Defendant against Asish Ramesh Kapoor as the Plaintiff. The case classification is "unilateral dismissal dispute". Yet, final decision of the court over the case is unknown.

 

 

Factory and Registered Address

Kawasan Industri Gresik, Jl. Tridharma No. 3 Kav. D1-9/14-22
Kelurahan Randuagung, Kecamatan Kebomas
Kab. Gresik 61121
Jawa Timur - Indonesia
Phone : +62313970609, +62313974191
Fax : +62313972762
Email : info@ispatpanca.com  

 

 

 BANKING INFORMATION

 

Banker (s)

- 

PT. Bank Maybank Indonesia Tbk

 

 

Insurance

- 

Badan Penyelenggara Jaminan Sosial (BPJS)

 

 

 BUSINESS PROSPECTS

 

Business Prospects

Domestic demand for steel in 2018 is estimated to reach 14.5 million tons. The demand is 7% higher than 2017s demand of 13.5 million tons. Executive Director of the Indonesian Iron and Steel Industry Association (IISIA) stated the positive projection encourages multinational steel manufacturers to start investing in Indonesia by 2018. In 2018, steel demand is expected to increase by 800,000 tons in Indonesia. 

On the other hand, although it is predicted to increase national steel industry players still face high gas and electricity tariff constraints and government policies that have not been aligned with the local players in the business. Thus, the national steel industry players hope that the constraints can be minimized by the government for 2018 steel production in accordance with the target.

Based on information shown above, we believe that the stainless consumption in 2018 will increase. This will bring positive effect for the Company, regardless challenges in steel industry.

 

 

 FINANCIAL STATEMENT

 

Sales Turn Over

2013 - IDR 217,000,000,000 (Estimated)
2014 - IDR 243,040,000,000 (Estimated)
2015 - IDR 262,483,200,000 (Estimated)
2016 - IDR 275,000,000,000 (Estimated)
2017 - IDR 295,400,000,000 (Estimated)

 

 

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.

 

 

Other Financial Data

As the Company is not a publicly listed company, we are unable to give a detailed picture of the financial condition of the Company. 

 

 

CREDITWORTHINESS

 

Management Capability

Adequate

 

 

Business Morality

Adequate

 

 

Payment Manner

Slow but Correct

 

 

Financial Condition

Satisfactory

 

 

Operating Trend

Up

 

 

Conclusive remarks

The Company has been operating in steel industry since 2007, producing Round Bars and Deformed Bars. The Company is a member of India-based groups, particularly ArcelorMittal Group of India, which is one of the world’s leading steel and mining groups. ArcelorMittal Group has all major markets including automotive, construction, household appliances and packaging. ArcelorMittal is present in 60 countries and has an industrial footprint in 19 countries. With only 60% production utilization in present time, the Company is still potential to increase its actual production performance, in line with the increasing steel consumption in domestic and overseas market.

In term of sales performance, the depreciation of rupiah has affected to the Company’s financial performance, particularly to their profit, since the Company uses some imported materials. Apart from the situations, however, regarding the market demand in 2015, the Company’s sales performance remained stable. In 2016 and 2017, performance of the Company was also positive. In another side, in term of payment method with their customers, it appears that the Company is able to anticipate the trade-receivable risk properly; so that the risk to suppliers can be reduced.

Related to the Company’s qualified business capability, adequate financial condition, and good business prospect, we rate the Company's credit opinion to "medium risk". It is because steel industry in Indonesia is also not free from challenges. As we learn, high electricity and gas tariffs are still a high challenge for steel industry in Indonesia.

For security reason, nevertheless, we advise those wishing to make cooperation with and to grant loans to the Company to ask for adequate collateral from the owners and management.

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

INR 68.02

UK Pound

1

INR 91.25

Euro

1

INR 80.07

IDR

1

INR 0.0048

 

Note : Above are approximate rates obtained from sources believed to be correct

 

 

INFORMATION DETAILS

 

Analysis Done by :

NIY

 

 

Report Prepared by :

KET

                                                


 

RATING EXPLANATIONS

 

Credit Rating

Explanation

Rating Comments

A++

Minimum Risk

Business dealings permissible with minimum risk of default

A+

Low Risk

Business dealings permissible with low risk of default

A

Acceptable Risk

Business dealings permissible with moderate risk of default

B

Medium Risk

Business dealings permissible on a regular monitoring basis

C

Medium High Risk

Business dealings permissible preferably on secured basis

D

High Risk

Business dealing not recommended or on secured terms only

NB

New Business

No recommendation can be done due to business in infancy stage

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)

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

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