IKT/IPCC Direction Board (L-R) : Operation Director Andi Hamdani, Business Development Director Agus Hendrianto, President Director Rio Theodore Natalianto Lasse, and Finance and HR Director Feri Irawan
The automotive industry has been recovering, giving a positive impact to car terminal operator Indonesia Kendaraan Terminal IKT (IPCC). In responding this momentum and to optimize market potencies after Pelindo merger, IKT will take some key strategies.
Amid pandemic Covid-19 outbreak, the automotive industry market dropped significantly last year (2020). According to Gakindo (Association of Indonesian Automotive Manufacturers) data, the national automotive production (CBU/completely built up) last year (2020) dropped 43.97%, to 551,426 units, from 1,045,666 units in 2019.
This results in a drop of IKT’s volume during the year. IKT suffered 23.17% volume drop during the year, from 450,826 units (2019) to 351,141 units (2020), or more than 63.68% of total national production. The IKT export also dropped in 2020, by more than 29,78%.
“We all know that the pandemic outbreak has disrupted economic activities along the year (2020), including in automotive industry. The pandemic outbreak has triggered lower production of national automotive, finally resulting in the lower production of IKT,” IKT/IPCC President Director Rio Theodore Natalianto Lasse explained to Press Gathering (Bali, November 19).
“But, this year (2021), recovery has been going on, proven by the increasing volume by both, the automotive industry and the terminal (IKT),” Rio explained further.
According to data, the national automotive industry production in the first nine-months (9M) had increased very significantly, to 630,709 units, from 389,724 units in the same period last year (9M2020). IKT volume, meanwhile, increased by 44.93%, from 235,182 units in 9M2020 to 377,846 in 9M2021. This is equivalent to 59.91% of total national production.
“IKT /IPCC has been the choice of Indonesia’s CBU export,” added Rio, but affirmed that some CBUs are exported via container services.
Back in Black
The significant recovery in volume during the first nine months has made IKT’s financial statement ‘back in black’, from ‘red record’ last year. IKT has reported a positive financial statement from negative last year.
Until September this year, IKT has booked Rp347.77 billion revenue, higher than Rp249.23 billion reached in the same period last year (9M2020). IKT also created Rp16.60 billion net profit until September, compared to loss last year (2020). In the same period last year, IKT suffered net loss of Rp 32.73 billion.
In addition to the higher revenue, IKT’s positive net income until September, was also contributed by appropriate cost management strategy. “Our cost growth is lower than revenue growth, thanks to appropriate cost management strategy,” commends IKT/IPCC Finance and HR Director Feri Irawan.
But, there are some factors that make the cost increase during the period, including the partnership cost increase in line with the amount of car volume handled by IKT; the increasing depreciation cost; the cost for provision for impairment as the impact of PSAK 71; payment of PBB (land and building tax); and additional expenses due to the interest of leased assets.
“Though there was increase in cost, but in total, IKT/IPCC still booked positive net income, thanks to the revenue that grew higher than cost,” said Feri.
Feri is very optimistic that the company’s performance this year will be much better than last year in view of the terminal higher productivity. He expects the trend will continue until next year (2022).
IKT, said Rio and Feri, would distribute dividends to shareholders this year, after this company failed to do it last year as it suffered loss.
“I believe that in 2021 as long as we are profitable, we will pay dividends,” said Rio.
Prospects from Industry Growth, Wider Coverage
In addition to the recovery of the automotive industry, another momentum that will give prospects and opportunities for IKT is the merger of state port operators PT Pelindo I-IV into one, PT. Pelindo. The merger gives a wider business coverage to all Pelindo subsidiaries, including IKT.
“The market will be more and more promising, thanks to the efforts of some automakers to increase their production in this country and to our wider operation coverage following the merger policy of our parent company (Pelindo),” said Agus Hendrianto, IKT/IPCC Business Development Director.
Automaker Hyundai, Agus explained, has significantly increased investment in Indonesia by building new plant in Cikarang (Delta Mas). In addition, Hyundai plans to relocate their operation base for Asia Pacific to Indonesia.
“IKT has started to provide the services in loading unloading of Hyundai Glovis Shipping Line since early this year (2021),” said Agus, adding that IKT has also extended cooperation with other automakers, creating a more and more prospective market for IKT.
Agus also sees other prospects from the government’ supports for electric vehicles (EV) manufacturing. The establishment of EV manufacturing, noted Agus, would automatically increase numbers of automotive production, thus increasing the trade numbers.
“When the production is getting increase, the number of trades will automatically increase. And, this will give us a good prospect for market expansion,” said Agus.
Another prospect that will help IKT, according to Agus, is coming from the bounce-back of the increasing activities of infrastructure projects and industry recovery. These increasing activities create a higher demand of heavy equipment. “Noted that IKT is handling cargo of heavy equipment,” Agus said.
Rio and Agus confirmed that the merger of Pelindo will give IKT a wider market prospect. “The merger will support us to extend our business coverage to all Pelindo’s ports nationwide. This is a very prospective market,” added Rio.
In addition to these captive markets (Pelindo ports), IKT also sees another prospect from other ports, including from the new Patimban Port.
Improve Service, Intensify Cooperation
In optimizing those business prospects, IKT will take some key steps in improving operational service, increasing market potencies, and expanding business coverage.
In improving the operational service and anticipating the increasing market, IKT/IPCC Operation Director Andi Hamdani explained some steps the IKT had taken and would take. The steps include the expansion of yard, provision of supporting facilities like charging stations in the terminal area to support the handling of EV, and acceleration of digital transformation in car terminal.
“What we have done in operation to support better service include terminal (yard) expansion, provision of supporting facilities, and digital transformation,” said Andi.
He named some activities that have been done since last year (2020), including implementation of integrated auto gate system, fully implementation of INTAPPS application, and terminal expansion under concept of logistics value chain ecosystem.
“We will continue to do improvement in services through those steps,” he said.
Meanwhile, in optimizing the market coverage following the Pelindo merger, IKT will intensify cooperation with Pelindo Branch Ports.
As the report have said, the merger has integrated as many as 95 branch ports nationwide. The merger also opens opportunities for all Pelindo subsidiaries, including IKT, to do business at those ports.
“It is true merger will widen our business coverage. Of course, this a very potential market for IKT. But, we need appropriate strategy. Surely, we will do expansion to those ports step by step, starting with the ports with high volume in automotive delivery,” said Rio.
IKT has started it with Belawan Port. On November 16, 2021, IKT and Belawan Port signed MoU on the operation of car terminal in Belawan under revenue sharing mechanism.
IKT plans to do similar framework with other Pelindo ports nationwide. “Soon, we will also do similar framework with Port of Tanjung Perak Surabaya and Port of Makassar. We have taken some surveys on the exiting operation model and the market of these two ports. We will soon handle them,” said Rio.
In addition to these Pelindo Ports, IKT is also open to build cooperation in the operation of Patimban Port. “We have actually been involved in testing of CBU prime export in Patimban. We are open for the cooperation in the future,” said Rio.