Based on Article 3 of the Company’s Articles of Association of which the amendment already approved at the Extraordinary General Meeting of Shareholders (EGMS) dated May 5, 2015, the Company’s intention and objectives are to engage in industry, trading, transportation, representative and/or agency, contractor, and services.
To achieve these objectives, the Company conducts the following business activities:
Main Business Activities
- Conducting trading and distribution in the chemical industry sector;
- Running general trading, particularly for chemicals, and petroleum and gas, including the import and export markets, local and inter-island , either trading on its own behalf, or based on commission, or on other party’s account, as well as acting as supplier, wholesaler and distributor;
- Running a transportation business (including for its own use by owning and operating land and sea transportation and pipelines for sea transportation), warehouses and tank rental including workshops, expedition and packaging;
- Conducting business development for its own and other parties’ asset management, either directly or through investments, or Company capital divestment in other companies; and
- Running a building contractor business including architecture, planning, supervision, for tanks, buildings, bridges, docks, roads, and irrigation as well as general civil works;
Supporting Business Activities
- Running a business and acting as a representative and/or agency on behalf of other companies both domestically and internationally;
- Running a building contractor business including architecture, planning, supervision, for tanks, buildings, bridges, docks, roads, and irrigation as well as general civil works; and
- Running a rental business and other services, excluding legal services.
The Company’s business activities are as follows:
- Trading and Distribution
- Logistic Services
- Manufacturing
- Industrial Estate and Utilities
TRADING AND DISTRIBUTION
The trading and distribution segment is the main pillar of the Company’s business. In this segment, the Company focuses on two main products, namely Petroleum products and basic chemicals.
industrial Petroleum The Company has developed its non-subsidized fuel distribution business since 2005, and since then has continuously expanded its logistics network facilities for fuel distribution to customers, especially to serve customers in commercial, industrial, mining, power plants, bunker, etc. The Company has tank terminal facilities in
several locations in Indonesia with a total capacity reaching 734,000 KL.
One of the Company’s strengths in this business is the Company’s reliable supply chain management, ensuring the capacity, quality and on time fuel distribution to its customers in Indonesia. This is also supported by operation of the Company’s shipping vessels comprising tankers, barges and Self-Propelled Oil Barges/SPOB to distribute through sea or river. The Company vessels are especially designed to deliver fuel in shallow waters up to 2.7m in regions in Kalimantan. The company also has a fleet of over 300 trucks to deliver products across Indonesia.
Since end August 2018, Ministry of Energy and Mineral Resources announced the mandatory use of Biodiesel (B20 policy) for all industrial and transportation users with limited exceptions. AKR received the largest quota of FAME (Fatty Acid Methyl Ester) for blending amongst private companies.
Retail Petroleum The capacity and experience of the Company in distributing non-subsidized fuel made the Company gained the trust of BPH Migas to distribute subsidized fuel since 2010 through the Motorized Vehicle Refueling Station (SPBKB) and the Fisherman Filling Station (SPBN) with AKR brand. By the end of 2018, the number of outlet stations owned by the Company had reached 135 in various parts of Indonesia, including Sumatera, Java-Bali, and Kalimantan.
In 2018, the Company received allocation of subsidized fuel distribution in the amount of 250,000 Kl from BPH Migas and The Company is appointed as Business Entity Executive of P3JBT for 5 years. AKR is also participating in the program of one price policy in area of 3T (The most Underdeveloped, The Frontest, and The Outermost)
With a well-organized terminal network and large transportation fleet, the Company can carry out such trust well and strengthen the Company’s position as one of the main players in the BBM distribution business.
In April 2017, the Company announced the signing of a retail joint venture in Indonesia with BP. The Joint Venture formed a company called PT Aneka Petroindo Raya, which operates under the name “BP AKR Fuels Retail”. In an exclusive agreement, both parties intend to develop and offer different experiences to consumers by leveraging the capabilities and expertise of BP and AKR in the emerging retail market in Indonesia. Two Petrol stations of BP-AKR opened in 2018, and plan to open more petrol station in Indonesia going forward. The retail sector will be a future growth factor for the fuel segment.
Basic Chemicals
AKR is the principal distributor for Asahimas Chemicals, and has distributed basic chemicals such as chloroalkali, solvents, organic and non-organic chemicals from its establishment in the 1960s. The Company also trades and distributes chemicals obtaining supplies from domestic and foreign suppliers. To support its business, in 1970, the Company built its first tank terminal in Indonesia. This innovation was one factor that helped the Company become a chemical distributor company with the largest market share in Indonesia.
Besides having adequate infrastructure, the Company also has strength in terms of its supply chain and integrated logistics. The combination of the infrastructure and the capability logistics supply chain lead to the Company gaining trust from various industries in Indonesia who need basic chemicals, such as industrial consumer goods, textiles, glass, etc.
Lubricant
The Company conducts business in the field of trading and distribution of lubricants for the industrial, marine, mining and commercial vehicles sectors with the Castrol brand.
LOGISTIC SERVICES
The Company has a complete and integrated logistics infrastructure, from warehouses, storage tanks, ships to trucks in Indonesia. Therefore, the Company can offer efficient logistics and distribution infrastructure solutions to third parties, by providing effective and reliable bulk cargo management services in major ports in Indonesia.
The Company, through its subsidiary, PT AKR Transportasi Indonesia, provide land transportation services to support its logistics and distribution services. The Company continues to develop the infrastructure that is needed to receive, store, and transport a variety of products in the ports.
vendor Managed inventory
The Company offers Vendor Managed Inventory (VMI) systems to its major customers. The Company manages the petroleum inventory at its customers’ premises, so that they will only need to pay for how much they use. In return, the Company will ensure availability and efficiency through inventory management for these customers. VMI is the Company’s commitment to deliver added value to customers.
MANUFACTURING
The Company’s manufacturing segment is currently an adhesive product manufactured by the Company’s subsidiary, PT Arjuna Utama Kimia (Aruki) in Surabaya, East Java. Aruki supplies adhesive to various companies in the wood and paper industry in Indonesia.
JAVA INTEGRATED INDUSTRIAL AND PORT ESTATE (JIIPE)
As a part of its expansion strategy, AKR is currently developing the Java Integrated Industrial and Port Estate (“JIIPE”) located in Gresik in East Java, with the objective of providing logistics and energy solutions to industrial customers. JIIPE features a deep seaport integrated with a large industrial estate with good interconnectivity to the fast-growing province of East Java. With a total area of around 3,000 hectares, the project will be one of the largest integrated industrial and port estates in Indonesia. The total area under development is 1,761 hectares of land for the industrial estate, 406 hectares of land for the Sea Port and 800 hectares of residential and commercial space being developed by affiliat
industrial estate
JIIPE industrial estate area covering 1,761 hectares is located in Gresik with excellent conectivity, accsess to deep water port and conectivity to hinterland. The industrial estate provides complete utilities and facilities. This area is strategically located and has the potential to become a trade center and manufacturing center for Indonesia and the Asia Pacific.
Grouping of light-medium-heavy industries is well planned to and the internal road access infrastructure is well plan to facilitate smooth operation.
Logistics costs for incoming raw materials and distribution of finished goods will be competitive by the utilization of modes of sea and land connectivity (deep sea ports, railways, toll roads). JIIPE has a toll connectivity to Surabaya as the second largest city in Indonesia, as well as planned direct toll connection and rail connection to the double track railway network that has access to points in Java.
The JIIPE industrial estate is facilitated by an international standard road system, direct piping connections, one-gate processing system, and 3-hour investment licensing services that make it easy to do business.
- Power plant Gas and coal power plants use the combine cycle system for flexibility, low emissions, minimizing environmental impacts and optimal solutions. The 1 – 3 x 7.65 MW dual fuel power plant is supplied by Wartsila and the Finnish EPC. It is located in Block E.
- Gas Industrial Gas is supplied through pipelines to Powerplant and tenants within JIIPE. Phase 1 – Zone E (6 “), Daendels to Underpass Road (16”) and natural gas pipeline Jalan Daendels (24 “).
- Water Treatment Plant JIIPE provides industrial water with the best equipment, systems and services to improve the reliability of your operations, reduce your production costs and support environmental compliance by: PHASE 1 – Groundwater Tank (GWT) capacity of 1,000 m3. 7 water reservoirs with a total of 42 ha as well as being rainwater collection.
- Waste Treatment Plant PHASE 1 – Industrial Wastewater Treatment (WWTP) with 2,500 m3 per day. Waste water collection pipe is in Block E.
- Port JIIPE port is planned to be an integrated deep sea port of 406 ha which is strategically located in the Madura Strait. In the first stage, 85 Ha port development has been completed with dock length of 6,200 m, dock water depth: -7.00 LWS; -11.00 LWS; -14.00 LWS, – 16.00 LWS, the port handling vessels up to 100,000 DWT and parts of the larger Surabaya port district. The port development shall include Energy Terminals (coal, Oil & GAS, and LNG), storage grounds, storage yard and Cold Storage facilities, and an efficient and simple customs procedure process. This port has been operating since late 2016 and has been serving Freight, Dry Bulk, Container, General Cargo, Car/ vehicle, Container, Multipurpose Fishing Industry, Liquid and Gas.
