Adaro acquires barging, shiploading firm
Monday, May 4 2009 - 03:13 PM WIB
With the acquisition of OML, Adaro Energy will own a part of each of the critical pieces of its coal supply chain, which will reduce costs, lower risks, increase flexibility of production, increase control of transportation, and improve reliability, the company said.
The acquisition was made by PT Jasapower Indonesia (JPI), which is 99.99% owned by Adaro Energy?s wholly-owned subsidiary PT Alam Tri Abadi. The acquisition was closed on April 30th, 2009.
President Director Garibaldi Thohir said, ?With the acquisition of OML, we can deliver on our stated strategy to create value, to improve our business by further integration and to strengthen our coal supply chain. We will have better control of the supply chain and less counter party risk.?
? Adaro Energy feels the size of its operation requires it to own more of its supply chain. While growth was achieved in the past using contractors, as production has increased every year since operations began up to the 38.5 million tonnes of 2008, to continue this pace of growth Adaro needs to continue to integrate and control a portion of the barging and ship loading.?
By bringing OML into the group, Adaro Energy can benefit from cost savings associated with better control over demurrage, the company said.
Adaro?s current barging capacity is around 50 million tonnes, with the use of approximately 70 barge sets (barge and tug). Adaro Energy?s largest barging and ship loading contractor will provide for approximately 50% of Adaro?s 2009 requirements. OML is currently the second largest provider of barging and ship loading services to Adaro Energy, providing for approximately 25% of Adaro 2009 requirements.
Adaro does not have a buffer stockpile at the Taboneo anchorage with the closest being the stockpile at the Kelanis barge loading facility. Adaro therefore uses its barge fleet as floating storage to help buffer normal monthly fluctuations in shipment tonnages, which helps to minimize demurrage. However, by having a controlledentity that would be able to react promptly to market conditions, Adaro Energy can create cost savings.
In the next five years Adaro will expand production to 80 million tones per year which will require a major increase in barging and transshipment capacity. Adaro will continue to tender out for a percentage of this tonnage however having access to internal costs of a barging and transshipment company will help Adaro minimize its rates going forward with potential cost savings, it added.
Adaro currently operates Indonesia largest single pit coal mine from a 3.5 billion tonne deposit (JORC-compliant estimate). (alex)