Darma Henwa focuses on equipment refurbishment

By Tri Subhki R

Petromindo|Boim

IDX-listed integrated coal mining services company PT Darma Henwa Tbk is focusing on heavy equipment refurbishment as the company aims to significantly increase production volume in 2018.

The planned sharp increase in production volume, both overburden removal and coal getting, is requested by the company?s existing coal clients.

Darma Henwa is estimated to produce 87.5 million bank cubic meters (bcm) of overburden and 12.8 million tons of coal in 2017. In 2018, the company expects to produce 183.4 million bcm of overburden and 22.3 million tons of coal.

?Our strategy is refurbishing the existing heavy equipment that can be utilized by procuring spare parts, components and tires,? Darma Henwa?s Corporate Secretary & Chief Corporate Services Officer Mukson Arif Rosyidi, said on Friday.

Of the planned total capital expenditure for 2018 of as much as US$93.8 million, most will be spent to purchase components for the refurbishment. ?The purchase of components will be $81.8 million and tires will be $8.7 million,? he said. Darma Henwa sets six-fold increase of capital expenditure for next year compared to $14.18 million in 2017.

Agus Efendi, Director of Darma Henwa, said that the utilization of heavy equipment is 63 percent and the company is undergoing refurbishment to improve its physical availability (PA) and effective working hour (EWH) of heavy equipment. ?Of course we want to buy new heavy equipment but as of now it is so difficult to order new units, particularly from well-known brands,? he said.

Faisal Firdaus, President Director of PT Darma Henwa Tbk, added that procuring new heavy equipment will take about 10 months to be realized. ?If we wait for the new heavy equipment, we will miss the momentum. So, our best strategy is refurbishment that will restore the PA up to 90 percent,? he said.

Darma Henwa will increase overburden fleet in Bengalon Coal Project (owned by coal miner PT Kaltim Prima Coal) from 15 fleets to 18 fleets, from 12 fleets to 16 fleets in Asam Asam Coal Project (PT Arutmin Indonesia) and from 3 fleets to 14 fleets in Satui Coal Project (PT Citra Langit Sejahtera).

Editing by Reiner Simanjuntak