Interview: PPA focuses on quality rather than quantity

By Tri Subhki R

PT Putra Perkasa Abadi (PPA) is on track to realize its overburden removal volume target this year of 225 million bank cubic meters from seven projects, and is striving to become Indonesia’s top three coal mining contractors.

However, Christianto Setyo, President Director of PPA, stated that the company focuses on the quality rather than quantity. PPA is committed to delivering quality mining operations by implementing its motto: "Safe and Strong Operational Performance".

Petromindo.com discussed with Christianto regarding the current condition of coal mining industry in Indonesia both in terms of opportunities and challenges which PPA has to deal with.  The excerpts are as follows.

Petromindo: How is the outlook of coal mining industry in 2019?

Christianto: In 2019, regarding regulation, the government has set (lower) production quota limit from 530 million tons in 2018 to 480 tons in 2019. The government also decides the coal Domestic Market Obligation (DMO) at 25 percent (of production). In China, the government limits the coal imports.

In terms of market price (outlook), coal prices are expected to be stable, supported by those restrictive policies. The prices may be depressed, but would not drop drastically.

P: Now, we talk about PPA. Please elaborate about your current projects and will there be new project this year?

C: We achieved 155 million back cubic meters (BCM) of overburden removal in 2018, and we set a target 225 million BCM in 2019 from seven job sites and there is one potential additional job site.

However, we are now consolidating by avoiding to have too many additional projects. By considering the coal market condition with the restrictive regulations, we are improving the quality of all mining aspects rather than quantity in order to sustain (the business).

Currently, we are operating in seven job sites (at mines owned by) PT Borneo Indobara, PT Alamjaya Bara Pratama, PT Multi Harapan Utama, PT Adimitra Baratama Nusantara, PT Rantaupanjang Utama Bhakti, PT Kaltim Jaya Bara, and PT Borneo Olah Sarana Sukses Tbk.

There is one potential (additional) project in Central Kalimantan, at a coal mine belonging to Sinar Mas Group, the output of which will be used to fuel a coal-fired power plant.

P: And how about the challenges in 2019?

C: PPA is a mining contractor whose core business is service. The biggest asset of a service company is manpower. So, human management is the biggest challenge. Now, we employ almost 6,000 people.

In order to sustain in the mining industry, we keep improving our quality of good mining practices, quality of services and quality of manpower. We aim to achieve zero accident. So far, our safety index is good and we want to keep it that way.

P: Can you describe further about the quality as you mentioned?

C: By conducting good mining practices, we provide quality of product and best value for the customers and shareholders. We also prioritize customer satisfaction and benefit to all stakeholders, including banking, leasing companies, suppliers, shareholders and employees. Above all, we provide good safety performance.

P: What is your initiative to improve those qualities?

C: We invest quite a lot to create quality of manpower, starting from the recruitment. We also have in-house PPA Academy to develop and train our own manpower, including operators, mechanics and managers.

P: Do you have strategic business plan in the future, such as mine acquisition or IPO (Initial Public Offering)?

C: We have some discussions about potential mine acquisitions, but so far we are reviewing it. For IPO, we also have plan for IPO but we cannot disclose the due date. But we are on track to go there, but not in the near future. 

Editing by Reiner Simanjuntak