DEVELOPING SENA
AS AN INSPECTION AND CERTIFICATION
SERVICE PROVIDER
GROUP FIELD PROJECT
By:
Jernih Debora Sinaga (162210047)
Selo Purna Atmani (162210065)
Sondang Aryanto (162210066)
Academic Supervisor:
Sony W. Antonio, S.T, M.M
MASTER OF MANAGEMENT PROGRAM
IPMI BUSINESS SCHOOL
JAKARTA
2017
DEVELOPING SENA
AS AN INSPECTION AND CERTIFICATION
SERVICE PROVIDER
GROUP FIELD PROJECT
By:
Jernih Debora Sinaga (162210047)
Selo Purna Atmani (162210065)
Sondang Aryanto (162210066)
Academic Supervisor:
Sony W. Antonio, S.T, M.M
MASTER OF MANAGEMENT PROGRAM
IPMI BUSINESS SCHOOL
JAKARTA
2017
DEVELOPING SENA
AS AN INSPECTION AND CERTIFICATION
SERVICE PROVIDER
Prepared by:
Jernih Debora Sinaga (162210047)
Selo Purna Atmani (162210065)
Sondang Aryanto (162210066)
A GFP
Submitted in a partial fulfillment of the requirements for the degree of
Master in Business Administration (MBA)
iii
Table of Content
Certificate of Approval………………………………………………………... i
Non-Plagiarism Declaration.………………………………………………….. ii
Table of Content………………………………………………………………. iii
List of Figures………………………………………………………………… v
List of Tables………………………………………………………………….. vi
Acknowledgement……………………………………….................................. vii
Executive Summary…………………………………………………………... viii
Chapter 1: Introduction………………………………………………………... 1
1.1. Industry Background.……………………………………………………... 1
1.2. Company Background…………………………………………………….. 3
1.3. Problem Background……………………………………………………… 11
Chapter 2: Literature Review …………………………………………………. 13
2.1. The Micro Environment…………………………………………………… 13
2.2. The Macro Environment…………………………………………………… 16
2.3. SWOT and TOWS Analysis………………………………………………. 20
2.4. Industry Competitiveness………………………………………………….. 23
2.5. Identifying The market Segmentation, Targeting and Positioning……….... 27
2.6. Competitive Advantage, Competitive Strategy and Company Value……… 30
2.7. Business Expansion………………………………………………………… 31
2.8. Risk Management………………………………………………………….. 33
iv
2.9. MIGAS Certification………………………………………………………. 37
2.10. The Marketing Mix – 7Ps plus Technology Framework…………………. 40
2.11. Financial Analysis………………………………………………………… 43
Chapter 3: Methodology………………………………………………………. . 48
3.1. Method of Study…………………………………………………………… 48
3.2. Research Design…………………………………………………………… 49
Chapter 4: Findings, Analysis and Discussions………………………………… 38
4.1. Feasibility Study in 7 Aspects……………………………………………… 51
4.2. TOWS Analysis……………………………………………………………. 59
4.3. Financial Analysis………………………………………………………….. 63
Chapter 5: Conclusions and Recommendations……………………………….. 69
5.1. Conclusions……………………………………………………………….. 69
5.2. Recommendations………………………………………………………… 70
References and Bibliography………………………………………………….. 71
Appendix
v
List of Figures
Figure 2.1 The Macro Environment…………………………………………... 17
Figure 2.2 A Potential Framework For a SWOT Analysis……………………. 21
Figure 2.3 TOWS Strategic Alternatives Matrix……………………………… 22
Figure 2.4 Forces Driving Industry Competition.……………………………. 24
Figure 2.5 Four Basic Process to Choose Target Market……………………… 27
Figure 2.6 The 7 Ps Framework ………………………………………………. 40
Figure 3.1 Research Design Process ………………………………………….. 50
Figure 4.1 Risk Heat Map …………….……………........................................ 58
Figure 4.2 TOWS Matrix………….…………….............................................. 60
Figure 4.3 Return on Investment ………........................................................... 66
Figure 4.4 Return on Equity ……….…………….............................................. 67
Figure 4.5 Sales………….…………….............................................................. 67
vi
List of Tables
Table 2.1 Types of Competition…………………………………………....... 15
Table 2.2 Level of Competition……………………………………………… 16
Table 4.1 Risk Identification and Mitigation Plan …....................................... 57
Table 4.2 Volume Projection ………….……………....................................... 68
vii
Acknowledgement
First of all we would like to thank to our merciful God the almighty because without
His blessings, we would never finish our Group Field Project (GFP), Developing
SENA as an Inspection and Certification Service Provider.
This GFP also would not have been possible without the financial support of our
company PT Perusahaan Gas Negara (Persero) Tbk especially from Board of
Directors, Human Capital Management Division and our own Division /
Department / Subsidiaries. We are especially indebted to Mr Jeffry H Simanjuntak
PT Solusi Energy Nusantara (SENA) (PT PGAS Solution Subsidiaries), all partners
in PT PGAS Solution (PT PGN (Persero) Tbk Subsidiaries), Mrs Amanarita
Performance and Portfolio Management Group Head (PT PGN (Persero) Tbk),
Mr Arief Yandi Putra Jaya (PT PJ-Tek Mandiri) as our Mentor and Subject Matter
Experts that give guidance and data for completing the GFP and makes it perfect.
We are grateful to all of those whom we had the pleasure working during this project
such as Mr Feraldi W Loeis and Mr. Sony W Antonio as our advisor, teacher and
also mentor in Management Development Program, Mr Bambang Gunawan and
Mr Roy Sembel as the academic supervisor and also the Dean of IPMI, all IPMI
lectures, IPMI admin academic and all the people that directly or indirectly
involved in Program PGN-IPMI International Business School, Hotman Zainal
Arifin (HZA) Training Consultant, All member of Lebah Menyengat Group, Miss
Nita Widyasymanti and Mr. Imron that contribute a lot in analyzing and designing
our GFP
Finally nobody has more important to us in the pursuit of this GFP than our beloved
family who are the most important and supportive person that keep encouraging
and provide unending inspiration for us to finish all the assignment in Executive
Master of Business and Administration Program until now.
Thank You.
viii
Executive Summary
Delivering reliable engineering solution in oil and gas industry not only one of
SENA objectives in order to become more existence in engineering industry. Being
sustain, increasing profit and market share, reducing cost from doing this inspection
and certification by PGN Group itself, in terms of work safety inspection in PGN
activities are another additional objective why this projection is being proposed.
Feasibility studies has been done by considering in 7 (seven) aspects among others:
Operational, Legal, Technical, Competitors, Environment-Social & Risk, Market
and Financial Aspect. Assumptions in financial aspect is considering with current
situation. TOWS analysis regarding internal and external condition has been done
in order to set up the strategies to strengthen the weaknesses and catch up the
opportunities for sustainability growth of company. The outcomes through did
some analysis shown that this project is profitable, attractive and related to the
objective of company simultaneously in complying with regulations in oil and gas
activities.
This project is feasible to do while doesn’t need any significant capital and
infrastructure in operate it. Company able to use SO Strategies, ST Strategies and
also WO strategies to obtain market share in Indonesia and generate profit growth
for the company. It will not only impacting to the sustainability of SENA but also
positive corporate value for PGN.
Hire experience and competence expert as a pipeline and equipment inspector able
to do if it is needed. Manpower planning program including people development
must be set up before operated this business. Build relationship and networking
with regulator and other parties should be maintain. Placing educated technician to
each customers, delivery and excellent service could be value added and makes
SENA more attractive than other competitors.
1
CHAPTER 1
INTRODUCTION
1.1. Industry Background
Oil and gas are important sectors for human life. In addition to national wide
development both in terms of fulfilment of energy needs such as fuel vehicles
and in the country, as well as the country’s foreign exchange earners. Natural
gas is also considered an alternative energy to replacing air and wind as a power
plant.
According to The World Bank, Indonesia is undergoing a historic
transformation from a rural to an urban economy, with growing rate about
4,1% per year. By 2025, Indonesia can expect to have 68% of its population
living in urban areas. Much of that population will be young and middle class-
increasing the demand for electricity and stimulating growth for business and
industry. This energy requirement could be a golden opportunity for PGN who
has experience operating gas network to serve more than 1.500 Commercial
Customers and 2.081 Industrial-Manufacture Customers, and as a supporting
to the Indonesia government in country growth in using natural gas. With
expanding infrastructure, engineering expertise, deep industry experience and
proven capabilities in the upstream, midstream and downstream sectors, PGN
is best qualified to energize Indonesia’s future.
As a State-Owned Enterprise that engages in the natural gas downstream
business, PGN conducts its business activities in the areas of natural gas
transportation and trading. PGN provide an integrated natural gas
infrastructures to support natural gas trading and ensure the quality of the
natural gas (natural gas composition, pressure, temperature) and the service
(customers contacts, disruption handling) that PGN serve for their customer.
2
PGN divided its business activities into 4 (four) principal business segments,
which are:
1. Natural gas transmission businesses
2. Natural gas trading business
3. Natural gas and oil business
4. Other businesses, i.e. telecommunication, services, constructions and
maintenance of pipeline networks, building management, and financial
lease align with the company’s business strategy.
PGN has grown into a natural gas provider with an integrated infrastructures
that provides the most complete solution in the market. The establishment of
Subsidiaries was intended for supporting the core business and strengthening
the Company’s position in the efforts to increase the domestic natural gas
utilization. One of PGN Subsidiary that currently engages in Operation &
Maintenance Services, Engineering Services, Engineering Procurement and
Construction Services as well as Trading Services is PT PGAS Solution. To
be more competent in engineering field of oil and natural gas, PGAS Solution
has established a new subsidiary which is call as PT Solusi Energi Nusantara
(SENA).
Seeing the importance of oil and gas to human life, it should be able to manage
optimally, especially in terms of facilities and natural gas pipeline. With the
expansion of oil and gas activities, as well as geothermal resources utilizing
high technology, safety and environmental protection by conducting safety
checks on installation, equipment and techniques that used in order to protect
labour, installations, equipment, facilities and networks as well as security of
oil, natural gas and geothermal resources is needed. As has been set out in
Regulation of Minister of Mines and Energy No.: 06 P/0746/M.PE/1991.
Hence to minimize risks and to support the operation of oil and so that the
installation, equipment and techniques used in oil and gas mining operations
must be carried out safety inspection.
3
The safety inspection shall be carried out by the Head of the Mine Inspection
Inspector and the Mining Inspector of the Directorate General of Oil and Gas,
who shall meet the requirement of expertise and theoretically expert in oil and
gas and have sufficient experience. This regulation give the opportunities for
other eligible parties to assist in the conduct of safety inspections. After having
safety inspection, the Director General shall issue a Feasibility Certificate of
use of the installation, equipment and techniques used.
Accordance to the above conditions, it could be an opportunity as a new
business for PGN to participate as a partner who assist the Directorate General
to perform the implementation of safety inspection. In addition to having
technical expertise, industry experience, competent resources and certified
pipeline inspectors, and proven capabilities in the upstream, midstream and
downstream sectors, PGN has become more capable to run the business.
1.2. Company Background
The operator who able to run this business can be submitted to one of PGN
Group which is PT Solusi Energy Nusantara (SENA) – subsidiary of PT PGAS
Solution, that already in line with the scope of work of PT SENA in services
provided include the survey, technical research, Front End Engineering Design
(FEED) and Detail Engineering Design (DED), Project Management
consultancy, inspection and technical testing, commissioning, as well as other
post-operating works. Below detail information about PGAS Solution and
SENA company background.
1.2.1. PT PGAS Solution
PT PGAS Solution was established on 06 August 2009. The Company
started its journey as Engineering Division of PT Perusahaan Gas
Negara (Persero), Tbk. Experience gained through the Engineering
Division has given courage to continue expand the work within the
engineering field of natural gas, by establishing a new subsidiary
company.
4
1. Vision
Reliable Partner Solution in Energy Infrastructure
2. Mission
a. Providing innovative solution with: Strong Resources, Wide
Networking, GCG to increase Share Holder Value through
Growth and Profitable.
b. Bring company with proud to be a winner in future competition
Core Business of PT PGAS Solution :
1. Engineering :
a. Detail Engineering Design
Perform Detailed Engineering Design work with the following
scope of competence:
i. Conduct preparation surveys, covering:
Topography survey
Soil investigation
Marine survey, etc.
ii. Develop specifications for planning and construction
Perform engineering analysis
Develop a detailed picture of planning and work
Create calculation for required materials (Material
Take Off).
b. Marine Radar Surveillance
Marine Radar Surveillance is one of the works of PGAS
Solution which aims to ensure that no potential disruption on
the existing offshore gas pipelines, caused by ships at anchor
within the vicinity. Offshore gas pipeline network has a very
critical safety risks, especially due to the potential disruption of
shipping. Hence, preventive measures are required to maintain
the safety of offshore gas pipeline network. We conduct
5
thorough measure, starting from the installation of marine radar
devices to application of marine radar surveillance software.
Therefore some of the scope of the work we do to support the
achievements of these terms are:
i. Monitor the offshore pipeline network through the control
room
ii. Perform routine daily and monthly patrols within radar
monitoring areas
iii. Coordinate with The Indonesian Navy, Indonesian Sea and
Coast Guard, Water Police Force, The Head of Port, etc to
ensure safety
iv. Perform prevention of marine accidents around offshore
pipelines.
c. Survey Detail
Construction of PGN pipeline network requires careful
planning, considering pipes will be installed on tracks along
roadsides with heavy traffic (where other existing utilities have
already been embedded, such as power cable, fiber optic, water
pipes, etc.), crossings (such as rivers, wetlands, roads and
railways), and densely populated residential areas as well as
industrial areas. Thus, PT. PGAS Solution conducts aerial
photographs, which one of the reasons is to be able to see the
real situation of the ground.
Utilization of aerial photo/map image as a base map in the
handling of the planning work is particularly useful since it is
able to show detailed phenomenon that exist in the field
(buildings, body surface water, vegetation, manmade
infrastructure, etc.) in a visualization similar to the original,
hence interpretation of objects associated with the planned
6
pipeline will be more easily carried out and analyzed on tracks
planned for installation of pipes to determine the topography.
2. Trading :
Since 2013, PGAS Solution has partnered with Armatury, a
company from Czech Republic and the world's biggest valve
manufacturer company. In 204, PT. PGAS Solution won the
"Reliable Partner" award for South East Asia region. Products that
PGAS Solutions purchase are valve class 150, 300, 600, 900. Apart
from purchasing to fulfill pipeline network construction needs,
PGAS Solution also resells the products to third parties.
RELIANCE SCADA - GEOVAP
PGAS Solution is licensed to sell Reliance - Scada products from
Geovap, an IT company from Czech Republic. SCADA is short for
Supervisory Control And Data Acquisition, computer-based
industrial control system used for controlling a process. This
process can be categorized into 3 sectors, which are:
i. Industrial proses: manufacture, plant factory, production,
electric power generator
ii. Infrastructure process: drinking water purification and
distribution, sewage treatment, gas and oil pipelines, power
distribution, complex communication systems, early warning
systems and sirens
iii. Facility process: buildings, airports, ports and harbors, space
station
3. EPC
a. Development of City Gas Network
PT PGAS Solution is trusted by PGN to carry out the
development of city gas network in order to expand the
utilization of natural gas for the public. We perform
7
construction work for city gas network, both on-shore and
offshore cross-islands. In addition to meet customer demand,
the addition of natural gas pipelines is also able to support
transport sector, commercial and industrial sectors. Therefore,
more parties will benefit from this environmentally friendly
energy. PGAS Solution is committed to continue support the
Government in providing natural gas infrastructure, all through
to the country.
b. Fuel Station
PT PGAS Solution provide good energy that can be beneficial
for the transportation sector. PT PGAS Solution assist the
Government in accelerating infrastructure Natural Gas
Utilization so that the conversion program of CNG fuel can be
realized immediately.
Fuel stations that have been built:
i. Pondok Ungu Fuel Station
ii. Bogor Fuel Station
iii. PGN Head Quarter Fuel Station
iv. Ngagel Surabaya Fuel Station
Meanwhile, several fuel stations that are currently on
development are: Batam, Sukabumi, Lampung, Purwakarta and
Klender Fuel Station.
c. Upgrading Station
PT PGAS Solution multiplied one of PGN-owned stations that
are located in West Java, and one of stations that are a recipient
of gas flow from Sumatra Island. This station is one of vital
assets of PGN because natural gas originated from this station
allows PGN to distribute the good energy to the Greater Jakarta
8
area. Not only that, by multiplying the force of this station, PGN
is able to distribute natural gas to PLN (a state-owned electricity
company), allowing PLN to provide electricity for the entire
Java and Bali islands. Here, PGAS Solution’s work scope
covers EPC through to installation.
4. Operation and Maintenance
a. Operation and Maintenance Service Work on Distribution
Pipeline Network
PT PGAS Solution maintain and operate the entire PGN-owned
pipelines network, both on-shore and offshore. Wherever PGN-
owned pipelines are located, PT PGAS Solution always ensure
that communities in the areas are feeling secured and not in
danger by it. PT PGAS Solution have a standard procedure
where we respond to any complaint within the first 24 hours.
Therefore, PT PGAS Solution routinely conduct checks through
our competence, such as:
i. Monitoring and Survey of Pipeline Leakages and Facilities
ii. Operation and Maintenance Protection
iii. Operation and Maintenance of Valve System (mechanical
and civil)
iv. Operation and Maintenance of Metering Regulating Station
v. Operation and Maintenance Off-Take (Gas Station)
vi. Cleaning Pigging
vii. Network Trouble Handling
b. Operation and Maintenance Service Work on Transmission
Pipeline Network
In addition, PT PGAS Solution are also operate and maintain
PGN pipeline assets that are available along the transmission
track, whereas in order to operate and maintain pipelines on the
9
ocean floor, different scope is required. Nevertheless, PT PGAS
Solution also conduct operation and maintenance that cover:
i. Onshore Pipeline:
Patrols, Pipeline Network Inspection and ROW
Maintenance
Maintenance of Remote Radio Repeater System and
Lightning Protection on Remote Tower Repeater
ii. Offshore Pipeline
Pipeline Offshore Patrol and Inspection Navigational
Buoy
Navigational Buoy Maintenance
Joint patrols with the authorities
Inspection and Maintenance on Nearshore and Landfall
c. Information Provision Service and Integrated Data Control
PT PGAS Solution are able to assist in rapid, accurate and
reliable data collection to support PGN service quality
pertaining to the entire customers' gas volume usage, by
utilizing technology that we designed. So as to achieve this, PT
PGAS Solution are performing several works such as:
i. Facility Provision and Maintenance and Gas Meter Data
ii. Provision and Maintenance of EVC (Electronic Volume
Corrector)
iii. Provision and Maintenance of AMR (Automatic Meter
Reading)
1.2.2. PT Solusi Energy Nusantara (SENA)
PT Solusi Energy Nusantara (SENA) is subsidiary of PT PGAS
Solution. SENA was established in Jakarta on 20th April 2015. The
10
activities scope of the company in accordance with the Articles of
Association as follows:
a. Execution of the survey work and technical research.
b. Execution of Conceptual Study, Front End Engineering Design
(FEED) and Detail Engineering Design (DED) work.
c. Execution of Project Management Consultancy and other technical
consultancies.
d. Inspection and Testing, Commissioning and other post-operative
works.
Vision and Mission of SENA :
a. Vision
Engineering best solution in Oil and Gas Industry
b. Mission
i. Provide reliable engineering solution related with ESCO
(Engineering Services Company)
ii. Provide growth to stakeholder
Core Business of SENA :
a. Execution of the survey work and technical research
Company has expertise in survey activities. SENA services are:
i. GIS Mapping and Database
ii. Topographic Survey
iii. Boundary Survey
iv. Route Survey
v. Staking Out
vi. Aerial Survey
vii. ROV Survey
b. Execution of Conceptual Study, Front Engineering Design (FEED)
and Detail Engineering Design (DED) work
11
Company has expertise in preparing engineering design document
which refer to conceptual design from all engineering aspects as
needed, such as pipeline, mechanical, electrical, geodetic, civil,
process, instrument and telemetry.
c. Execution of Project Management Consultancy and other Technical
Consultancies
In the managing the project, company is capable of predicting,
controlling and guiding the performance of the project in
accordance with agreement.
SENAs project management consultancy services are:
i. Project Management Consultancy (PMC)
ii. Project Supervision
iii. Technical Assistance Services (TAS)
iv. Study/research in the energy field
1.3. Problem Background
SENA is an engineering services company in the oil and natural gas industry
that include the pipeline, mechanical, electrical, geodetic, civil, process and
telemetry businesses. SENA provide services include the survey, technical
research, inspection, technical testing, as well as other post-operating works.
SENA notice that PGN has about 7.000 km pipeline that still having plan to do
expansion, that should be check on installation, equipment and techniques that
used in order to protect labour, installations, equipment, facilities and networks
as well as security of oil, natural gas and geothermal resources.
All of those pipelines must be check and certified along with other facilities in
accordance with the regulations from Minister of Mines and Energy No.:
06.P/0746/M.PE/1991 about Work Safety of Oil and Gas Pipelines
1.3.1. Background
a. In terms of delivering reliable engineering solution in Oil & Gas
Industry
12
b. In terms of comply with Regulation of Minister of Mines and
Energy No.: 06.P/0746/M.PE/1991 about Work Safety of Oil and
Gas Pipelines and Regulation No.: 84.K/38/DJM/1998 about
equipment used in oil and gas industry
c. In terms of safety and health awareness at work
d. In terms of efficiency so that PGN Group able to minimize the
budget and optimizing their existing internal resources and
competence simultaneously.
e. As an opportunity for SENA to broaden their scope of work by
creating new market outside PGN Group, making SENA be more
independent and competitive in their industry.
1.3.2. Problem Statement
a. SENA still depend on PGN as Holding Company
b. Business Engineering Solution is More Competitive
1.3.3. Objective
The purpose of this project is :
Provide strategic formulation proposal to increase opportunity for PGN
Group in this case SENA in making profit by expanding businesses and
potential market.
1.3.4. Project Scope
Referring to the purpose of this research and considering the time
constraints, the scope of this study is limited to :
a. Analyzing the strategic that can be used by SENA to expansion
their business as a part of Service Provider for Inspection and
Certification.
b. Formulating the strategic proposal for the next 5 years.
13
CHAPTER 2
LITERATURE REVIEW
2.1. The Micro Environment
The micro environment consists of costumers, clients, partners and
competitors. Unlike, the internal environment, the micro environment is not
directly controllable by the organization. The organization can, however, exert
some influence on the costumers, clients, partners, competitors and other
parties that make up its industry. (Elliott, 2014)
2.1.1. Customers and Clients
Organization must understand the current and future needs and wants
of the target market, such as:
a. Understand what their customers value now.
b. Be able to identify any changes in customer preferences.
c. Be willing and able to respond to changes.
d. Anticipate how needs and wants might change in the future.
e. Be able to influence costumer preferences.
2.1.2. Partners
Organization need to understand their partners, how each partner’s
processes work and how their partnerships benefit each party. Partners
include the following.
a. Logistics Firms. Logistics is the term used to describe all the
processes involved in distributing products; it includes storage and
transport.
b. Financiers. Financiers provide financial services such as banking,
loans and insurances, and the financial system’s infrastructure
facilitates electronic payment transactions with partners and
customers.
14
c. Advertising Agencies. Small business tend to devise their own
advertisements, often with the help of the publication, radio station
or other medium they are advertising with. Larger businesses can
hire the services of advertising agencies. When they do so, they put
an enormous amount of faith in the agency to attract the attention
of potential customers and encourage them to actually engage in a
marketing exchange with the organization.
d. Retailers. Retailers are the businesses from which customers
purchase goods and services. Many retailers, such as corner shops
and supermarkets, sell mainly products made by others. Other
businesses make and retail their products, particularly small
boutique businesses, service businesses and businesses with an
online shop.
e. Wholesales. Wholesalers are an intermediary acting between the
producer and the retailers to provide storage and distribution
efficiencies to both.
f. Suppliers. Suppliers provide the resources that the organization
needs to make its products. Suppliers are crucial business partner
and they must be monitored for continuity of supply and price.
Organization need to know their existing and potential suppliers
costs, availability, time frames and planned innovations to
determine how they can best create value. Organization also need
to know and manage the risks involved in their dependency on their
suppliers. Organizations need to be aware of and pre-empt any
problem (e.g. labour strikes and stock shortages) with the supply
of resources they need to ensure they can fulfil demand.
Organization must identify, assess, monitor and manage risks to
supplies and risks to the price of supplies.
15
2.1.3. Competitors
There are many different types of market competition:
Table 2.1 Types of Competition (Elliott, 2014)
Competitive
Structure
Description
Pure Competition Numerous competitors offer undifferentiated product.
No buyer or seller can exercise market power.
Monopolistic
Competition
Numerous competitors offer products that are similar,
prompting the competitors to strive to differentiate their
product offering from others.
Oligopoly A small number of competitors offer similar, but somewhat
differentiated, products. There are significant barriers to
new competitors entering the market.
Monopoly There is only one supplier and there are substantial,
potentially insurmountable, barriers to new entrants.
Monopsony The market situation where there is only one buyer
16
There are many different levels of competition that organizations face.
Table 2.2 Levels of Competition (Elliott, 2014)
Level of
Competition
Description
Total Budget
Competition
Consumers have limited financial resources and therefore
must make choices about which products to consume and
which to forgo. In this sense, organizations are competing
against all alternative ways the consumer can engage in an
exchange of value.
Generic
Competition
Consumers often have alternative ways to meet their product
needs. The same want or need can be satisfied by quite
different product. This is known as substitutability.
Product
Competition
Some products are broadly similar, but have different
benefits, features and prices that distinguish them from
competing products.
Brand Competition Some products are very similar, offering the same benefits,
features and price to the same target market.
2.2. The Macro Environment
The organization itself and all of the forces within the micro environment
operate within a larger environment known as the macro environment. The
macro environment encompasses the factors outside of the industry that
influence the survival of the organization. (Elliott, 2014)
Key environmental factors that organization need to consider when analyzing
the macro environment include political, economic, sociocultural,
technological, environmental and legal forces (PESTEL).
17
Figure 2.1. The Macro Environment (Elliott, 2014)
Political
•The political arena has a huge influence upon business and the spending power ofconsumers. Organization must consider:
•The stability of the political environment.
•The influence of goverment policy, laws and regulation.
•Goverment trade agreements such as ASEAN.
•Taxation and goverment rebate policies.
Economic
•Organization need to understand the economy in the short and long terms. Organization must consider:
•Interest rates, economic growth (gross domestic product) and consumer confidence.
•Income levels, savings, credit and spending levels.
•The level of inflation, employment and unemployment.
•Exchange rates and balance of trade.
Sociocultural
•Social and cultural influences have a large influence on businesses. Organization mustunderstand:
•Religion, culture, subcultures, values, attitudes, and beliefs.
•Population trends including age, household size and composition, marriage and divorce trends,places lived, ethnicity and health.
Tecnological
•Technology is vital for competitive advantage. Organization must consider:
•Whether offerings can be made more cheaply and to a better standard of quality using new technologies.
•Whether technology can be used to innovate.
•Whether distribution or communication can be improved using technology.
Environmental
•Organization need to understand environmental influences including ecological and environmental aspects such as weather, climate and climate change.
Legal
•Organization need to understand legal and regulatory influences such as:
•Laws including the Competititon and Consumer Act, The Privacy Act, The Spam Act, The Sale of Goods Act and the Price Surveillance Act.
•Regulations from industry bodies such as the Advertising Standards Bureau.
18
2.2.1. Political Forces
Politics is directly relevant to the organization through:
a. Lobbying for favorable treatment at the hands of the government
b. Lobbying for a ‘light touch’ approach to regulation
c. The very large market that government and its bureaucracy
comprise.
d. The ability of political issues to affect efforts at international
marketing.
Many organization, particularly smaller ones, monitor political issues,
but do not actively engage in politics. Large organizations, or the bodies
created to represent smaller ones, can engage directly in politic by
seeking to influence lawmakers.
2.2.2. Economic Forces
Economic forces refer to all of those factors that affect how much
money people and organizations can spend and how they choose to
spend it. The obvious components of this are income, prices, the level
of savings, the level of debt and the availability of credit.
2.2.3. Sociocultural Forces
Sociocultural forces is a term used to describe the social and cultural
factors that affect people’s attitudes, beliefs, behaviors, preferences,
customs and lifestyles. They comprehensively and pervasively
influence the value people put on different product offerings.
Demographics describe statistics about a population. A population can
be characterized by its demographic characteristics: age, gender, race,
ethnicity, educational attainment, marital status, parental status and so
on. These characteristics influence the behavior of society as a whole
and the individuals within it.
19
2.2.4. Technological Forces
Technology is advancing at an unprecedented rate. Our daily lives are
touched by technology almost all of the time. Technology does not just
change the expectations and behaviors of customers and clients.
Technological change can have huge effects on how suppliers work.
Manufacturers, suppliers and distributors are likely to be in constant
electronic exchange with marketing organizations, ensuring stock
levels are automatically monitored and maintained, tracking goods in
transit down to the nearest kilometers. While enabling many advances,
technology can also pose a threat to organization.
2.2.5. Environmental Forces
Environmental forces is a term used to describe the environmental
factors that affect individuals, companies and societies. There is a wide
range of environmental factors that companies need to be mindful of,
including ecological and environmental aspects such as weather,
climate and climate change. Environmental factors can have more
influence in certain industries, and organization need to be mindful of
the factors likely to influence their particular industry (e.g. tourism,
farming and insurance).
2.2.6. Legal Forces
Laws and regulations are intimately tied to politics. Laws and
regulations govern what marketing organizations can and cannot
legally do. They spell out their obligations to consumers, partners,
suppliers, government authorities and society as a whole. The most
significant laws and regulations fall into the following categories:
privacy, fair trading, costumer safety, prices, contract terms and
intellectual property.
20
2.3. SWOT and TOWS Analysis
SWOT is a simple and useful tool to understand the current condition of the
company. The analysis can trigger into decision making process, as well to
creating strategy within the company.
Strength are those attributes of the organization that help it achieve its
objectives: competitive advantages and core competencies. Weakness are those
attributes of the organization that hinder it in trying to achieve its objectives.
Strength and weakness are considered to be internal factors and therefore
directly controllable by the organization. Opportunities are factors that are
potentially helpful to achieving the organization’s objectives. Note the
emphasis on the word ‘potentially’ in the previous sentence. Opportunities are
only of benefit if the organization responds effectively though the organization
may be able to have influence over them. Threats are factors that are potentially
harmful to the organization’s efforts to achieve its objectives. Like
opportunities, threats are beyond the organization’s direct control, bur require
an effective response by the organizations. Opportunities and threats can arise
from many different factors in the organization’s environment.
21
Figure 2.2 A Potential Framework For a SWOT Analysis (Elliott, 2014)
Another step that will strengthen the analysis from SWOT, we can use SWOT
Matrix, which by identifying fit between company strength and upcoming
opportunities or overcome the weakness to create more business. SWOT
Matrix can be constructed as shown below:
a. S-O Strategies which pursue opportunity that are good fit to the company
strength’s.
b. W-O Strategies which overcome weakness to pursue opportunities.
c. S-T Strategies identify ways that the company can use its strength to reduce
its vulnerability to external threats.
d. W-T Strategies establish a defensive plan to prevent the company weakness
from making it highly susceptible to external threat.
Strengths
•What does your companydo well?
•What do your customerscompliment you on?
•What makes yourcompany stand out fromcompetitors?
•What advantages doesyour company have whencompared with others?
Weakness
•What doesn't yourcompany do well?
•What do your customerscomplain about?
•What are the unmetneeds of your salesforce?
•What disadvantages doesyour company face?
Opportunities
•Are there emergingtrends that fit with yourcompany's strengths?
•Are there things thatyour competitors don'tdo well?
•Are customer and clienttastes changing?
Threats
•What do yourcompetitors do betterthan you?
•Are there emergingtrends that threaten yourbusiness?
Unfavourable Favourable
(Can
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com
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– m
ay b
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Exte
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(Can
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Inte
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22
All those analysis require the identification of any must do item and potential
opportunity that has been identify from the las analysis in the SWOT matrix.
TOWS and SWOT are acronyms for different arrangements of the words
Strengths, Weaknesses, Opportunities and Threats. The TOWS Matrix is a
relatively simple tool for generating strategic options. By using it, you can look
intelligently at how you can best take advantage of the opportunities open to
you, at the same time that you minimize the impact of weaknesses and protect
yourself against threats.
Used after detailed analysis of your threats, opportunities, strength and
weaknesses, it helps you consider how to use the external environment to your
strategic advantage, and so identify some of the strategic options available to
you.
The only difference between TOWS and SWOT is that TOWS emphasizes the
external environment whilst SWOT emphasizes the internal environment.
Figure 2.3 TOWS Strategic Alternatives Matrix (Weihrich, 1982)
23
This helps you identify strategic alternatives that address the following
additional questions:
a. Strengths and Opportunities (SO) – How can you use your strengths to take
advantage of the opportunities?
b. Strengths and Threats (ST) – How can you take advantage of your strengths
to avoid real and potential threats?
c. Weaknesses and Opportunities (WO) – How can you use your
opportunities to overcome the weaknesses you are experiencing?
d. Weaknesses and Threats (WT) – How can you minimize your weaknesses
and avoid threats?
2.4. Industry Competitiveness
“Porter’s five forces model is an analysis tool that uses five forces to determine
the profitability of an industry and shape a firm’s competitive strategy (Porter,
2008). This will help to understand the attractiveness and competition from the
market itself. Having the clear understanding on the industry, it helps company
to identify the future on the company as well the threat that will face in the
future.
24
Figure 2.4 Forces Driving Industry Competition (Porter, 1980)
There are five important forces that determine competitive power in business,
there are:
2.4.1. Rivalry among Existing Player
Rivalry among existing payers is to understand players strength and
weakness of their business, also important to identify number of player
in the market. Having many players in the market will also bring the
level of competitive high.
This force describes how competition level in the market between
current players. The impact on the high competitive market, pricing can
be low/moderate, less margin.
Competition among existing player is High if:
a. High number of companies (fragmented), roughly smaller size and
capabilities.
b. Slow industry growth or decline, growing market.
Industry Competitors
(Rivalry Among Existing Firms)
Potential Entrants
Suppliers
Substitutes
Buyers
Bargaining power
of buyers
Bargaining power
of suppliers
Threat of new entrants
Threat of substitute products or services
25
c. Diverse competitors approach and style.
d. Commodity, differentiation, low switching cost (for buyer).
e. High fixed cost.
f. Capacity augmented in large increments.
g. Product is perishable.
2.4.2. Threat of New Entrance
Threat of New Entrance is to help to understand the power of current
player in the market. This affected the ability of competitor in the future
will appears.
The competition in industry will be identify high if the situation to enter
the industry is consider tough which requires high investment, high
competition, unique expertise in the market.
The threats of new entries define High if:
a. Economy of scale (supply side) is unimportant.
b. Network effect (demand side) does not exist.
c. Low customer switching cost, low loyalty.
d. Low capital requirement.
e. Low incumbent advantage.
i. Technology patent.
ii. Access to raw material.
iii. Location.
iv. Government subsidy.
v. Long learning or experience curve.
f. Equal access to distribution channel.
g. No restrictive government policy (un/deregulated).
2.4.3. Bargain Power of Buyer
Power of the buyer will determine the price that can be competitive or
not in the market. This driven by number of buyer in the market that
can give pressure to the company to define the price.
26
Supplier is the firms who deliver the good and service to the company
that operate in the industry.
Supplier bargain power is High if:
a. Concentrated supplier, fragmented industry.
b. High switching cost (for player).
c. Differentiated product.
d. Supplier product is an important raw material, cannot be substitute.
e. Threat of potential forward integration by supplier.
f. Industry not important customer group of supplier, small portion of
supplier sales or supplier does not depend on industry, especially
the industry grow is slow.
2.4.4. Treat of Substitutes
Treat of Substitutes is affected consumer/customer can choose other
product/services or using different way to fulfill their needs.
Terms of buyer represent the costumer of the company. Having low
bargaining power of buyer will benefit for the company, which can
generate more profit.
Buyer bargaining power is likely High, if:
a. Concentrated buyer, fragmented industry.
b. Buyer bus in large volumes, especially in high fixed cost industry.
c. Commodity, differentiation, easy to substitute.
d. Low switching cost (for buyer).
e. Potential backward integration of buyers.
f. High portion of buyers cost.
g. Buyers earns low profit or strapped for cash.
h. Quality of buyer product is independent of industry.
2.4.5. Bargain Power of Supplier
Bargain power of supplier is to assess how many supplier can help to
support the needs of the company, this will identify weather the
27
supplier can driving the price. This will drive by number of supplier
exist in the market, and uniqueness of the market can also determine
the power of supplier.
Existing of the substitute will be considered when the existing
product/services compared with an alternative product/service looks
more effective and efficient. This substitute can offer lower price but
having better performance to meet the same purpose. In this case threat
of the substitute will impact to the market share, volume as well the
profit in this market.
Threat of substitute is High, if:
a. New technology, better service and facilities, better
price/performance.
b. New regulation.
c. New idea of doing things.
d. Change of customer habits/demographic.
e. High earning company/industry produces the substitutes.
2.5. Identifying The Market Segmentation, Targeting and Positioning
Each of the organization had developed different marketing strategy to satisfy
the different of customer needs. The process to choose their target market
involves of four basic step:
Figure 2.5 Four Basic Process to Choose Target Market (Elliott, 2014)
Identifying Markets
Determining Market
Segmentation
Selecting Target Market
Positioning through Market
Strategies
28
2.5.1. Identifying market
Identifying market process is a fundamental component of marketing
strategy for any organization. This process requiring detailed analysis
and decision making.
2.5.2. Segmentation
Segmentation variables are characteristics that buyers (i.e. individuals,
groups or organization) have in common and the might be closely related
to their purchasing behavior. Age, gender, income, and occupation, for
example, can all be linked to the purchase or consumption of particular
products (Elliott, 2014)
To ensure that segmentation is effective, the segments should be
evaluated against the following criteria:
a. Measurability. The variable used to define the market segment must
lend themselves to accurate and comprehensive measurement.
Segmentation variables based on demographic variables are high
measurable and extensive data are available through commercial
databases and organization. More abstract variables, such as
personality, can be notoriously difficult to measure.
b. Accessibility. Segments must be able to be clearly identified,
reached and served through distribution and communication
channel. In this sense, opinion leaders are attractive to organizations
but very difficult to identify and communicate with.
c. Substantiality. Market segments must be of sufficient size and
purchasing power to make them a profitable target market. Ideally
segments should be as large as possible, but still be homogeneous in
their purchase preference and behavior.
d. Practicability. Segments are only of use if marketing program can be
formulated to identify, communicate with and service those chosen
market segments. Segmentation based on personality or
29
psychological variables, while theoretically no relevant and recent
data are available.
2.5.3. Targeting
After the segmentation analysis we can see the market opportunities
available in the target market. The second step in marketing when
selecting the most attractive and potential segment, the company have
to evaluate the potential sales of these segment, the growth opportunity
the competition and its ability to compete. Then it have to decide how
many segments to enter and determining which segments offer the most
potential opportunity, also whether they can market to this potential
segment because it will be the market segment or segment appointed
toward all marketing activities will be directed.
2.5.4. Positioning
Positioning describes how target markets perceive the organization’s
offer relative to competing offers. It is how customer distinguish the
organization, its product and its brands from competitors when they are
selecting from among the available alternatives (Elliott, 2014).
The organization can pursue positioning to manage:
a. How it, as a whole, is perceived relative to competitors in the minds
of its stakeholder groups.
b. How its brands are seen, typically focusing on distinguishing
product attributes.
c. How the market distinguishes its offering from those of closely
competitive brands.
Position is fundamental important for organization, because it describe
how organization is perceived by the market, relative to its competitors
on the attributes that customers regard as important in their decision
making.
30
2.6. Competitive Advantage, Competitive Strategy and Company Value
2.6.1. Competitive Advantage
Today leaders of multi-business corporations are learning to identify
the maximum strategic opportunity set, those opportunities that can let
companies take the fullest advantage of their capabilities and their
potential to pursue new strategies.
Competitive Advantage describes the way a firm can choose and
implement a generic strategy to achieve and sustain competitive
advantage.
Competitive advantage can be defined as anything that a firm does
especially well compared to rival firms (David, 2011). Competitive
advantages is something to do with more competitive market: lower
barriers to entry or simply a large number of firms may give an industry
an advantage in competing with foreign rivals (Gupta, 2009). Where it
is stated that a firm has a competitive advantage when it is
implementing a value creating strategy not simultaneously being
implemented by current or future competitors (Barney, 1991).
2.6.2. Competitive Strategy
To gain competitive advantage, there may be several sources. The
company can make product with the highest quality, creating product
with better performance, giving customers more value for money,
having lower cost than competitors, giving superior customer services,
and making a more reliable and longer-lasting product.
2.6.3. Company Value
To measure the company value we also used Projected Financial
Statement Analysis, this will used to know is the company has a good
value after the business expansion.
According to Sharmeen (2014) valuation is the way we view or focus
on the limitation and also advantages of various methods and learn the
31
suitability of the methods that would prove the usefulness to the
researchers in the conduct of research on valuation. Value is created
when capital is invested at a rate of return higher than the cost of capital.
The value will increase along with the time value of money and the
risk-free rate of interest. These things happen due to the present value
of the exercise cost decreases as interest rates increases.
2.7. Business Expansion
Based on Seven Ways to Expand Articles there are 7 ways to have business
expansion:
2.7.1. Increase your sales and products in existing markets. This is
obviously the easiest and most risk-free way to expand. This tactic
may require a bigger location, different pricing strategies,
new/improved marketing techniques - but it will be in a customer
group with whom you already have a relationship.
2.7.2. Introduce a New Product. You have a successful product/service that
you have been offering for some time and have been collecting data,
customer feedback and doing the tinkering on your newest product.
This is a normal evolution in business, not just an expansion tactic.
When positioned as adding value and being responsive to customer
needs, this can be a relatively risk-free way to expand.
2.7.3. Develop a New Market Segment or Move into New Geography. Both
of these areas require cost outlays and uncertainty. Moving your
products into new categories or demographic segments requires
market research, beta testing and new marketing strategies, i.e. a
message for a 16-year old will differ that one for a 60-year old.
Management of new remote locations may absorb significant time
and attention. While the risks are more, the payoffs are large - and for
32
most businesses looking to expand, these two methods of expansion
are inevitable.
2.7.4. Start a Chain. A restaurant, retail or service business that's easily
reproduced and can be run from a distance is all you need to launch a
chain. But, you must be cognizant of what made the first location a
success - was it location, your staff or you? If it is just you, then
duplication is only possible through detailed operations plans and
sharing staff between locations. You will need to duplicate the plan
of your first location while meeting increased customer demands.
Starting a chain gives your current staff a crack at "management"
duties, training opportunities and an opportunity to expand their
horizons.
2.7.5. Franchise or License. While it's a quick way to grow, a franchise
agreement can cost (minimally) $100,000 to prepare. You will need
to be a good teacher, be able to prepare the training manuals
(preferably in more than one language), be very organized and willing
to travel. Licensing can carry less risk, but demands giving up a
certain amount of control. Licensing a patent, trademark or industrial
design means that you sell manufacturing, distribution or production
rights.
2.7.6. Join Forces / Strategic Alliance. A merger or acquisition combines
the best of two companies, expands your customer base, increases
intellectual capital and delivers operational efficiencies. The trick is
finding the right partner. These partners may be new distributors, but
be forewarned large retailers exact heavy performance expectations.
Can you perform to the letter of your promise? Can you meet high
standards of quality (ISO, or the like) and adapt your procedures to
33
meet just-in-time delivery? Due diligence and strong contractual
arrangements are essential here.
2.7.7. Go Global. You can decide to go global in a number of ways.
Growing markets, rising consumer spending, improved business
climate--sometimes the only place to find these things is overseas.
Doing business internationally can take the form of exporting,
licensing, a joint venture or manufacturing, but whatever form you
choose, the basic business rules apply: assess customer demand, gain
legal and accounting assistance, protect intellectual property and
obey regulations.
More difficult to understand than the regular business affairs may be
the cultural nuances - ignore them at your peril. In some countries,
particularly those in Asia, a local partner is virtually a requirement.
Your first stop should be your target country's economic development
agency, which can help marshal local resources to get you on your
way, possibly with a small financial boost. Be patient. Growing your
business globally can take more than one "sightseeing trip" to the
region. Here are some steps in going global, from easiest to hardest.
2.8. Risk Management
Building a culture of risk management is primarily a process of developing
people in your organization who think and plan projects effectively, and who
are supported by company systems that encourage them to think and plan
effectively.
It is important to see risk as a business-wide challenge. After all, business
enterprise itself is a risk and that is what makes success and payoff satisfying
to the business entrepreneur. Project risk starts with the business itself, its
market position and business viability, its partnerships and vendor
34
relationships, and the economic risks the business itself faces, as well as
customer and client risks (Barkley, 2004).
Once we have identified the risks in a particular situation we need to consider
how we can measure them. And the simple reason to measure is that it is easier
to talk more objectively about risk when there are numbers attached to it. As
we have discussed earlier, there is a considerable amount of subjectivity
involved in dealing with risk issues, so the more that subjectivity can be
removed, the easier it will be to make meaningful decision about risk issues.
Once those decisions are made, the more objective data we have available the
easier it will be for the impacts of those decisions, good or bad, to be tracked.
Risk is a concept that describes and measures the combination of the
likelihood of a negative outcome and the severity of consequences that result
from that outcome. The higher the risk number, the more “risky” is the
combined likelihood and severity of a particular event.
Likelihood is measured as probability (a number between 0 and 1 that
represents the chance of some consequence occurring) or as frequency (a
number that represents how many times a consequence occurs during a fixed
time period).
Consequence is measured in a variety of ways, depending on the nature of the
consequences being considered. For example, if the consequences involve
human health or safety, then consequences may be measured by fatalities or
injuries. If consequences involve environmental damage, they may be
measured by the cost required to repair the damage and restore the affected
environment.
Risk assessment is used to address issues pertaining to safety, environmental
protection, financial management, project or product development, and many
other areas of business performance. In the pipeline industry, risk assessments
35
are utilized for many of these same reasons. For the purposes of this fact sheet,
however, we are addressing risk assessment related to pipeline safety – that
is, protecting the public, property, and the environment from pipeline failures.
Risk assessments of this kind begins by looking at the different ways a
pipeline can fail and release its contents – such as oil or natural gas – into the
environment. Factors that can lead to pipeline failure are referred to as
pipeline failure threats. For example, a pipeline can leak because corrosion
weakens the steel in the pipe. Failures also occur as a result of excavation
equipment striking the pipe. Identifying potential threats to a pipeline requires
looking at the factors that cause failures as well as looking for unique factors
that could lead to failure at a particular location, whether or not that particular
failure has occurred or been observed before.
The next step in risk assessment is to assess the likelihood that each threat
could lead to a failure at a particular location on the pipeline. This assessment
is performed by looking at the specific characteristics of the pipeline at any
given location, along with the unique characteristics of the area around the
pipeline. For example, the susceptibility of the pipeline to failure due to
corrosion is dependent on numerous characteristics, such as the type and
condition of the pipe’s coating, the effectiveness and operability of the
operator’s corrosion control equipment, and the soil conditions surrounding
the pipe.
As another example, the susceptibility of a pipeline to third-party excavation
damage is dependent on characteristics such as the extent and type of
excavation or agricultural activity along the pipeline right-of-way, the
effectiveness of the One-Call System in the area, the amount of patrolling of
the pipeline by the operator, the placement and quality of right-of-way
markers, and the depth of cover over the pipeline. In all cases, different threats
will exist at different locations along the pipeline.
36
The next step is to assess the types of consequences that could result from a
pipeline release at a specific location, along with the potential severity of those
consequences. For example, failures of pipelines in remote areas, where
people do not live or congregate, will likely result in lower impacts than
failures in areas of dense residential or commercial development. Similarly,
failures in areas sensitive to environmental damage, such as the locations of
drinking water sources or endangered species’ habitats, have higher
environmental consequences than areas without these features.
The final step in risk assessment for a pipeline is to use the results of the
likelihood and consequence assessments to determine the overall risk at each
pipeline location. This allows the operator to ensure that sections identified as
having the highest risk are assigned top priority for actions that will reduce
the likelihood of a release, reduce its potential consequences, or both.
The results of the likelihood assessment also provide the operator with
information on the significance of different pipeline threats at different
locations, allowing them to carry out actions that reduce the likelihood of a
pipeline failure. For example, an operator may choose to conduct internal
inspections on those pipeline sections that are shown to be most susceptible
to corrosion, to identify where corrosion might be occurring, and to repair any
damage before the pipe fails.
The results of the consequence assessment provide the operator with
information on the significance of consequences of accidents at different
locations, so that operators can carry out steps to reduce or eliminate those
consequences. For example, an operator may place specialized emergency
response equipment at an environmentally sensitive site to allow for quick
response should a pipeline release occur.
It is important for pipeline operators to be keenly aware of threats and
potential consequences of accidents along the entire length of their pipelines,
and to employ rigorous assessment as a tool to manage those risks.
37
As required by Regulation of Indonesian Government, Equipment used in Oil,
gas, Geothermal, Petrochemical and Power Generation and all general
industries in Indonesia shall be certified by Government prior to operate and
require operators to perform risk assessments of their pipelines to:
a. Ensure that integrity assessment methods (internal inspection, pressure
testing, direct assessment, etc.) are employed to address significant threats
on pipeline segments.
b. Ensure that integrity assessments of the highest risk segments are
scheduled with priority over lower risk segments.
c. Ensure that assessments of threats and potential consequences are
conducted to define, evaluate, and implement additional measures that
address significant threats to the pipeline (e.g., conducting depth-of-cover
surveys and correcting any deficiencies), or reduce potential consequences
of failures (e.g., installing additional valves on the pipeline to reduce the
amount of liquid or gas that might be released should a failure occur).
2.9. MIGAS Certification
As required by Regulation of Indonesian Government, Equipment used in Oil,
gas, Geothermal, Petrochemical and Power Generation and all general
industries in Indonesia shall be certified by Government prior to operate.
That was also stated in Kepmentamben No. 06.P/0746/M.PE/1991 Chapter 5,
that the safety inspection is carried out as follows:
1. Upon installation and or installation will be installed;
2. When the technical performance is used;
3. Periodically according to the nature and type of installation, equipment and
techniques used.
4. At any time if deemed necessary by the Director General cq Directorate of
Oil and Gas Mining Engineering (Direktur Jenderal cq Direktorat Teknik
Pertambangan Minyak dan Gas Bumi).
38
The following is Certification Category as required:
2.9.1. Migas Certification (under Directorate of Oil & Gas)
The certification covers equipment and facility operates in the Oil and
Gas Industries, except for Boiler Certification
a. SKPI (Facility Worthiness Certification)
b. SKKP (Platform Certification)
c. SKPP (Individual Equipment Certification)
i. Pressure Vessel, Heat Exchanger, Cooler, etc (standard API,
ASME, SNI, ISO)
ii. Pressure Safety Valve (PSV)
iii. Lifting equipment (standard API, ASME, AWS, ISO)
iv. Electrical equipment
(Power Generator Unit, Power Transformer Unit,
Switchgear and Motor Control Center Unit - (standard API,
IEC, ISO))
v. Rotating Equipment (Pump and Compressor Unit)
vi. Pipeline (standard ASME, API, DNV-OSS)
vii. Storage Tanks (standard API, SNI, NFPA)
viii. Rig (standard API, ASME, IADC, SNI, ISO, MODN, DNV,
AWS)
d. WPS/PQR
e. Welder/Operator Certification
2.9.2. LPE Certification (under DGEED - Directorate General Electricity and
Energy Development)
The certification covers facility that generate Electricity power both for
Own Private consumption use and Public consumption use
a. Commissioning Certification
b. IUKU (Permit for Public Consumption Electricity power)
c. IUKS (Permit for Private Consumption Electricity power)
39
2.9.3. GSDM Certification (under General Mining and Geothermal
resources)
The certification covers equipment and facility operates in the general
mining and geothermal resources, except for Boiler Certification
a. Facility Worthiness Certification
b. Individual Equipment Certification
i. Pressure Vessel, Heat Exchanger, Cooler, etc
ii. Pressure Safety Valve (PSV)
iii. Lifting equipment
iv. Electrical equipment
(Power Generator Unit, Power Transformer Unit,
Switchgear and Motor Control Center Unit)
v. Rotating Equipment (Pump & Compressor Unit)
vi. Pipeline
c. WPS/PQR
d. Welder/Operator Certification
2.9.4. Depnaker Certification (under Directorate of Man Power)
The certification covers equipment and facility operates in General
Industries
a. Boiler, Pressure Vessel, Heat Exchanger, Cooler, etc.
b. Pressure Safety Valve (PSV)
c. Lifting equipment
d. Electrical equipment
(Power Generator Unit, Power Transformer Unit, Switchgear and
Motor Control Center Unit)
e. Rotating Equipment (Pump & Compressor Unit)
f. Lightning
g. WPS/PQR
h. Welder/Operator Certification
40
2.9.5. Helideck and Helipad Certification (under DGAC (Directorate General
Air Communication))
The certification covers Helideck and Helipad operates in all area in
Indonesia.
2.10. The Marketing Mix - 7Ps plus Technology Framework
The marketing mix is the term given to a set of variables that a marketer can
exercise control over in creating an offering for exchange.
A target market is a group of costumers with similar needs and wants. Not
all costumers in a target group will have exactly the same needs and wants
but they are more similar than different.
The 7 Ps Framework is Product, Price, Promotion, Place, People, Process,
and Physical Evidence (Elliott, 2014).
Figure 2.6 The 7 Ps Framework – Product, Price, Promotion, Place, People,
Process, And Physical Evidence (Elliott, 2014)
41
2.10.1. Product
A product is anything offered to a market. It can be a good, a service,
an idea or even a person. Some product are branded and others are
not. A brand is a collection of symbols such as a name, logo, slogan
and design intended to create an image in the costumer’s mind that
differentiates a product from competitors products.
Products can be best understood as a bundle of attributes that when
exchanged have value for customers, clients or society. Bundle of
attributes refers to the features and functions of a product, which
benefit the customer. We should understand that customers have
needs and wants, and this thinking is based on economics. Needs are
day-to-day survival requirements. Wants are desires, and are not
necessary for day-to-day survival. And demand, a want that a
consumer has the ability to satisfy. Products can also be categorized
as either goods or services. Goods are physical (tangible) offerings
that are capable of being delivered to customer. Services are
intangible offerings.
To many of marketers remain product rather than customer focused.
It is important to understand that marketing thinking starts with the
customer and ends with the customer.
2.10.2. Price
Price is the amount of money a business demands in exchange for its
offerings. Pricing is a complex marketing decision that must take
account of many factors, including:
a. Production, communication and distribution costs
b. Required profitability
c. Partners requirements
d. Competitors prices
e. Customers willingness to pay.
42
2.10.3. Promotion
Promotion describes the marketing activities that make potential
customers, partners and society aware of and attracted to the
business’s offering. The product might be already established,
modified, new, information or education. Promotion should not be
thought of merely as advertising. While advertising is an important
component of promotion, many organizations use other methods to
promote products as well.
2.10.4. Place (Distribution)
Place (Distribution) refers to the means of making the offering
available to the customer at the right time and place. We must ensure
products are available to the target market in the right amount and at
the right time while managing the costs of making the products
available. Such costs include inventory, storage and transport.
The science (or art) of ensuring products are in the right place at the
right time in the right quantity is known as logistics and the various
partners that contribute to the process make up what is called the
supply chain.
2.10.5. People
People refers to any person coming into contact with customers who
can affect value for customers. The people must have appropriate
interpersonal skills, aptitude and knowledge to deliver offerings that
customers value. Fellow customers can also affect the costumer’s
service experience.
2.10.6. Process
Process refers to the systems used to create, communicate, deliver
and exchange an offering. We must understand the systems that are
used to create, communicate and deliver offerings for exchange.
43
Processes can also be viewed more broadly to take into account
almost everything the marketing organization does, from market
research to innovation to mailing our catalogues.
2.10.7. Physical Evidence
Physical evidence refers to the tangibles cues, including the physical
environment, that customers use to evaluate product, particularly
services. We can use physical evidence to reassure potential
customers as to quality of the services.
2.10.8. Technology
Technology, particularly the internet and associated communications
innovations, dramatically changed distribution, particularly for
products that have been digitally enabled.
With technology, we can also create the simply process (refers to the
systems used to create, communicate, deliver and exchange an
offering) and connecting the people more easily.
2.11. Financial Analysis
In this GFP, we use some financial indicators as the tools to measure the
financial impact of this business proposal, as part of company’s performance.
2.11.1. Cash Flow
Cash flow is a measure of how much money the firm actually has on
hand at any given time to pay accounts payable, such as: employee
salaries, taxes, insurance premiums, reimbursable expenses, etc.
2.11.2. Operating Income
Operating income is calculated by taking revenues and adjusting for
the cost of doing business or operational expenses. This number can
be found on a company’s income statement and is an important
measure before calculating the net profit.
44
2.11.3. Present Value
In economics, present value, also known as present discounted value,
is the of an expected income stream determined as of the date of
valuation. The present value is always less than or equal to the future
value of money, expect during times of negative interest rates, when
the present value will be greater than the future value (Moyer et al,
2011:147-498).
The most commonly applied model of present valuation uses
compound interest. According to Brealey et. al (2014:20), the general
formula for Present Value (PV) as follow:
𝑃𝑉 =𝐹𝑉
(1 + 𝑖)𝑛
Where :
𝐹𝑉 is the future amount of money that must be discounted.
𝑛 is the number of compounding periods between the present
date and the date where the sum is worth.
𝑖 is the interest rate for one compounding period (the end of a
compounding period is when interest is applied, for example,
annually, semiannually, quarterly, monthly, daily). The interest
rate, , is given as a percentage, but expressed as a decimal in this
formula.
2.11.4. Future Value
Future value is the value of an asset at a specific date. It measures the
nominal future sum of money that a given sum of money is “worth”
at a specified time in the future assuming a certain interest rate, or
more generally, rate of return.
From PV equation before, then the Future Value (FV) calculation can
be formulated as follow:
𝐹𝑉 = 𝑃𝑉. (1 + 𝑖)𝑛
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Where:
𝑃𝑉 is the value at time = 0 (present value),
𝐹𝑉 is the value at time = n (future value),
𝑛 is the number of periods (not necessarily an integer),
𝑖 is the interest rate at which the amount compounds each period.
2.11.5. Capital Budgeting
Capital budgeting, or investment appraisal, is the planning process
used to determine whether an organization’s long term investments
such as new machinery, replacement machinery, new plants, new
products, and research development projects are worth the funding of
cash through the firm’s capitalization structure (debt, equity or
retained earnings). It is the process of allocating resources for major
capital, or investment, expenditures (Sullivan et. al. 2005:375). One
of the primary goals of capital budgeting investments is to increase
the value of the firm to the shareholders.
Many formal methods are used in capital budgeting, commonly
including the following techniques:
a. Payback Period
The length of time required to recover the cost of an investment.
The payback period of a given investment or project is an
important determinant of whether to undertake the position or
project, as longer payback periods are typically not desirable for
investment positions. It is calculated as (Weygandt et. al.
2012:468):
𝑃𝑎𝑦𝑏𝑎𝑐𝑘 𝑃𝑒𝑟𝑖𝑜𝑑 =𝐶𝑜𝑠𝑡 𝑜𝑓 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
𝐴𝑛𝑛𝑢𝑎𝑙 𝐶𝑎𝑠ℎ 𝐼𝑛𝑓𝑙𝑜𝑤𝑠
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b. Net Present Value
Net Present Value (NPV) is the difference between the present
value of cash inflows and the present value of cash outflows. NPV
is used in capital budgeting to analyze the profitability of a
projected investment or project.
NPV equation as follow (Brealey et al, 2014:22):
𝑁𝑃𝑉 = ∑𝐶𝑡
(1 + r)t− 𝐶𝑜
𝑇
𝑡−1
Where:
𝐶𝑡 is net cash inflow during the period t,
𝐶𝑜 is total initial investment costs,
𝑟 is discount rate,
𝑡 is number of time periods.
A positive net present value indicates that the projected earnings
generated by a project or investment exceeds the anticipated
costs. Generally, an investment with a positive NPV will be a
profitable one and an investment with a negative NPV will result
in a net loss. This concept is the basis for the Net Present Value
Rule, which dictates that the only investment that should be made
are those with positive NPV values.
c. Internal Rate of Return
The IRR is the interest rate, also called the discount rate, that is
required to bring the net present value (NPV) to zero (NPV=0).
That is, the interest rate that would result in the present value of
the capital investment, or cash outflow, being equal to the value
of the total returns over time, or cash inflow. As the following
equation (Brealey et al, 2014:112):
47
𝑁𝑃𝑉 = ∑{𝑃𝑒𝑟𝑖𝑜𝑑 𝐶𝑎𝑠ℎ 𝐹𝑙𝑜𝑤|(1 + 𝑅)^𝑇} − 𝐼𝑛𝑖𝑡𝑖𝑎𝑙 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡
Where:
R is the interest rate
T is the number of time periods
IRR is calculated using the NPV formula by solving for
R if the NPV equal zero.
After obtain the IRR, the decision shall be “Accept the project
when the internal rate of return is equal to or greater than the
required rate of return. Reject the project when the internal rate
of return is less than the required rate of return” (Weygandt et al,
2012:481).
48
CHAPTER 3
METHODOLOGY
3.1 Method of Study
3.1.1 Data Collection
There are two types of methods to collect the data for this research:
primary data collection and secondary data collection method. In this
GFP, we were using both data collection method for the analysis.
According to Sekaran (2010), primary data refers to information comes
from the first-hand by the researcher on the variables of interest for the
specific purpose of the study. Some examples of sources of primary
data are individuals, focus groups, panels of respondents specifically
set up by the researcher and from whom opinions may be sought on
specific issues from time to time, or some unobtrusive sources such as
a trash can. The Internet can also serve as a primary data source when
questionnaires are administered over it. And based on Sekaran (2010),
secondary data refers to information gathered by someone other than
the researcher conducting the current study. The data can be internal
and external and information that can be accessed through the internet
or published information. There are several sources of secondary data,
including books and periodicals, government publications of economic
indicators, census data, statistical abstracts, databases, the media,
annual reports of companies, etc.
Primary data will be gathered from several sources as follow:
a. Internal Interview (PT PGAS Solution and SENA)
b. External Interview (PT PJ-Tek Mandiri)
49
While for secondary data, we were use several data as follow:
a. Annual reports of SENA
b. Total existing PGN pipeline and also projection
c. Budget and Cost Realization of PGN Pipeline Certification
d. Total Human Resources that already have capability in inspection
and certification
3.1.2 Data Analysis
With all data collection that we were gathering, selecting, structuring,
and interpreting. The next step is try to analyze the relevant data. This
method of study is conducted through qualitative and quantitative
analysis in Pipeline Construction Inspection and Certification issues,
where by quantitative analysis we can reach appropriate
recommendation for implementation new opportunity business in the
company. TOWS Analysis, Feasibility Analysis in 7 Aspects and
Financial Analysis area qualitative analysis that we choose to use in
this GFP to strengthen points of recommendation.
3.2 Research Design
According to Kothari (2004) research design is a plan of the study, a road map
and blueprint strategy of an investigation to obtain answers from the objective
of the research.
Based on Creswell (2014) research design is a model or an action plan upon
which the entire study is built, dictates the manner in which a study is
conducted and provides the road map of a study in terms of the sample, data
collection instruments and analysis procedure.
50
Below is a picture of the research design process that will be used in the
research:
Figure 3.1 Research Design Process
Current Situation (Problem
Statement)
Expected Results (Recommendation)
Data Collection
Business
Opportunity Data Analysis
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CHAPTER 4
FINDINGS, ANALYSIS AND DISCUSSUONS
4.1 Feasibility Study in 7 Aspects
Major corporations take advantage of the opportunity to conduct a Feasibility
Study (FS) as a part of the strategies in this new project. Feasibility study is
an analysis and evaluation of a proposed project to determine if it is technically
feasible, if it is feasible within the estimated cost, and will it be profitable. FS
are almost always conducted where large sums are a stake. A feasibility study
aims to objectively and rationally uncover the strengths and weaknesses of an
existing business or proposed venture, opportunities and threats present in the
environment, the resources required to carry through and ultimately the
prospects for success. In its simplest terms, the two criteria to judge feasibility
are cost required and value to be attained.
A well designed feasibility study should provide a historical background of the
business or project, a description of the product or service, accounting
statements, details of the operations and management, marketing research,
policies, financial data, legal requirements or even environment, social and
risks condition. There are 7 (seven) aspects that have to understand and analyse
before running this project:
4.1.1 Operational Aspect
Operational feasibility aspect is the measure of how well a proposed
system able to solve the problems, and takes advantage of the
opportunities that have been identified during definition and
requirements.
PGN as the largest natural gas transportation and distribution company
in Indonesia, has about more than 7.000 km pipeline that still growing
52
and having plan to do expansion. And to minimize risks and to support
the operation of oil and gas and so that the installation, equipment and
techniques used in oil and gas mining operation, must be carried out
safety inspection. It could be great opportunities for PGN to take role as
a part of Service Provider for Inspection and Certification by optimizing
one of PGN Subsidiary – SENA (Solusi Energy Nusantara), and also
Other consideration why PGN should take this opportunity to do it
because PGN must have to comply with MIGAS Regulation that regards
to Installation and Equipment in Oil and gas activities shall be obligated
to carry out Work Safety Inspection, regarding to Regulation of Minister
of Mines and Energy No: 06.P/0746/M.PE/1991. Also based on The
Director General of Oil and Gas Decree No: 84.K/38/DJM/1998 about
Inspection Guidelines for Safety on Facilities, Equipment and
Technology Used in Oil and Gas and Geothermal Activity which stated
that installation and equipment need to be certified and recertified every
three years.
Besides PGN has already existing internal resources that already
competence and certified in doing inspection and certification to
installation and equipment in oil and gas activities. About 12 employee
of PGN who already certified as MIGAS Pipeline Inspector, and more
than 55% person of total PGN employees are Engineer background, it
means easy for PGN to running this business expansion as Inspection
and Certification Service Provider.
Seeing from the current condition above, it will be more efficient if the
work safety inspection is being done by internal resources itself. SENA
as one of PGN Subsidiary also must be able to develop their capabilities
so that they could able to operate this business. For SENA, doing and
being as an Inspection and Certification Service Provider is new thing,
they must be able to transform from current condition to expected
condition. But it also could be as an opportunity to broaden SENA
53
capability, experiences, be more exist as engineering services in the oil
and natural gas industry. SENA should optimize their current condition
either by collaboration in PGN Group or doing it by growing their
networking outside PGN Group. The three element for successful in
organizational transformation are focusing on People, Process and
Technology area.
a. People
In order to upsizing the competences of human resources, SENA
should build capabilities and expertise in inspecting and also
creating specialize carrier path. Since it is for corporate action,
SENA able to do collaboration with other entity on PGN groups and
supporting by Human Capital Division of PGN as a centralize policy
maker that related to human resources in PGN Group.
b. Process / System
Making a system that related to Inspection and Certification area.
Provide Procedure and Policy, Implementation instruction, and
others. As a part of process in operating this business area, SENA
must be able to build networking with Government and other
company in terms to get new market.
c. Technology
Build a technology related to Inspection and Certification of oil and
gas installation and equipment activities.
4.1.2 Legal Aspect
In order to obligate with regulation, legal aspect should be part of
consideration of SENA. There are several regulations that should be
notice if SENA would like to be inspection and certification services
provider :
54
1. Regulation of Minister of Mines and Energy No.:
05/P/M/Pertamb/1977 about obligations having construction
feasibility certifications for oil and gas platform near offshore
2. Regulation of Minister of Mines and Energy No.: 06
P/0746/M.PE/1991 about work safety examination on installation
and techniques used in oil and gas and exploitation of geothermal
resources
3. The Director General of Oil and Gas No.: 84/K/38/DJM/1998 about
guidelines and procedures for safety inspection on installation,
equipment and techniques used in the mining of oil and gas and
exploitation of geothermal resources
4. Letter of Director General of Oil and Gas number
234/382/DJM/1993 about technical inspection and testing of the
equipment installation and inspection services company
5. The Director General of Oil and Gas No.: 43.P/382/DDJM/1992
about requirements and procedures of the technical inspection
services company in oil and natural gas mining and the geothermal
resources.
6. Application for Technical and Gas Inspection Service Company
7. Related International Standard and Codes
All of the regulations above must be meet with the requirement and
provides by SENA. Detail information such as about procedures in
doing safety inspection, about requirement as service company in
technical inspection and others, already stated and must be comply by
SENA.
4.1.3 Technical Aspect
A business is considered technically and operationally feasible if it has
the necessary expertise, infrastructure and capital to develop, install,
55
operate and maintain the proposed system, and by establishing such a
system, the business will be able to deliver goods or services at a profit.
When considering a new business, it is important to consider if there is
sufficient access to resources. One of the primary reasons that new
business fails is under capitalisation, not enough money to keep the
business going from start up until it stars to make a profit. This able to
lead to a lack of resources.
In order to comply with government regulations particularly in oil and
gas related field of activities and project specifications as well as all
standard practices and the requirement for occupational safety on the
pipeline system and equipment to be installed, a qualified Inspection and
Certification Service Provider who shall have the role of surveillance on
the works and ensure the conformity to MIGAS and Customer
requirements. In order to comply with MIGAS regulations, SENA shall
obtain SKPP Certificates prior to commissioning of the entire project
system. There are several of technical aspect that should be prepare by
SENA before being inspection and certification service provider :
1. SENA shall be accredited by a recognized institution and be
compliant with the requirements of ISO 9000, ISO 18001, ISO
14001, 19-17020 KAN, SMK3PL and other quality, safety, health
and environmental management and project control standard and
requirements.
2. Shall be member of APITINDO (Asosiasi Perusahaan Inspeksi
Teknik Indonesia)
3. Shall have numbers of expert in doing inspection and certification
services, how many person that needed in operating as an inspector
per project. Manpower planning shall be prepared
4. Shall be expert in technical inspection procedures
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5. Shall be expert in knowledge of equipment list, inspection and Test
Plan (ITP) for which a work safety inspection is obligatorily carried
out
6. Shall understand about type of work that already / being installed of
constructed
7. SENA shall have recruitment and training plan for their resources
4.1.4 Competitors Aspect
There are numbers of competitors in inspection and certification service
provider, but only about 5 big competitors who still consistence
operating as this service provider. Seeing from the current condition of
PGN, problem statement and objective and situational background, PGN
supposed to take this opportunity since there are potential market in
Indonesia. SENA has strength in not only financial aspect (capital and
others) but also in resources. It’s not difficult for SENA to compete with
other competitors in this industry.
4.1.5 Environment, Social and Risk Aspect
Basically there is no specific environment and social issue in being
inspection and certification service provider, but the most important
thing is SENA must have knowledge and expert with regard to
installation and equipment in oil and gas mining activities shall be
obligated to carry out work safety inspection.
As an Inspection and certification service provider, SENA could be
facing numbers of risk that we already identified and also the mitigation
plan in managing this risks, they are:
57
Table 4.1. Risk Identification and Mitigation Plan
No Risk
Description Likelihood Impact
Risk
Level Mitigation Plan
1 Licenses is
not being
approved by
Dirjen Migas
Possible Fatal Extreme Coordinate and
approach to
regulators
2 High in
employee
turn over
Possible Moderate Medium Reaward and
appreciation to
employees,
People
development
3 Payment
delay by
customer
Rarely Moderate Low Creating payment
schedule
4 Loss of
opportunity
due to
competitors
Rarely Moderate Low Improving the
quality of service,
Creating different
features from
competitors
58
Figure 4.1 Risk Heat Map
Source : Based on PGN Risk Management Operating Procedures
4.1.6 Market Aspect
The potential market for this inspection and certification service
provider not only in PGN Group itself but also other oil and gas
(downstream, midstream like FSRU and upstream) including
geothermal company. As a projection we divided it in 5 years with
several area and calculating about 20% of each market as an pessimist
assumption (lowest assumption).
a. In Year 1 & 2 : the potential market is PGN Group Downstream. 1st
year about 20% PGN Pipeline and 15% PGN Equipment, and 2nd
year about 20% PGN Pipeline and 20% PGN Equipment
b. In Year 3 & 4 : the potential market is PGN Downstream and
Midstream, and also other entities outside PGN like geothermal
company. The percentage for each year similar to 1st and 2nd year,
additional with 50% FSRU and 5% of Geothermal as an introduction
Rar
ely
3, 4
Minor Moderate Major Catastropic
Po
ssib
le
2 1
Alm
ost
Ce
rtai
nLi
kely
Heat Map
59
c. In Year 5 : the potential market not only for PGN Group (since it
should be recertified in every 3rd years) but also other company
outside PGN.
4.1.7 Financial Aspect
To be Inspection and Certification Service Provider there is no needed
big capital at all, no needed special equipment, tools or technology. The
biggest asset to run this business is people. The calculation for
operational and capital expenses about 6,4 Billion IDR (detail financial
projection will be discussed bellows).
The several assumptions for financial aspect in being inspection and
certification service provider are :
a. Capital : Expenses on 1st year operational + 10%
b. Interest / month : 4,5%
c. Currency : IDR (In Million)
d. Total PGN Pipeline : 7.769 km
e. Potential Market : Captive Market (PGN Group) and Outside PGN
about 10% till 20% (as lower assumptions)
f. Annual Discount Rate : BI Rate + Inflation (6% + 5.5%) = 12%
g. Depreciation : 5 years
4.2 TOWS Analysis
TOWS and SWOT are the same acronyms for different arrangement of the
words Strengths, Weaknesses, Opportunities and Threats. By analysing the
external environment (threats and opportunities) and internal environment
(weaknesses and strengths), we could arrange the strategy for whole process
on the organization. Below the TOWS matrix of this inspection and
certification service provider project.
60
Figure 4.2 TOWS Analysis
Source : Internal Group Discussion
From the table above shown that there are internal and external factor that need
to be manage. Analysis is starting from external factor to internal
4.2.1 Threats (T)
We do realize that there are existing competitors who already playing in
this field business. It will able to create others threats that should be need
to prevent. Those kind threats are like:
a. New Entrants : considering to establish this company does not need
significant capital, makes other new entrants are interested to
participate in doing similar business
b. Customer Choice : since there are a lot of participant who play a role
as installation and certification service provider, it is easier to
customer move from one provider to another
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c. Price : the more player in this business, the more competitive price
of this services
4.2.2 Opportunities (O)
Even though there are several threats that should be face when entering
this business, there are also several opportunities that needs to be taken.
Moreover when we are seeing to the vision of President Republic of
Indonesia, focuses on the development of Indonesia, especially in the
leading areas of Indonesia. Means that infrastructure development will
be implemented continuously, it also wider the opportunities such as :
a. New Markets : New development means new market, and it means
new opportunity to get more potential market and get more profit
b. New Services : New development, new market, means new
opportunity to serve customer, we could create new services based
on customer needs
c. Alliances / Co-Branding : it also called brand partnership, could be
SENA’s opportunity to do an alliance to work together with other
party
4.2.3 Weakness (W)
Weakness usually comes from internal factors, regarding through the
interview and seeing the existing data several weakness are :
a. Experience : Since this business area is new things for SENA, SENA
still lack of experience, it will make them to be more tough to
compete with other parties
b. Skills/Technology : Lack of experience, means lack of skills.
c. Networking : Lack of experience, new things, lack of skills, means
lack of networking. They should be more fighting in terms of skills
and also wider the networking in this business area.
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4.2.4 Strength (S)
The strength of current condition of SENA are :
a. Existing Market : SENA already have existing market which is PGN
Group as a captive market
b. Existing Resources : SENA already have internal resources who
already certified as pipeline inspector
c. Existing Competences : Since already have internal resources who
already certified as pipeline inspector means the competences is no
doubt
d. Costumer Perspective : PGN already well-known in operating and
doing any pipeline or equipment infrastructure, the positive
customer perspective has been there
e. PGN Brand which has positive perspective from public, is an
advantage for SENA as a PGN Group
The next step of analysis is fit in the external opportunities and threats with our
internal strengths and weaknesses, as illustrated above.
a. SO : “Maxi-Maxi” strategy, that use strengths to maximize opportunities
In order to maintain the profit for company, SENA should catch non
potential market which means outside PGN. Seeing the opportunity of new
markets, SENA able to get it since they already existing resources who
competences and certified as inspector. The strategy as value added for
customer through helping them and giving advice in technical aspect, able
making SENA to be different that other competitors
b. ST : “Maxi-Mini” strategy, that use strengths to minimize threats
New entrants could be facing by SENA through their strengths in
competence resources, and positive customer perspective, by serving the
customer and focus to deliver great quality of solution product to either to
existing market or potential market outside PGN. It will also help SENA
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to face other threats like price competition and solve the customer choice
problem.
c. WO : “Mini-Maxi” strategy, that minimize weaknesses by taking
advantage of opportunities
Entering new markets, delivering new services and do some alliances /
partnership strategy with other parties will help SENA in solving their
weakness in lack of experience, lack of networking and technology.
Besides SENA able to build networking with government who play an
important role in running this business.
d. WT : “Mini-Mini” strategy, that minimize weaknesses and avoid threats
To be bigger company and well-known as inspection and certification
service provider, SENA have to set different pricing strategy, do some
benchmarking and continuously upgrading their skill and technology.
4.3 Financial Analysis
Through the financial assumptions above, we do some financial analysis
projection for 5 years on this project. Positive NPV (Net Present Value) that
we get by doing some calculation will make this project be more attractive and
showing the profitability of this project. The difference between the present
value of cash inflows and the present value of cash outflows, supported by the
fact that this project not needed significant capital at all, no specific investment
or even no specific tools needed. With 12% annual discount rate assumption,
positive NPV already shown at first year as long as the captive market able to
handle by SENA.
There is no up-front specific investment besides small inspection tools,
Personal Computer and some Notebook which is already provide at SENA in
this moment. The higher expenses is operational than capital expenses. SENA
should spend more expenses for their resources and training/development cost
to upgrade their resources skill to compete with other parties.
64
In the 1st year company operated, the management projected revenues in
pipeline about 11,614 IDR Bio and equipment about 2,048 IDR Bio, with total
operational and capital expenses about 7,295 IDR Bio, this project creating
about 5 IDR Bio at their 1st year. Having positive NPV already, with high IRR
about 20% making more desirable to undertake this project. Return on
Investment (ROI) ratio of this project at 1st year able to reach up until more
than 100%. A high ROI means the investment’s gain compare favourably to
its cost, and means the efficiency of this investment relating profits to capital
invested. Since the 1st year is the beginning year for company to operated,
means company have to spend quite much money. The Return on Equity
(ROE) ratio of this project at 1st years still below 100%, but it is still seeing as
a good business to be undertaken. The way company generate earnings growth
from the equity available and their performance in the same industry is feasible.
ROE at this 1st year is about 99%, while even only 15%-20% ROE are
generally considered good.
In the 2nd year company operated, based on management production and
strategy to get more market for generate more revenues, company projected
revenues in pipeline similar to the 1st year, since the length of total PGN
pipeline and equipment projection being ramp up until 3 years. It won’t be
able do at same time but have to do it continuously about 20%-25% of total
length of PGN pipeline and equipment. A higher ROI is predictable on this 2nd
year. About 127% ROI and 109% of ROE can be obtained. Operational
expenses still similar with 1st year since it is the important thing to be maintain
when running this business. Pipeline and equipment assumption on this year
still similar with the 1st year. But getting higher Net Profit about 10% than the
1st year.
In the 3rd year company operated, management believe that the company has
built a strong marketing, sales team, knowledge, experience, and has a strong
relation between company to regulator and between company and market. The
65
management looks for more profit in order to increase equity and company’s
value. Management optimistic able to get Net Profit 40% increase then
previous year, with ROI about 175% and ROE increase to 153%. It is
supported by management strategy to start entering not only in downstream
area but already in midstream area and getting outside PGN customer.
In the 4th year where the company is already being settle, mature and proficient
in doing this business, SENA able to generate net profit more than 100%, ROI
more than 350% and ROE about 300%. Actually having too big percentage of
ROI and ROE are not good enough, management should able to re-arrange
their strategy in terms of maintaining the company’s value added. Even though
captive market already being held by SENA, but they have to expanse to
outside PGN market. It is better for experience and sustainability growth of
company.
In the last year of projected financial analysis, company projected sales are
raised up by 13% from the previous year. Means that this business still able to
generate profit to company. Management confidence to keep operation
expense stable as the years before. Management argue that to keep expense
stable as previous years is logically can happen because there is no specific
depreciation cost that should be spend by company.
4.3.1 Return on Investment
We use the projected Return on Investment to analyse the efficiency of
an investment. This chart analysis shows that the level of profitability
of investment from 1st year till the 5th years are increasing.
66
Figure 4.3. Return on Investment
4.3.2 Return on Equity
We use the projected Return on Equity to measure of the profitability of
a business in relation to the book value of shareholder equity, it also
measure of how well a company uses investments to generate earnings
growth. This chart analysis shows that the level of profitability of equity
from 1st year till the 5th years are increasing
103% 127%175%
365%
718%
0%
200%
400%
600%
800%
Year I Year II Year III Year IV Year V
Return On Investment (ROI)
67
Figure 4.4. Return on Equity
4.3.3 Sales Projection
ROI and ROE above are obtained from sales. Management believe that
this project able to increase their sales in each years, like shown below
(in IDR Bio)
Figure 4.5. Sales
99% 109%
153%
313%
353%
0%
100%
200%
300%
400%
Year I Year II Year III Year IV Year V
Return on Equity (ROE)
13,663 14,345
18,471
30,910
34,068
0
10000
20000
30000
40000
Year I Year II Year III Year IV Year V
Sales
68
The sales are obtained from volume projection below :
Table 4.2 Volume Projection
The increasing sales trend shown that this project is very attractive, as
long as the management are implementing the strategies to prevent
threats and overcome weaknesses.
69
CHAPTER 5
CONCLUSIONS AND RECOMMENDATIONS
5.1 Conclusion
Based on the outcomes of the research and analysis from the previous chapter,
research conclusions can be drawn as follows:
1. Any installation and equipment for which a work safety inspection has
been carried out, shall be given an Installation Worthiness Certificate
(SKPI) and Equipment Worthiness Certificate (SKPP) by Directorate
General Oil and Gas
2. Installation Worthiness Certificate (SKPI) and Equipment Worthiness
Certificate (SKPP) should be recertified every 3 years
3. SENA as an Engineering Services have to delivering reliable engineering
solution in Oil and Gas Industry. Work Safety Inspection and
Certification Inspection function is part of business field as Engineering
Services that could become an opportunity for companies to generate
revenue continuously for the company.
4. Becoming Inspection and Certification Service Provider doesn’t need
any significant capital and infrastructure
5. ROI (Return on Investment) average projection that could be obtained
from this project between 100% and up to 7 times multiple. While ROE
(Return on Equity) average projection about 99% and up to 3 times
multiple.
6. SENA able to optimize the existing internal resources at PGN Group who
already certified as pipeline inspector in handling this business
7. SENA already have existing potential market and market from outside
PGN in order to generate profit for company and as one steps for
company enterprise.
70
8. Seeing from the financial projection that discussed on the previous
chapter, shown that this project is profitable with positive NPV and IRR
about 20%.
5.2 Recommendation
From the discussion of the previous conclusion, we recommend company to
use SO Strategies, ST Strategies and also WO strategies. We do believe if the
company able to apply those strategies, and also considering the external
factor, company able to gain big market share in Indonesia and generate profit
growth for the company.
Company also must be able to consistent in implementing the competitive
advantage that already implemented in PGN in order to achieve these
objectives.
Seeing from the projected financial statement of this project, provides a
positive impact on corporate value not only for SENA but also for PGN
Group. The strategies that we propose as below :
a. Recruitment and manpower planning program must be set up before
operated this business
b. Hire experience and competent who expert as a pipeline inspector to
strengthen the existing resources
c. Placing educated technician to each customers
d. Build the relationship and networking with regulator and other parties
e. Maintain on time delivery and excellent services
71
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exploitation of geothermal resources No.: 06 P/0746/M.PE/1991, Minister of
Mines and Energy, 1991.
APPENDIX 1
WORKLOAD
APPENDIX 2
EMPLOYEES & REMUNERATION
APPENDIX 3
NPV IRR
Description
annual discount rate 0.12
Initial cost of investment one year from today(7,004) (7,004)
Return from 1st year 5,573 4,976
Return from 2nd year 6,115 5,460
Return from 3rd year 8,591 7,670
Return from 4th year 17,541 15,661
Return from 5th year 19,796 17,675
NPV 1 27,984 44,439
NPV 2 31,341.96
Year Balance
0 (7,004)
1 5,123
2 10,839
3 19,020
4 36,561
5 61,864
Interest 12%
IRR in 5 years 143.61%
IRR in 2 years 66.24%
APPENDIX 4
NPV
IRR
Year Balance
0 (7,004)
1 5,123
2 10,839
3 19,020
4 36,561
5 61,864
Interest 12%
IRR in 5 years 143.61%
IRR in 2 years 66.24%
Description
annual discount rate 0.12
Initial cost of investment one year from today(7,004) (7,004)
Return from 1st year 5,573 4,976
Return from 2nd year 6,115 5,460
Return from 3rd year 8,591 7,670
Return from 4th year 17,541 15,661
Return from 5th year 19,796 17,675
NPV 1 27,984 44,439
NPV 2 31,341.96
APPENDIX 5
PAYBACK PERIOD
Year CF Balance
0 (7,004) (7,004)
1 5,123 (1,881)
2 10,839 8,958
3 19,020 27,979
4 36,561 64,540
5 61,864 126,403
PB 2.47 years
Year CF PV CF Balance
0 (7,004) (7,004) (7,004)
1 5,123 4,574 (2,430)
2 10,839 18,318 15,888
3 19,020 45,684 61,572
4 36,561 111,049 172,621
5 61,864 223,005 395,626
r 12%
DPB 1.65
APPENDIX 6
COST
Units FY16E FY17P FY18P FY19P FY20P FY21P
Material Cost
Headcounts
Employees Number - 7 13 13 16 16
Average Monthly Salary
Employees IDR/ month - 127 173 225 289 302
Employee Cost 0.00 0.01 0.03 0.04 0.06 0.06
Power & Fuel Cost IDR Mn - 82 86 90 94 99
Preparation Costs IDR Mn 42 - 8 - - -
Training & Development IDR Mn - 27 24 37 42 0
Office & Administration IDR Mn - 298 313 331 348 365
Total Costs USD Mn 42 406 431 459 484 464
APPENDIX 7
OPERATIONAL EXPENSES
CAPITAL EXPENSES
1 2 3 4 5
Remuneration Expenses 1,524 2,079 2,695 3,473 3,624
Office & Maintenance 3,574 3,574 3,574 3,574 3,574
Training & Development 320 288 448 504 559
Other Expenses 950 400 509 400 230
Total Volume 6,367 6,341 7,226 7,951 7,987
DescriptionYears
1 2 3 4 5
Notebook, PC, Tools 450 400 409 400 230
Total Volume 450 400 409 400 230
DescriptionYears
APPENDIX 8
PROFIT AND LOSS (in IDR Bio)
Revenues :
Pipeline 11,614 11,614 11,614 23,228 23,228
Equipment 2,048 2,731 2,731 2,731 3,414
FSRU Equipment 320 384 576
Geothermal Installation 3,805 4,566 6,849
Upstream Installation 5,337
Gross Profit 13,663 14,345 18,471 30,910 34,068
Expenses :
- Remuneration 1,524 2,079 2,695 3,473 3,624
- Training & Development 3,574 3,574 3,574 3,574 3,574
- Office & Maintenance 320 288 448 504 559
- Other Expenses 950 400 509 400 400
Operating Profit 7,295 8,004 11,244 22,959 25,911
Interest 4.5% 328 4.5% 360 4.5% 506 4.5% 1,033 4.5% 1,166
Profit Before Tax Benefit 6,967 7,644 10,738 21,926 24,745
Tax Benefit 20% 1,393 20% 1,529 20% 2,148 20% 4,385 20% 4,949
Net Profit 5,573 6,115 8,591 17,541 19,796
Items Year I Year II Year III Year IV Year V
GROUP FIELD PROJECT – ELEBAH MENYENGAT MEMBER TEAM :
Developing SENA as an Inspection and Certification Service Provider
1. IMRON2. JERNIH DEBORA SINAGA3. NITA WIDYASUMANTI4. SELO PURNA ATMANI5. SONDANG ARYANTO
1
Background
Problem Statement & Objective
Analysis (TOWS Matrix & 7 Aspect)
Conclusion
2
a) Delivering reliable engineering solution in Oil & Gas Industry
b) Kep. Dirjen. Minyak dan Gas Bumi Nomor : 84.K/38/DJM/1998, equipment
used in oil and gas industry shall be certified by MIGAS;
c) PGN has 7.769 km pipeline that need to be recertified every three years (re-
certification cost +/- 11,6 Billion Rupiahs/year);
d) PGN is still expanding infrastructure and facilities (+/- 1.053 km), that will be
needed to be certified as a compliance to the MIGAS Regulation;
e) PGN has Existing Resource. 3
4
a) SENA still depend on PGN as Holding Company.
b) Business Engineering Solution is More Competitive.
Making Profit From Developing Business and Potential Market.
Legal
Operational
Market
Financial
Technical
Competitors
Environment, Social, and
Politic (Risk)
5
OperationalExcellence
Current Condition : PGN Resources just have roles as
owner and contractor only. Limitedness roles for optimize
competence. Limitedness position for Specialize
Carrier Path
People: Optimizing productivity
of PGN HumanResources create values; Build Capabilities and
Expertise in inspecting; Specialize Carrier Path.
Process: PGN Resources have
more roles not just as anowner, and contractor,but Inspector also;
Technology: Build Technology;
Networking (Governance): Build Governance
Networking; Build Networking for
New Market.
Operational Excellence: Propose Inspection
Solution as SENAAdded Value; Asset Database more
organize; The confidentiality of
Asset Database moreprotected. Maintain Pipeline
Reliability.
Total Employees: 1.477 (+/- 55% Engineer Background)
Certified as MIGAS Pipeline Inspector : +/- 12
Expected Condition :
6
7
1. Per Men 05 / P / M / Pertamb / 1977
2. Regulation of Minister of Mines and Energy No. 06 P / 0746 / M.PE / 1991
3. Dirjen Migas No. 43.P/382/DDJM/1992
4. Dirjen Migas No. 84.K / 38 / DJM / 1998
5. Application for Technical and Gas Inspection Services Company
Regulations to the Certification in the Oil and Gas Company :
8
1. SMK3PL
2. ISO 18001, 14001, 9001:2000 Certification and 19-17020 KAN
3. Member of APITINDO (Asosiasi Perusahan Inspeksi Teknik Indonesia)
4. Numbers of Expert
5. Inspection Equipment List
6. Technical Inspection Procedures
7. Inspection and Test Plan (ITP)
8. Type of work that Already / Being Installed of Constructed
9. Training Plan
10.Recruitment Plan of Resources / Expert
Remaining Preparation of Inspection Services Company :
9
1. Indospec Asia2. TriHasco Utama3. Sucofindo4. Biro Klasifikasi Indonesia5. Titis Sampurna6. Radiant Utama Interinsco7. Depriwangga8. Carsurin Oil and Gas Services9. Devnusa Roga Planindo10.Kasnia Inspektindo11.Mafhindo Utama12.Marka Inspektindo Technical
(Marindotek)13.Sertco Quality14.Sertifikasi Raharja Indonesia15.Valarbi
Top 5 Competitors
Experience
Market Leader
Well Known By Costumer
Skill/Technology
Networking
10
Rare
ly
3, 4
Minor Moderate Major Catastropic
Poss
ible
2 1
Alm
ost
Cert
ain
Like
ly
Heat Map
No Likelihood Impact Risk Level
1 Possible Fatal Ekstrim
2 Possible Moderat Sedang
3 Rarely Moderat Rendah
4 Rarely Moderat Rendah
Risk Description
Licenses is not being approved by Dirjen MigasEmployee high turn over
Payment delay by customer
Market being take over by competitor
Extreme
Medium
Low
Low
11
20 % PGN Pipeline 15 % PGN Equipment
Year 1
20 % PGN Pipeline 20 % PGN Equipment
Year 2
20 % PGN Pipeline 20 % PGN Equipment 50 % FSRU 5 % Geothermal
Year 3
Recertification 20 % PGN Pipeline 20 % PGN Equipment 50 % FSRU 5 % Geothermal
Year 4
Recertification 20 % PGN Pipeline 25 % PGN Equipment 50 % FSRU 5 % Geothermal 1 % Upstream
Year 5
DownstreamPGN Group
Downstream & Midstream
PGN Group and Others
Downstream, Midstream & UpstreamPGN Group and Others
12
Assumptions: Capital : Expenses on 1st y + 10%
Interest / month : 4.5%
Currency : IDR (In Million)
Total Pipeline (PGN) : 7.769 km
Market : PGN Group and Non PGN (10% - 20%)
Annual Discount Rate : BI Rate + Inflation (6%+5.5%) = 12%
Depreciation : 5 Y
13
Net Profit : 5 BnROI : 103%ROE : 99%
Net Profit : 10% ROI : 127%ROE : 109%
Net Profit : 40% ROI : 175%ROE : 153%
Net Profit : 104% ROI : 365%ROE : 313%
Net Profit : 13% ROI : 718%ROE : 353%
0 year : Business Start Up- Licenses and Permit- Assets and Equipment- As a Business Unit (Part of
Subsidiary)
5th
Year5th
Year
4th
Year4th
Year
3rd
Year3rd
Year
2nd
Year2nd
Year
1st
Year1st
Year
NPV : Positive (± 24 Mn)IRR : 20 % Payback Period : 2,4 years
TOWSMATRIKS
Opportunities – O :1. New Markets2. New Services3. Alliances/Co-Branding
Threats – T :1. Customer Choice2. New Entrants3. Price
Strengths – S :1. Existing Market 2. Existing Resources3. Existing Competences4. Costumer Perspective5. PGN Brand
SO strategies :1. Non potential market2. Solution as value
added for customer
ST strategies :1. Create solution product
base on Costumer needs2. Focusing to deliver great
quality of solution product to existing market (PGN).
Weakness – W :1. Experience2. Skills/Technology3. Networking
WO strategies :1. Partnership strategy2. Networking with
government (Migas)
WT strategies :1. Benchmarking2. Different Pricing Strategy3. Upgrade skills/
technology on existing market (PGN).
14
15
Investment ExistingInternal
Resources
Existing Potential Market
Profitable
Feasible
Investment : 8 BnIDR Capex : 4 hnd IDR ROI :
103% < ROI < 700% ROE :
99% < ROE < 353%
Internal Certified Resources in PGN Group
PGN Group NP : 13% < NP < 120%
16
17
17
18
19
20
Current Condition : PGN as an Owner PGAS Solution as a
Contractor Others (3th Parties) as an
Inspection and Certification Service
Expected Condition : PGN as an Owner PGAS Solution as a
Contractor SENA as an Inspection
and Certification Service
21
22
Regulation Content
Per Men 05 / P / M / Pertamb / 1977 Kewajiban Memiliki Sertifikat KelayakanKonstruksi Untuk Platform Minyak Dan Gas Bumi Di Daerah Lepas Pantai
Regulation of Minister of Mines and Energy No. 06 P / 0746 / M.PE / 1991
Pemeriksaan Keselamatan Kerja Atas Instalasi, Peralatan Dan Teknik Yang Dipergunakan Dalam Pertambangan Minyak Dan Gas Bumi Dan Pengusahaan Sumber Daya Panas Bumi
Dirjen Migas No. 43.P/382/DDJM/1992 Syarat-syarat Dan Tata Kerja Perusahaan JasaInspeksi Teknik Bidang PertambanganMinyak dan Gas Bumi Dan PengusahaanSumber Daya Panas Bumi
Dirjen Migas No. 84.K / 38 / DJM / 1998 Pedoman Dan Tata Cara PemeriksaanKeselamatan Kerja Atas Instalasi, PeralatanDan Teknik Yang Dipergunakan Dalam Usaha Pertambangan Minyak dan Gas Bumi Dan Penguasaan Sumber Daya Panas Bumi.
23
1 2 3 4 5Pipeline 39 39 39 78 78
PGN Equipment 7 10 10 10 12
FSRU 1 1 2
Geothermal 13 16 24
Upstream 19
Total Volume 46 48 63 105 135
DescriptionYears
24
1 2 3 4 5Notebook, PC, Tools 450 400 409 400 230 Total Volume 450 400 409 400 230
DescriptionYears
1 2 3 4 5Remuneration Expenses 1,524 2,079 2,695 3,473 3,624 Office & Maintenance 3,574 3,574 3,574 3,574 3,574 Training & Development 320 288 448 504 559 Other Expenses 950 400 509 400 230 Total Volume 6,367 6,341 7,226 7,951 7,987
Description Years
25
Revenues :Pipeline 11,614 11,614 11,614 23,228 23,228 Equipment 2,048 2,731 2,731 2,731 3,414 FSRU Equipment 320 384 576 Geothermal Installation 3,805 4,566 6,849 Upstream Installation 5,337
Gross Profit 13,663 14,345 18,471 30,910 34,068
Expenses :- Remuneration 1,524 2,079 2,695 3,473 3,624 - Training & Development 3,574 3,574 3,574 3,574 3,574 - Office & Maintenance 320 288 448 504 559 - Other Expenses 950 400 509 400 400
Operating Profit 7,295 8,004 11,244 22,959 25,911 Interest 4.5% 328 4.5% 360 4.5% 506 4.5% 1,033 4.5% 1,166
Profit Before Tax Benefit 6,967 7,644 10,738 21,926 24,745 Tax Benefit 20% 1,393 20% 1,529 20% 2,148 20% 4,385 20% 4,949
Net Profit 5,573 6,115 8,591 17,541 19,796
Items Year I Year II Year III Year IV Year V
26
FY17P FY18P FY19P FY20P FY21P
Arus Kas dari Aktivitas OperasiPenerimaan pelanggan (dari pihak ketiga) - - 3,805 4,566 12,186
Penerimaan pelanggan (dari PGN) 13,663 14,345 14,665 26,343 27,218
Pembayaran untuk beban usaha dan aktivitas operasi lainnya (4,844) (4,262) (4,531) (4,077) (4,133)
Pembayaran bunga (328) (360) (506) (1,033) (1,166)
Pembayaran kepada karyawan (1,524) (2,079) (2,695) (3,473) (3,624)
Pembayaran untuk pajak (1,393) (1,529) (2,148) (4,385) (4,949)
Arus Kas Bersih dari Aktivitas Operasi 5,573 6,115 8,591 17,941 25,532
Arus Kas dari Aktivitas InvestasiPenambahan Aktiva Tetap (450) (400) (409) (400) (230)
Arus Kas Bersih dari Aktivitas Investasi (450) (400) (409) (400) (230)
Arus Kas dari Aktivitas PendanaanHasil Pinjaman Shareholder Loan - - - - -
Arus Kas Bersih dari Aktivitas Pendanaan - - - - -
KENAIKAN BERSIH KAS DAN SETARA KAS 5,123 5,715 8,182 17,541 25,302
KAS DAN SETARA KAS AWAL TAHUN SEBELUM PENYESUAIAN - 5,123 10,839 19,020 36,561
KAS DAN SETARA KAS AKHIR TAHUN SETELAH PENYESUAIAN 5,123 10,839 19,020 36,561 61,864
DESCRIPTION
27
Units FY16E FY17P FY18P FY19P FY20P FY21P
Material CostHeadcounts
Employees Number - 7 13 13 16 16
Average Monthly SalaryEmployees IDR/ month - 127 173 225 289 302
Employee Cost 0.00 0.01 0.03 0.04 0.06 0.06
Power & Fuel Cost IDR Mn - 82 86 90 94 99
Preparation Costs IDR Mn 42 - 8 - - -
Training & Development IDR Mn - 27 24 37 42 0
Office & Administration IDR Mn - 298 313 331 348 365
Total Costs USD Mn 42 406 431 459 484 464
28
Descriptionannual discount rate 0.12
Initial cost of investment one year from today(7,004) (7,004)
Return from 1st year 5,573 4,976
Return from 2nd year 6,115 5,460
Return from 3rd year 8,591 7,670
Return from 4th year 17,541 15,661
Return from 5th year 19,796 17,675
NPV 1 27,984 44,439 NPV 2 31,341.96
Year Balance0 (7,004)
1 5,123
2 10,839
3 19,020
4 36,561
5 61,864
Interest 12%IRR in 5 years 143.61%
Year CF Balance 0 (7,004) (7,004)
1 5,123 (1,881)
2 10,839 8,958
3 19,020 27,979
4 36,561 64,540
5 61,864 126,403
PB 2.47 years
Year CF PV CF Balance 0 (7,004) (7,004) (7,004)
1 5,123 4,574 (2,430)
2 10,839 18,318 15,888
3 19,020 45,684 61,572
4 36,561 111,049 172,621
5 61,864 223,005 395,626
r 12%DPB 1.65
29
Year I Year II Year III Year IV Year V
Growth 0 10% 40% 104% 13%
ROI 103% 127% 175% 365% 718%
ROE 99% 109% 153% 313% 353%
30
NO JABATAN RATE GAJI/BULANTOTAL REMUNERASI
PER TAHUN
TOTAL BIAYA REMUNERASI
TAHUN PERTAMA
TOTAL BIAYA REMUNERASI
TAHUN KEDUA
TOTAL BIAYA REMUNERASI
TAHUN KETIGA
TOTAL BIAYA REMUNERASI
TAHUN KEEMPAT
TOTAL BIAYA REMUNERASI
TAHUN KELIMA1 General Manager Inspection 30,000,000.00 426,840,000.00 426,840,000.00 448,182,000.00 469,524,000.00 490,866,000.00 512,208,000.00 2 Tenaga Ahli 20,000,000.00 284,600,000.00 569,200,000.00 597,660,000.00 939,180,000.00 1,309,160,000.00 1,366,080,000.00 3 Tenaga Inspektor 9,000,000.00 128,400,000.00 256,800,000.00 539,280,000.00 564,960,000.00 738,300,000.00 770,400,000.00 4 Tenaga Admin Teknik 7,000,000.00 100,000,000.00 100,000,000.00 210,000,000.00 330,000,000.00 460,000,000.00 480,000,000.00 5 Tenaga Admin Umum 5,000,000.00 71,600,000.00 71,600,000.00 75,180,000.00 157,520,000.00 164,680,000.00 171,840,000.00
Grand Total 71,000,000.00 1,424,440,000.00 1,870,302,000.00 2,461,184,000.00 3,163,006,000.00 3,300,528,000.00
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FY17P FY18P FY19P FY20P FY21PPipe Line 1 1 2 2 2Equipment 1 1 1 1 1FSRU 1 1 1GeoThermal 11 Team 2 orangTotal manday/tim/year 288 DaysDays / Pipeline Spread 4 DaysDays / Equipment-FSRU-Geo 2 DaysPipeline 72 SpreadEquipment 144 UnitFSRU 144 UnitGeoThermal 144 Unit
Description Team