Industrial gas has a promising outlook. Who doesn't need gas? Oxygen is needed by hospitals to take care sick people, nitrogen keeps your chips crisp till you tear the bag, car makers use acetylene for welding, and so on. As the economy grows, demand for industrial gases rises. Despite being the biggest player in the industry, the Samator group is innovating to maintain its leadership.
Through its wholly owned companies, PT Samator and PT Aneka Gas Industri, it now holds almost 50% of the market with estimated sales of almost Rp 2 trillion combined. His two closest competitors are multinational firms, France's Air Liquide and Germany's Linde group. “Competition is getting tougher and tougher,” says Rachmat Harsono, executive vice president of corporate finance and strategic planning for Samator, who is the son of Arief Harsono, the group's founder. Samator group started in 1975. Its name comes from the name of the capital of East Kalimantan, Samarinda, and Toraja, an area in South Sulawesi. Arief had the idea to start the company while traveling between these two places.
Industrial gases are made using processes that are complex and capital intensive, and require highly skilled staff, thus making barriers to entry high for new players. Rachmat says some producers have recently dropped prices to gain market share. “The latest technology is more efficient, so costs can be lowered. But we rely heavily on electricity and electricity prices have increased. So when the price of industrial gasses is going down in the market, it is actually not healthy for the industry,” Rachmat says.
So far, Samator has managed to stay ahead of its rivals. For example, Aneka Gas Industri sales are now Rp 800 billion or eight times from when the group first took over the company in 2004. Aneka Gas's assets also grew from Rp 300 billion to Rp 2.5 trillion. These results came from improving operating efficiencies and the company's management system.
Rachmat is keeping up the pace. To expand market share, Samator is introducing new ways to measure gas usage and offering new products. For example, it found a new way for farmers to open candlenuts by using liquid nitrogen. In the old method, candlenuts had to be opened one by one. Now an entire batch of candlenuts can be opened by dipping them in liquid nitrogen.
The group is also distributing more efficient and more environmentally friendly mixed CNG products to replace argon for welding. “We ask our customers what can we do to help them grow, and what kind of gases they need for their next product line,” he says. The group is also using new technology to monitor customer's tank levels in their tanks. “Before customers ask, we could proactively offer to refill the tank. It also makes us more efficient since we know about other tanks that need to be filled near the first tank, so we can fill several tanks in one delivery,” Rachmat explains.