Surviving the Slump
    Category: Companies & People By : Gloria Haraito Read : 3862 Date : Tuesday, August 06, 2013 - 06:22:10

    Ahmad Zamroni / Forbes Indonesia

    Despite the slowdown in the coal sector, miner PT Resource Alam Indonesia is still holding its own. In its first quarter, Resource Alam booked revenues of $54.6 million, about equal with $54.3 million in the last first quarter, with a net profit of $5.4 million, about half of the $10 million in first quarter 2012. Those figures are just fine for Pintarso Adijanto, president director of Resource Alam: “Our net profit margin was still 10%.”

    This attitude has meant that Resource Alam is a survivor in an industry that has been under pressure. Pintarso, whose family owns a majority of the company's shares, believes that the slump in coal prices is only temporary. To that end, he is buying more coal mines while prices are depressed, and last year acquired two concessions, a 60% stake in a mining company in Central Kalimantan for $3.7 million, and a 75% stake in a mining company in East Kutai for $2 million. To maintain margins, Pintarso is focused on efficiency. “Many coal companies may have to stop production due to declining prices unless they become more efficient. I plan for our company to survive,” says Pintarso. Last year, the company was recognized with a slot on Forbes Indonesia's Best of the Best list and also on Forbes Asia's Best Under a Billion list.

    Pintarso comes from an entrepreneurial family. His late father was a serial entrepreneur, starting first as a vegetable trader in Pontianiak, then moving into rubber processing. “When I was a child, my father often brought me to the rubber processing plant during weekends. For me, it was like a vacation,” says Pintarso, 56, the fifth of seven siblings. These trips were also entrepreneur training for Pintarso and his brothers.

    Their father entered the timber and plywood business in 1967. That business rapidly grew, until the family had eight plywood and timber mills, held under the Bumi Raya Utama group. Pintarso's father extended Bumi Raya Utama into cassava plantation, granite and real estate.

    The father founded Kurnia Kapuas Utama Glue Industries in 1981, whose name was changed to Resource Alam in 2003. Pintarso spent his entire career at the company. After getting a civil engineering degree from University College London, he worked as a cashier and machine operator before becoming the president director in 1993, after the listing of the company in 1991.

    Despite the family ownership, Pintarso likes to have professional managers at the helm, with himself and his brother Swandono Adijanto as commissioners. When the government put restrictions on the timber industry in 1990, Pintarso looked for another industry with better growth prospects, and picked coal. He started buying coal concessions in 1997. “I saw coal had potential and my dad agreed with my idea to transform the business into coal mining,” says Pintarso.

    That plan had to take a back seat to debt repayment after the financial crisis hit in 1998, causing the company's debt to rise from $5 million to $20 milllion. After taking care of the debt, the family decided to begin producing coal in 2005, exiting the timber business completely in 2006.