Business

Parts and services to lead
United Tractors growth

Publicly listed heavy-equipment distributor PT United Tractors (UNTR) plans to further boost its maintenance services in order to maintain growth as equipment sales decline.

The company expects that the sale of spare parts and maintenance services will increase this year as many of its clients, mostly mining companies, have delayed purchases of new equipment as part of their strategy to reduce the impact of the fall in commodity prices.

 UNTR director Iman Nurwahyu said that spare-part sales and maintenance could reach about Rp 10 trillion (US$1.03 billion) this year, a 38 percent increase from Rp 7.2 trillion last year.

“This year, they will contribute around 30 to 35 percent to the company’s total revenues,” Iman said.

The company sold 6,202 units of heavy equipment last year, a 26 percent drop compared to 8,467 units in 2011. This year, UNTR expects to sell only around 5,000 units.

UNTR president director Djoko Pranoto said that his company estimated that the country’s heavy-equipment market would slow by 10 percent this year compared to a total demand of around 14,000 units in 2012. UNTR’s sell their Japanese-brand Komatsu products mostly to mining companies, particularly coal miners, which have suffered from a free-fall in coal prices last year in the face of a weakening global economy.

Djoko said that UNTR saw something of a recovery in sales in the first quarter of the year compared to the last two months of last year.

“There was an increase of about 50 percent. During the January-to-March period, average sales reached 400 units per month, compared to 200 units in the last two months of 2012,” Djoko said.

However, UNTR’s sales in the first quarter of the year declined by around 30 percent compared to the same period last year, according to Djoko. He said the company expected more sales to the forestry sector this year, particularly sales of a new excavator product called the PC200-8 New Generation.

“Our market share in the forestry sector dropped last year. Now, we have the PC200 and hope we can grab a bigger share of the forestry heavy-equipment sector this year,” Djoko said, adding that the company expected to increase its share of this market to 40 percent by year’s end from 38 percent last year.

In the national heavy-equipment market, UNTR expects to maintain its market share of around 44 percent by the year-end.

Besides expanding its heavy equipment sales to non-mining sectors, UNTR is also working on coal transportation to support its own mining business. UNTR, through its subsidiaries, now has seven coal-mining concessions in Kalimantan and Sumatra with total combined reserves of 424 million tons.

Last June the company, through its wholly owned subsidiary PT United Tractors Pandu Engineering, acquired a stake in PT Perkasa Melati, a shipyard business in Batam, Pekanbaru, Riau. Perkasa Melati is expected to support UNTR’s business of coal transportation through another subsidiary PT Patria Maritime Industry, which is based in South Kalimantan.

“This year, we want to launch tug-and-barge sets,” UNTR director Loudy Irwanto Ellias said.

Paper Edition | Page: 13

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