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Antam's new boss plans massive cost-cut measure
Tedy Badrujaman - Antam
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Tedy Badrujaman - Antam.com
State-owned diversified miner PT Aneka Tambang (Antam) is set to roll out a series of efficiency measures this year in an effort to improve its finances, its new boss said.
Speaking after an annual general shareholders' meeting on Tuesday, Antam newly elected president director Tedy Badrujaman said it was looking to save more than Rp 16 billion (US$1.22 million) from the efficiency measures.
'We try to save about that much money every year from various efficiency measures. Measures will include, getting higher fuel discounts, replacing some raw materials with other components and renegotiating existing contracts,' Tedy, who succeeded former boss Tato Miraza, told reporters.
In terms of fuel, Antam has so far secured a 13 percent discount from state oil and gas company Pertamina. The discount is expected to rise to 15 percent this year, as business talks continue between the two firms.
Tedy, formerly Antam operations director, declined to say specifically how much his company could save from the fuel discount.
The miner's latest financial report showed that it recorded Rp 8.1 trillion in total production costs last year. Fuel and material expenses were listed as the second- and third-largest expenses ' with the purchase of precious metals being the largest expense ' among all the production costs.
While fuel accounted for Rp 1.27 trillion or 15.6 percent of the costs, materials made up Rp 944.67 billion or 11.7 percent of the total.
The efficiency measures are crucial for improving Antam's finances, especially after the publicly listed company posted a net loss of Rp 775.29 billion in 2014, as opposed to the Rp 409.94 billion net profit it booked just a year ago.
Antam previously attributed its misery to both the 2009 Mining Law that banned exports of raw minerals and also the falling commodity prices that ultimately hurt its sales.
At present, Antam's products consist of ferronickel, nickel ore, gold and other minerals, such as silver and bauxite. Gold has been the major sales driver since 2011, taking over ferronickel as its number one commodity.
Meanwhile, as reported before, the company has several projects underway to diversify its product line and improve its finances, including plans to develop new ferronickel and alumina projects.
Antam is now looking to produce alumina through its Mempawah Smelter Grade Alumina and Tayan Chemical Grade Alumina projects. Both projects are located in West Kalimantan.
According to Aloysius Kiik Ro, Antam's newly appointed finance director, the company expected to generate about Rp 5.38 trillion from its upcoming rights issue to partly finance the projects.
