T

he country'€™s largest tin producer Timah is looking to raise the contribution to its revenues of its non-tin businesses to around 50 percent in the next four years. The move comes as the company'€™s bottom line has been hit by plunging tin prices over the last few years.

Timah president director Sukrisno said during a press conference on Thursday that the state-run firm was keen to increase its non-mining income to half of the company'€™s total revenue by 2019, on the back of the company'€™s soon-to-commence rare-earth minerals mini facility, hospital and property businesses.

Sukrisno said non-tin revenue currently accounted for only around 5 percent to the company'€™s revenues, but he was hopeful that Timah could boost that to 15 percent by the end of the year, and raise it further in subsequent years.

'€œWe will not rely only on tin but we will resort to business diversification, and we will have a tin and non-tin contribution of 50:50 by 2019. We are in a five-year program to achieve that goal,'€ he said, referring to the company'€™s venture into the hospital and rare-earth sectors that it had prepared since last year.

'€œWe are also making our entry into the property business, which will start generating revenue this year,'€ he added. Timah is set to develop an idle asset '€” a 176-hectare site located in Bekasi, West Java '€” into a mixed-use compound, partnering with state-run builders Wijaya Karya and Adhi Karya. The project, as previously reported, will cost around Rp 1 trillion (US$77.1 million).

The company is also looking to commercialize its hospital '€” located in Bangka Belitung Islands and which has previously been run by the company'€™s foundation '€” having cooperated with Pertamina Bina Medika to renew the hospital'€™s medical equipment. The company has allocated around Rp 200 billion for the hospital project. Timah is building up a mini rare-earth plant within its production facility in Bangka Belitung. Rare earths are mineral elements used in the production of many everyday devices, such as cell phones, magnets and cars.

It is looking to complete the plant'€™s construction in April with commercial operations expected to begin in August. When completed, the plant will have a production capacity of 50 kilograms per day.

The mini plant is a pilot project for Indonesia'€™s first rare-earth production. Sukrisno said if the project ran well, the company would start preparing the construction of the main facility in 2017.

'€œRare-earth [elements] are worth 10 times more than tin, and it will be very profitable for us especially at a time like this,'€ Sukrisno said.

Tin has been the worst performing industrial metal on the London Metal Exchange this year after sliding 20 percent amid rising supplies from Myanmar and China, Bloomberg reported on Wednesday. Timah saw its average selling price (ASP) slump by 19 percent on an annual basis to $18,900 per ton during the first quarter.

Its first-quarter production went up by 37.08 percent year-on-year to 7,057 tons, while its sales grew by 22.8 percent to 5,304 tons as the company held sales volume to counter oversupply. As a result of the plunging prices, the company recorded a net loss amounting to Rp 19.1 billion in the first quarter of the year, compared with Rp 95.02 billion of net profits it made in the same period last year, a newly published financial statement revealed.