Intrepreneurial Challenges and Opportunities, and Their Impacts to Bakrie Group

Transcription

1 Intrepreneurial Challenges and Opportunities, and Their Impacts to Bakrie Group Indra Ginting Presented before Bakrie HR Conference 2018

2 Exponential Changes Internet of thing Big data Artificial Intelligence

3 Our Manufacturing 2.0? Internet of thing Big data Artificial Intelligence

4 Our Manufacturing and Innovation Disruptive Innovation Problem is not well understood New Market Innovation is dramatic and game changing Customer doesn t know Market is unpredictable Traditional business methods are fail Sustaining Innovation Problem is well understood Existing Market Innovation improves performance, lower cost, incremental changes Customer is believable Market id predictable Traditional business methods are sufficient

5 S-Curve & Disruptive Innovation

6 Transformation BNBR Reinvented

7 Incremental vs Disruptive Innovations New BNBR: - Consolidate manufacturing business units - Grow infrastructure division - Venture into new line of business(es), innovation and technology as the theme

8 Automotive Component Cement Based Building Material Metal Based EPC Transformation of the Units BMI Bakrie Industries (BI) Competitiveness. Adopt new technology and lead in innovation. BBI BA BMI BBI BA New Ventures Organic and Inorganic growth New products. Increase value chain of each unit. Consolidation in financing activities to ease of fund raising. Channeling resources throughout units. 8

9 Business Opportunities Case Analysis Software E-Commerce Traditional Infrastrcture Traditional Manufacturing Consumer Goods New Manufacturing New Energy Investment Required Chances of Success Return for Successful Firm Story Value Free Cash Flow BNBR Presence 9

10 Bakrie Autoparts BA BA NOW 1. BA has been a dominant player in metal foundry and machining for supplying OEM commercial vehicle for more than 30 years. 100,000, Major customer is Mitsubishi, Hino, and others. 3. BA is not cost competitive in light of old production equipment, no major capex for modernizing the line. 4. BA is producing heavy machineries and agriculture machineries parts. 5. USD 38.7 million Revenue in Sad BA REINVENTED -Precision Parts Producer- 1. BA will be more competitive by installing the new line of production. 2. Expanding the capacity in commercial vehicle and 2 wheels by an acquisition. 3. Expanding the product portfolio for OEM passenger cars and agriculture equipment s components. 4. Diversify its line of business to high precision machining to produce aircraft components. 5. Expanding the business in commercial vehicle (sole distributor in Indonesia). 6. USD 362 million of revenue in

11 Bakrie Building Industries BBI BBI NOW 1. Producing marginal return in cement-based building materials. 2. The competition is scattered which logistic and production location are the main key factor. 3. Has many loyal distributors and very strong existence in western part of Java and southern Sumatra. 4. Generate USD 45 million Revenue in Sad BBI REINVENTED -Products For a Better Life- 1. Diversify the products into noncement and high-value-added products. 2. JV with strategic partner for cement based product. 3. Entering into the integrated logistic business and e-marketplace for building materials. 4. Expanding the line of business into glass packaging. 5. USD 357 million of revenue in

12 Bakrie Metal Industries BMI BMI NOW 1. Focusing on EPC businesses. 2. Also focusing on steel fabrication. 3. Has strong existence in steel fabrication, bridge construction and EPC works in Indonesia. 4. USD 40.6 million revenue in 2016 Sad BMI REINVENTED -Integrated EPCI Solutions- 1. Increasing the EPCI capability. 2. Ship building, and ship repair and maintenance. 3. Strategic alliances to grow the business. 4. USD 416 million of revenue in

13 Bakrie Pipe Industries Group BPI & SEAPI BPI & SEAPI NOW 1. BPI has more than 55 years as the dominant ERW steel pipe producer in Indonesia for 0.5 inch to 48 inch diameter pipes. 2. BPI has a strong reputation in oil & gas industry but weak in general market. 3. But BPI cannot be competitive globally with high steel input costs and old equipment (no capex for many years). 4. BPI is highly relying on the local content regulations. 5. USD 71.6 million revenue in (notes: USD 220 million revenue achieved in 2014) Sad BPI & SEAPI REINVENTED -Pipes and Accessories- 1. BPI expands steel pipe capability with spiral pipe wider product range. 2. Expanding to non-steel pipe via HDPE pipe. 3. Expanding to upstream product by developing rolling mill. 4. BPI will add pipe accessories to its oil & gas client base. 5. USD 483 million of revenue in

14 Bakrie Indoinfrastructure Group BIIN BIIN NOW Portfolio consist of: 1. Toll Road (26 km). 2. Gas Transmission Pipeline (200 km). 3. Coal Fire Power Plant (total 1,320 MW). 4. Geothermal Power Plant (total 195 MW). BIIN REINVENTED - Operating Indonesia s Infrastructure- Portfolio consist of: 1. Toll Road (220 km). 2. Oil & Gas Logistic & Energy Provider (LNG terminal and Transmission Pipeline (380 km)). 3. Coal Fire Power Plant (total 2,340 MW). 4. Renewable Energy Power Plant (total 1,295 MW 600 MW solar, 300 MW hydro, and others) 14

15 Multi Kontrol Nusantara MKN MKN NOW 1. MKN has a thin margin business in telco and multimedia sectors. 2. MKN currently is quite prudent for new investment, unless that investment give secured return/margin. 3. Doing project based business with a predetermined return. 4. Just average player industry, have no product be no.1 in industry. 5. USD 11.4 million Revenue in Sad MKN REINVENTED -Technology That Works For You- 1. MKN expands to power generation solution business. 2. IOT and M2M Operator 3. Consolidate illegal pay TV become single entity to be IPO. 4. Android based PayTV 5. USD 329 million of revenue in

16 New Ventures Bakrie Mina Bahari BAKRIE FISHERIES NOW New Ventures Fish for Health Fish for Wealth Sad BAKRIE FISHERIES REINVENTED - Build Sustainable Fisheries - 1. Fish trading domestic and international (trading volume 9,000 tpa). 2. Fishing (catching volume 39,000 tpa). 3. Integrated fishery zone: Ports. Integrated cold storage. Hatcheries. Processing units. Power plant. WWTP (Water and Waste Treatment Plant). 16

17

18 The times there are a changing We are experiencing a fundamental change in our economy In fact, this will only be the fourth type of economy we have experienced, we need to prepare for disruption in our lives. A transitional economy will not be without lost jobs, decreased wages, and other losses due to the impact of technology. Change is not always bad, but the transition is also not without a little discomfort. There are two choices on how to respond to the transition: Complain, do nothing, and be left behind. Adapt, develop new skills, and find your opportunities in the new technology economy. Opportunity to prosper in the new economy will be there, but it is going to require us to change our ways. The only way to keep up is to continue to learn.

19 1964 Bob Dylan Come gather 'round people -- Wherever you roam-- And admit that the waters-- Around you have grown-- And accept it that soon-- You'll be drenched to the bone-- If your time to you Is worth savin -- Then you better start swimmin -- Or you'll sink like a stone-- For the times they are a-changin'.

20