GENERAL OVERVIEW

Company Profile
PT. Sintas Kurama Perdana is the first manufacturer of formic acid and the only one in
Indonesia, built to meet the needs of formic acid market in the country that were previously very
dependent on imported products.

Mission and Vision

Vision: Becoming efficient, competitive, and dominant company in domestic market, and
undertaking to increasing companys value
The company's vision is formulated based on the objectives desired by the stakeholders of the
company, one of the shareholders. These stakeholders have a desire to Sintas can be a company
with a market share of formic acid in Indonesia with a quality product. The company's vision is
realized by Sintas resource management-owned resources company, ranging from raw material
resources to the competence of human resources working in the company, as efficiently as
possible with the objective to enhance shareholder value.
This vision is in line with the company two years back. Although not significant, but the
company managed to increase the value of the company described by the total profit produced by
the company each year, as well as the views of financial ratios of the company.
Mission: Support domestic industries and reduce dependence on the product import,
Maintaining safety and environmental health, Maximizing the added value for shareholders,
customers, employees, and other stakeholders.
The points contained in the company's mission is still not well explain why a company exists.
Sintas indeed established as one of the efforts to meet the needs in Indonesia formic acid and
formic acid reducing import quotas from abroad. But in the second point, there is irrelevance
between the mission and the specific circumstances of the company. If the mission of the
company linked to financial performance over the last two years, the mission of the company has
been run by the company though not optimally.

Current Performance
In 2012, PT Sintas Kurama Perdana had a net profit of Rp 4,844,432,931. The amount of this net
profit exceeded the budget targets which had been developed previously by 102.71%. In
addition, PT Sintas Kurama Perdana also managed to double the total realization of net profit in
2012 amounted to 276.77% compared with the actual total net profit booked in 2011 when the
company yesterday.
Formic acid production in 2012 reached 8072.58 tons, demonstrating the better performance of
the production budget amounted to 7,900 tons. Exceeding the target of production is due to the
minimization of the amount of down time as well as the repair and replacement of equipment
factory so that production capacity can be maximized.

In the field of marketing, sales target was exceeded in the year 2012. Formic acid sales volumes
(in tonnes) reached 9074 tons, of which the company is targeting sales volume in 2012 of 9,000
tons. Realization of Cost of Goods Sold (COGS) also showed a good performance compared
with the budget, this is due to the high stock of the end of 2011 and their efficiency.
After a thorough audit conducted by Public Accountant independent, KAP Djoemarna,
Wahyudin, and Partners, the financial position of the company presented in the Financial
Statements of the Company by the opinion "unqualified" to the soundness of companies included
into the category of "AA" or "Healthy ". In 2013, Sintas make the turn chief executive. One of
the main responsibilities of the chief executive Sintas is to improve the company's performance
to be better from year to year in accordance with the wishes of the shareholders of the company.
Macroeconomic conditions in Indonesia in 2013 were quite volatile making enterprises should
promptly adjust the internal conditions of the company with the business climate in Indonesia.
Factors foreign currency exchange rates sufficient to influence the decisions Sintas export sales
abroad because the company had to calculate back the right price for export sales.
The selling price of exports in 2012 reached $ 830 / ton in accordance with the predictions of the
company as stipulated in the Work Plan and Budget (CBP). However, the Indonesian economy is
still not stable coupled with the drop in the exchange rate of Rupiah make Sintas reducing its
export sales quotas and focus more on formic acid sales to the domestic market throughout the
year 2013.
During the month of July-August, 2013, PT Pupuk Kujang, CO gas main supplier for the main
raw material production of formic acid, conduct the Annual Improvements which causes the gas
supply CO to Sintas becomes obstructed. Factory Sintas undergo shut down for a while so that
production halted for several weeks.
SINTAS anticipation of the cessation of production activities to continue to intensify the sale of
inventory on hand at the company's warehouse. Expanded distribution channels with the aim to
sell formic acid to areas not yet covered thereby increasing market share Sintas in Indonesia.
Potential rubber and rubber processing industry in Indonesia is still growing can be utilized by
Sintas to sell its products to companies engaged in the industry.

Financial Performance
Ratio

Percentage
Change

Gross
Profit
Margin

-17.60%

Profitability Ratio
Interpretation of the
Ratio Definition
Change
The higher this ratio,
Comparing between
the better because the
net sales minus cost
more margin can be
of goods sold by the
used by companies to
selling rate
cover the load and still
make a profit.

97.330025

Shows the rate of

return the company
over the use of assets
owned.

The higher the ROI,

the better for the
company.

149.12%

This ratio describes

the rate of return of
the investment made
by shareholders
against the company.

Generally, the higher

the ratio the better.

176.77%

Is an analytical tool
company
profitability using
conventional income
concept.

EPS increased ratio

shows the ideal
company.

67.43%

Used to measure the

net profit after tax
compared to the
sales volume.

The higher the ratio the

better.

Operating
Profit
Margin

35.15%

To demonstrate the
company's ability to
generate profit
cooperative
compared with the
sales achieved.

In general, the higher

this ratio, the better.

Return on

165.67%

Is a measurement of

The higher the ratio the

Return on
Investmen
t

Return on
Equity

Earnings
per
Share

Net Profit
Margin

Implication to the
Company
The higher this ratio, the
better because the more
margin can be used by
companies to cover the
load and still make a
profit.
In 2012, ROI has
increased almost 2x that
of the previous year, the
company showed very
effective in using assets
to generate profits.
In 2012 the company's
ROE of 15.52% which
means that shareholders
obtain a refund of 15.52%
of every penny of
investment in the
company.
Ideally EPS increased
from year to year, and
this indicates that PT.
Sintas able to provide
better levels of prosperity
to the shareholders.
NPM companies in 2012
amounted to 5.94%
indicating that the
company gets 5.94%
profit after taxes of every
penny of income of the
company.
Operating profit margin
increased from 2011 to
2012 shows the
company's ability to
generate operating profits
compared with the sales
achieved the better.
Return on total assets
2

Total
Asset

the ability of
companies as a
whole in making a
profit / loss.

better the state of a

company.

increased demonstrate the

company's ability to
generate profits, the
better.

Company Issue
Description of Issue Faced by the Company

Issue
Worsening Financial Condition

Lack of Marketing Effort

Lack of Operational efficiency

Description
Company suffers from 17 % loss in gross
profit. Indicating the sales of the company
arent that much hot.
Marketing company should have the database
of the company to be supported by the current
technology in order to compete with global
environment
Old equipment in the company leads to the
lack of efficiency in their operation, these fact
needs attention as these assets is the main
streams of company cash flows.

Level of Strategy Required to Solve the Strategy

Issue
Worsening
Financial
Condition

Lack of
Marketing
Effort

Lack of
Operational
efficiency

Functional

Business
(Unit)

Corporate

Finance Division needs to

take part for these issue.
the need to create a new
financial strategy in order
for the companyto gain
competitive advantage

Business level strategy is

taking part in how the
company will compete
with competitors
product. extensive
research is needed in
order to find what
customer want.

Corporate level Strategy is

needed for these issue as
company need to expand their
market and also they need to
focus to sell and diversify their
product in order to increase
the corporate performance as a
whole.

Functional level strategy

is needed for company
especially marketing
division. extra effort is
needed to grab more
customer and maintain
relationship to them.
Operation division have to
maintain the condition of
the company asset to the
maximum capacity.

Company also needed to

maintain the efficiency
of the supply of their
raw materials. research
on how to be more
efficient might be
needed

Owner of the Issue

Issue
Worsening Financial Condition

Lack of Marketing Effort

Lack of Operational Efficiency

Owner of the
Issue

Reason

Marketing division

Formic acid marketing

activities in the country and
abroad with all the policies
established by the company
and government

Marketing division

Organize and implement

marketing and distribution of
formic acid. In order to
achieve the sales target.
Conducting production of
formic acid in accordance
with the procedures and
target.
- Controlling between the
target and actual production
- Organizing for efficient
production flow and
integrated functional unit
another.

Operation Division

Environmental Scanning External

PESTEL Analysis
Political Factors
PT Sintas Kurama Perdana is the only company in Indonesia which produce formic acid. Its
position as one of the subsidiaries of PT Pupuk Kujang Sintas Kurama to make PT Prime has a
'dependency' on its parent company. Although the political situation in Indonesia is still unstable,
but this does not really affect the condition of the company. But the company is still controlled
under the Company Law, Articles of Association, and the Decree.

PT Sintas Kurama Perdana formerly PT Formic Acid Indonesia Pratama. The Articles of
Association was approved by the Minister of Justice of the Republic of Indonesia in accordance
with the Decree No.C2-7509-HT.01.01.TH.86 dated October 28, 1986.
The Articles of Association have been amended several times, most recently on July 25, 2008 on
the Company of Resolution regarding approval to change the entire Articles of Association to
comply with Law No. 40 Year 2007 regarding Limited Liability Company. Then change the
Articles of Association was approved by the Minister of Law and Human Rights Republic of
Indonesia with Decree No. AHU-62558.AH.01.02 2008. The Company calculates and records
the estimated obligation termination benefits and other long-term programs in accordance with
the Law OF Indonesia No. 13 of 2003 on Labour and CLA period 2010-2012 between the
company and unions.

Economic Factors
PT Sintas Kurama Perdana conduct its business activities, one of which, with the export. Thus
the transactions carried out during the year is always associated with foreign currencies are
recorded based on the exchange rates prevailing at the transaction date. The nature of the foreign
exchange rate fluctuation will lead to the difference of the profit or loss arising on the export
transactions in the financial statements presented in the Financial Statements of the Company.
The Company also adopted new financial standards, Statement of Financial Accounting
Standards (PSAK) which refers to International Financial Reporting Standard (IFRS) which was
implemented in the financial year January 1, 2011. With the changes to financial standards, then
there is the impact it had on profit-recording loss in the previous year, but not significant.

Social Factors
PT Sintas Kurama Perdana is located in Industrial Zone Kujang Cikampek surrounded by
companies engaged in the industry either in the same or different. In addition, PT Sintas Kurama
Perdana can take advantage of the needs of local residents for labor so companies can take
advantage of these circumstances to seek employment contract (outsourcing). Showed positive
sales trend for local sales. Formic acid produced by the company can be used as raw materials
for other industries such as manufacturing chemicals, fertilizers, leather, and more. This potential
can be utilized by the company to continue to boost distribution of its products to increase total
sales. In 2012 it was noted that the local sales formic acid companies tend to experience a steady
increase after the year 2011 had decreased total sales.
Companies should make a breakthrough in new products to respond to the challenges in the
social and cultural side. It aims to enable companies to maximize production capacity and
expanding market share in Indonesia formic acid.

Technological Factors
Rapid technological developments from time to time will no doubt have to be taken into
consideration the company to perform maintenance and the purchase of machinery in the
company. The Company also regularly conducts the Annual Improvements to maintain the
7

production machines. In addition, the company is also able to use the latest computer software to
make it more efficient to save operational costs. Fixed asset efficiency efforts continue to be
made by the company. Total fixed assets decreased from year to year because the company
managed to improve efficiency while maintaining the quality and the quality of the resulting
formic acid.

Environmental Factors
Indonesia is a country that is known as a producer of wide range variety of natural resources,
including natural resources such as forest product and timber. Indonesia is also known for being
the worlds largest archipelago with the largest area of rainforest in Asia. With such rich natural
resources, Indonesia should have been able to lead in trading in its natural resources among other
countries. But in the contrary some issues has prevented the country from developuing this
potency.
Strategic opportunities in Indonesia natural resources are abundant. Many areas in the country
can be worked and developed into a Chemical industries, strategic threat is the fact that the
company are governed by several laws and regulations wehich relare to the social and
enviromenrtal impact of chemical industry. Waste disposal and production process may
potentially pollute the air, land and waste. The company ensures that the operation carry out
international best practices in environmental safety standards and waste treatment dacilities that
comply with or exceed government requirements and regulations.

Legal Factor
Legislative changes occur from time to time and many of them affect the business environment.
For example, if a regulatory body would set up a regulation for the industries, then that law
would impact all the industries and business that strife in that economy, therefore businesses also
analyze the legal developments happening in their environment.

COMPANY OVERVIEW
INDUSTRY BOUNDARY
PRODUCTS

Sintas is a company engaged in the chemical industry, especially in providing for Formic Acid in
the country. The following product mix:

Formic acid concentration of 90% in

packaging Jerrycan 25 kg

Formic acid concentration 94% in packaging

Jerrycan 25 kg

Formic acid concentration of 90% in bottles of

600 grams

Formic acid in packaging 1 Ton

Breadth of products made Sintas formic acid is composed of two types of Formic acid in
different concentration. Composed of 90% formic acid and formic acid 94%. While the depth is
differentiated by packaging and quantity of formic acid as previously described.
FINANCING

In terms of sources of funding, PT. Sintas fund activities initially with funding sourced from the
stock traded. PT. Sintas deploy 25,000 shares at a price of Rp 1,000.00 per share. PT. Sintas also
use internal funding by using retained earnings or often referred to as retained earnings. At first
PT. Sintas to raise funds through bank with the composition 6: 4, but this time not being carried
out related to the company's strategy was not to expand so it does not require too much capital.
Authorized Capital: Rp 25,000,000,000.00

Total Investment: Rp 39,009,000,000.00

Shareholders
PT. Pupuk Kujang 45.22%
PT. Saturama Wicaksana 9.04%
PT. Inti Pratama Fadjarpurnama 18.09%
PT. Harner 9.04%
INTERCHEM Plasagro Jaya 18.61%

OPERATIONS
Product Design

Products offered by the Company Sintas is formic acid, use can be used for plantation of rubber,
leather, textiles, pulp, nutrition fodder, and cleaning materials ceramics. The main raw material
of formic acid treatment is CO gas. Formic acid products sold with bottles and jerry cans
(customize) as well as in bulk form (in bulk) so flexibly to customer demand.
Product Manufacture and Facilities

Facilities owned Sintas there are two buildings that are still located in the industrial area
Pupuk Kujang. The first building is a factory building, an office and other buildings.
Amenities at the factory Sintas there is also a space for controlling factory machinery,
space for the production of formic acid, formic acid space for packaging, as well as
storage space for formic acid products already packaged.
Formic acid plant locations Sintas the Company is in an industrial area adjacent to the gas
purification plant CO (PPCO) Pupuk Kujang 1A PT Pupuk Kujang, as a supplier of raw
materials CO gas. This is a guarantee for the Company to obtain the raw material gas CO
and continuity of formic acid production plant on an ongoing basis, along Fertilizer
Factory Kujang 1A operates.
In addition, the formic acid production process technology using process technology
licenses given from Kemira Oy, Finland. Formic acid plant was inaugurated on 19
November 1988 with a production capacity of 11 110 tonnes / year or 35.088 tons / day.
Data from the last 5 years, production of formic acid ranged between 45-73% of installed
capacity or an average of 6292 tons / year or 56.63% of the installed capacity. CO gas
feedstock supplied by PT Pupuk Kujang, through a process in PPCO then through the
compressor C-301 is compressed into formic acid plant.

10

PROCUREMENT

Sintas have a fairly low turnover rate for employees have a fairly high loyalty towards the
company. Procurement employees may only occur if there is a vacancy or a factory is doing an
annual repair requiring employees more than the previous contract. Recruitment and selection is
still quite conventional Sintas to employees of the operator which is obtained by way of
outsourcing the surrounding community. While permanent employees obtained from the
recruitment and selection of both internal and external. Source candidates could come from a
promotion until the placement of ads on a job site like JobsDB. For the managerial level, then
Sintas recruitment and selection is pretty tight where the candidate comes from an external
source, the headhunter.

11

CUSTOMERS, SUPPLIERS, COMPETITORS, AND

SUBSTITUTES
CUSTOMER
PT. Sintas Kurama Perdana is a company engaged in the B2B (Business To Business) course as
supplier of formic acid, catalyst raw material for rubber processing industry, textiles, and leather.

Marketing
Territory

Customer
Name

Produc
t Type

Transactio
n Type

Customer
Catagory

Indonesia

PT Fadjarpurnama
Pratama Inti

Asam
Formiat

B2B

High Loyalty

PT Intercherm
Plasagro Jaya
CV Putera Daradjat

Asam
Formiat
Asam
Formiat

B2B

High Loyalty

B2B

Medium
Loyalty

Asam
Formiat

B2B

High Loyalty

Indonesia
(JawaBarat)
Internasiona
l

PORTERS FIVE FORCES

Forces

Rating

Threats of New Entrances

Rivalry Among Existing Firms
Threats of Substitute Products
Bargaining Power of Buyer
Bargaining Power of Supplier

Low
High
Medium
High
High

Threats Of New Entrants

The threat of new entrants to the industry Formic acid is quite low due to several things:

12

Economies of Scale : Economies of scale lies in the formic acid production capacity. The
decline in fixed costs do if the production capacity increase, starting from 8000 tons / year.
Capital relatively large : The investment required is quite large, but still categorized as middle
class in the amount of $ 23 million for a capacity of 11000 tons / year
Access to the distribution channels is difficult : Distribution lines formic acid from the plant is
done via wholesalers and then to a new reseller to the consumer.
Technology : Formic acid manufacture technology difficult to obtain a license
Raw material: Formic acid is the raw material gas CO which is not available in the market as a
supplier of stock
Location: Location formic acid plant to be close to the raw material supplier factory Co
poisonous gas.

Rivalry Among Existing Firms

Competition between companies in the industry formic acid is very high because it must compete
with international companies. Companies that produce formic acid crumbling spread in the world
and also to the Indonesian market. Companies that dominate the market are BASF (Germany),
BP (Britain), Kemira Oy (Finland) whose production capacity to 380,000 tons / year.

Threats Of Substitute Products

For the textile industry was, the use of acid - another acid proven to be a substitute for example
formic acid such as sulfuric acid, and acetic acid. As for the rubber industry tidaka practically no
replacement product because it is very helpful in rubber processing.

Bargaining Power Of Buyer

It is due to be some factors:
Concentration of Buyer: In overseas markets, especially Europe concentration of buyers is
smaller, so the buyer bargaining power is higher, while in the country is almost equal to the
consumer a small but spread throughout Indonesia so that the bargaining power could be higher.

13

Small Volume Purchases: Because formic acid is used only for a few industries such as rubber
processing, leather and textiles
No Switching Cost: Changeing the supplier is not a problem for consumers, especially when
there is no guarantee continuity of supply.

Bargaining Power Of Supplier

The strength of their bargaining power with suppliers in the company is quite high due to:
Only Raw Materials produced by multiple suppliers of raw materials formic acid gases CO
produced is limited by the Petrochemical plant manufacturers such as ammonia plants /
Urea
Substitution of raw material suppliers is unlikely: CO gas can be replaced by natural gas.
However, this possibility is difficult because it is very difficult to find and process the natural
gas.
Industrial customers formic acid is not critical suppliers.
High Cost Switch Suppliers: The gas supply pipe supplied by continuously causing the high
cost of switching suppliers.

COMPETITOR ANALYSIS
BASF (Germany)
The BASF Group develops, produces and markets about 700 products around the world. The
most important of the divisions product groups include amines, diols, polyalcohols, acids and
specialties. Intermediates, for example, are used as starting materials for coatings, plastics,
pharmaceuticals, textile fibers, detergents and crop protectants. Innovative intermediates from
BASF help to improve the properties of final products and the efficiency of production
processes.

Their current (business) strategy

More than 112,000 employees work on contributing to the success of our customers in nearly all
sectors and almost every country in the world. We operate six Verbund sites as well as 338
additional production sites worldwide.
14

Our employees are fundamental to achieving the goals of our strategy. Our Best Team Strategy is
derived from our corporate strategy and simultaneously contributes to its implementation. We
want to form the best team. To achieve this, we put focus on three strategic directions: excellent
people, excellent place to work and excellent leaders.
Career development, life-long learning, the support and development of our leaders as well as the
inclusion of diversity are cornerstones of our human resource management.

Their objectives (financial vs. market goals)

BASF aims to strengthen its position as the worlds leading chemical company. We describe how
we intend to achieve this in our We create chemistry strategy.
Innovations based on chemistry will play a key role in three areas in particular:

Resources, environment and climate

Food and nutrition

Quality of life

BASFs products and solutions contribute to conserving resources, ensuring good nutrition, and
improving quality of life. Sustainability and innovation will be significant driving forces!

Their strengths and weaknesses

Economies of Scale and Quality Focus (strength)
they are more advantageous compared to other industry as they are international scale and have
the capability to ride out the turmoil in economic storm.their positioning in the market is unique
an unparralelled, especially for the domestic market where our large market share and strength
in logistics give them an edge over their competitors.
Focusing on Export Market(weakness)
the global economic slowdown in second half year of the year 2012 had impacted negatively on
the groups operating environment. due to the slow demand for chemical products, especially on
the fertilizer market
15

Their assumptions about the industry

they assume that the industry is very attractive, especially in the export market. they also have
good brand image in some countries. but, they have to ready to face that world economic
condition as the primary consumer were declined as the economic declined.

Environmental Analysis - Internal

Capability evaluation based on VRIN framework
Tangible resources
Financial
Cash Account
Account Receivables
Lending Capacity
Physical
Facility and plants modernity
Plant Strategic Location
Machine Sophistication
Technological

Trade Secrets
Innovative Production
Process
Patent
Trademark

Organizational

Strategic Planning
effectiveness
Excellence in control system
Excellence in evaluation
system

Intangible
Resource
Human Resource

V R I
X
X
X
X X

N Competitiveness
Competitive Parity
Competitive Parity
Competitive Parity
Temporary
Competitive Advantage
X
Competitive Parity
X X
Sustainable
Competitive Advantage
X X X X Sustainable
Competitive Advantage
X X
Temporary
Competitive Advantage
X X X
Temporary
Competitive Advantage
X X X X Sustainable
Competitive Advantage
X X
Temporary
Competitive Advantage
X X
Temporary
Competitive Advantage
X
Competitive Parity

Capability

X X

Effectiveness

X X

Managerial skills

Temporary
Competitive Advantage
Temporary
Competitive Advantage
Competitive Parity
16

Innovation and
Creativity

Reputation

Organizational
Capabilities
Adaptability to
Consumer
Product
development
Process

HRM Process

Scientific expertise

X X

Temporary
Competitive Advantage
X
Temporary
Competitive Advantage
Competitive Parity
X
Temporary
Competitive Advantage
X X X Sustainable
Competitive Advantage
X X X Sustainable
Competitive Advantage
X X X Sustainable
Competitive Advantage

Technical expertise

Creative Ideas
Brands

X
X

Reputation to supplier

Reputation to Customer

Product Reliability

Customer service
Product Development
Capability

Competitive
Disadvantage
Competitive
Disadvantage

Innovation of product and

service
Ability to recruit, motivate
X X
and maintain human resource

Competitive
Disadvantage
Temporary
Competitive Advantage

17

Value chain analysis

Inbound Logistics
Activity
Firm
Infrastructure

HR
Management
Technology

Procurement

Description
Lokasi perusahaan pengolahan Asam formiat harus dekat dengan lokasi
pemasok bahan baku utama gas CO yang berasal dari PT Pupuk Kujang,
karena gas tersebut merupakan gas yang berbahaya. Oleh karena itu,
penyaluran bahan baku sangat tersistemisasi dan didukung infrastuktur yang
memadai serta mengutamakan keselamatan kerja.
Consisting of Procurement Section, Section Maintenance and Safety Section
cooperate in maintaining and overseeing the infrastructure to match its
functions to support the company's operations.
PT Sintas and PT Pupuk Kujang continue to study more deeply in an
attempt to replace the CO gas supply sources available today that actually
feasible and bankable. The plan is to buy a used CO gas refinery plant (Used
Plant).
Consists of costs incurred to acquire CO gas, the cost of purchasing and
shipping packaging to reach the factory Sintas.

Operations
Activity
Firm
Infrastructure

HR
Management
Technology

Procurement

Description
Building adequate in the manufacturing process and the course of formic
acid grooves own standardization to facilitate the execution of the
manufacturing operations formic acid. Besides the workers Sintas use
working module to guide the production process.
Consisting of Operations, Inspection and Planning Section and Internal
Audit Unit work together in planning - to process and organize the
manufacture of formic acid.
Formic acid factory with technology from Kemira Oy, Finland. This
technology selected
based on the results of selection of some of the existing process technology
for commercial reasons to medium-scale production capacity of a reliable
technology, the raw materials CO and H2O as well as simple and efficient
operation. However, in carrying out quality control required Camila Ring
technology that works automatically when the production process is
running.
In the implementation of procurement is certain that the product purchased
in accordance with the requirements of the type, quantity, and its influence
on the production process, the supplier is a supplier of choice.

18

Outbound Logistic
Activity
Firm
Infrastructure

HR
Management
Technology

Procurement

Description
Company made an agreement with a distributor system to guarantee that
each month the distributor take appropriate formic acid specified quota.
Coordination with the distributors regarding the process of moving the
formic acid from the plant site to the location of a distributor.
Distribution and sale of their part which govern the system of distribution
and sales administration as well as dealing with the distributors.
Through the means of communication such as telephone, internet, as well as
the sale archived data collection and computerized to control the distribution
of Sintas to the distributor.
Distribution costs consist of the cost Handling and Shipping.

Marketing and Sales

Activity
Firm
Infrastructure

HR
Management
Technology

Procurement

Description
Marketing B2B marketing Sintas is so highly dependent on distributors in
sales. Marketing mix that must be considered is the Price and Place which
regulates the price with the selection and selective distributor of a wide
range of different segments.
Promotions and Services section that governs how formic acid as Sintas
single product can be marketed in the community.
In the process of marketing, Sintas must have software that supports and
facilitate the company in the process of advertising, such as making
presentations and also create ads to market Sintas and its products are sold.
Consists of the cost of surveys and promotions. So far the campaign has
been conducted with the rubber plantations in Sumatra and Kalimantan.

Service
Activity
Firm
Infrastructure
HR
Management
Technology

Procurement

Description
To perform the necessary services activity Standard Operating Procedure
(SOP) so expect services delivered in accordance with what is desired by the
company and can provide maximum satisfaction to every customer.
A qualified workforce will support services provided to consumers.
Therefore, it will require a skilled workforce and master the field of
customer relationship management.
Sintas do not have the specialized technology in the process of his services.
Since the process only Sintas services include the delivery of products from
the factory to the hands of consumers / distributors through the container
truck.
Procurement of appropriate means of transport to facilitate the process of
19

delivery to the consumer.

20

Business Model Canvass

Key Partners
PT Megayaku
Kemasan
Perdana (Supplier Jerry
Can)

Key Activities
Formic Acid
Production

Value Propositions

Customer Relationship

Comply to the SNI (Standar

Nasional Indonesia)

0264-313392,
312844,
313044
0264-313043,
313044

Competitive Price
PT Pupuk
Kujang (supplier gas
CO
PT Kemasindo
Bioplas
PT Fadjarpurnama
Pratama Inti

Key Resources
Labor
Material
Machinery

Customer
Segments
B2B Company

sales@sintas90.co.id
Channels
Jl. Jendral Ahmad Yani No. 39
PO Box 66, Cikampek 41373
Karawang - Jawa Barat Indonesia
http://www.sintas90.co.id

PT Intercherm Plasagro
Jaya
CV Putera
Formiat Daradjat
Cost Structures
Promotion
Material
Salary
Equipment

Revenue Streams
Product Sales

21

22

Situational Analysis
SWOT Analysis based on previous analysis (Environmental
Scanning)
STRENGTHS

1. Access the CO gas feedstock is very affordable.

The main raw material formic acid plant is the CO gas. Location formic acid plant owned by the
Company located in the industrial area adjacent to the gas purification plant CO (PPCO) Pupuk
Kujang 1A PT Pupuk Kujang, as a supplier of raw materials CO gas. This is a guarantee for the
Company to obtain the raw material gas CO and continuity of formic acid production plant on an
ongoing basis, along Fertilizer Factory Kujang 1A operates.
2. The only company that produces formic acid in similar industries.
Until now the company has survived is the only factory producing formic acid in Indonesia, so
the company did not have a competitor in the form of similar industries in Indonesia.
3. The distribution system of formic acid
Formic acid distribution system has been implemented through a good distributor for the textile
industry and the leather industry as well as for rubber plantation sector. These distributors have
had a distribution network to areas throughout Indonesia.
4. Quality and brand of the formic acid
Quality of formic acid produced by the Company has been well received by the market, both the
industry and in the rubber plantation sector. Formic acid products sold with bottles and jerry cans
(customizeable) as well as in bulk form so it offers flexibility to customer demand.
WEAKNESS

1. Dependence on one supplier of raw materials

CO gas feedstock obtained only from CPO PT Pupuk Kujang, no other supplier as replacement.
2. Production process technology
Formic acid production process technology using process technology licenses given from
Kemira Oy, Finland. Formic acid plant was inaugurated on 19 November 1988 with a production
capacity of 11 110 tonnes / year.
3. Small production capacity
The installed production capacity of formic acid factory Company amounted to 11 110 tonnes /
year or 35.088 tons / day. Data from the last 5 years, production of formic acid ranged between
45-73% of installed capacity or an average of 6292 tons / year or 56.63% of the installed
capacity.
4. Dependence to distributors

23

Distribution / sale of production depends on two distributors. Sales on sales. To ensure that
distributors take formic acid corresponding quota set in the agreement, must be regulated in
detail the rights and obligations of both parties and sanctions / penalties in case of broken
promises.
5. Old Plant
Formic acid plant was completed and operational in 1988, so it has now reached the age of
nearly 25 years. The aging plant equipment maintenance costs resulting plant is quite high, and
production efficiency relative decline. This will result in increased cost of production of formic
acid.
OPPORTUNITY

1. New arrivals
Teknologi pembuatan asam formiat memerlukan investasi yang besar. Pendatang baru enggan
ntuk masuk ke dalam industri ini karena risiko persaingan dengan industri besar yang sudah lama
melewati proses pembelajaran.
2. Market Expansion
With the use of applications such as formic acid in addition to the rubber plantation sector,
leather and textile industries namely in the pulp industry, nutrition, animal feed and cleaning
materials ceramic opening growing market opportunities formic acid.
3. Distribution Access
The company has had access formic acid distribution to all regions in Indonesia through
distributors.
THREATS

1. The development of natural gas prices

Suppliers of CO gas as the main raw material of formic acid plant is PT Pupuk Kujang that
produce urea. The main raw material manufacturing of urea fertilizer is natural gas. The pricing
policy for natural gas is regulated by the Government.
2. Competitors' Products
The main competitor to come from China and Germany. In 2005 BASF makes formic acid plant
in Nanjing China with capacity of 50,000 tons per year, and China's own building in Feicheng
plant with the same capacity as in Nanjing, which is 50,000 tons per year.
3. Factory Relocation
Several factories that use formic acid as textile factories to move abroad (relocation), thus
affecting domestic demand for formic acid.
4. Substitute substances to process rubber and textiles
24

Some industry or consumers using formic acid often use substitute products such as rubber
factories and textile mills.

Strategy Formulation
TOWS analysis
O1. New arrivals
O2. Market Expansion
O3. Distribution Access

T1. The development of

natural gas prices
T2. Competitors' Products
T3. Factory Relocation
T4. Substitute substances to
process rubber and textiles

S1. Access the CO gas

feedstock is very affordable.
S2. The only company that
produces formic acid in
similar industries.
S3. The distribution system
of formic acid
S4. Quality and brand of the
formic acid

SO Strategy
Growth Strategy
(Concentration Horizontal,
Intensify and Expand)
O1 O2 O3 S1 S2 S3 S4

ST Strategy
(Service Quality & Strategic
Alliance)
T1 T2 T3 T4 S1 S2 S3 S4

W1. Dependence on one

supplier of raw materials
W2. Production process
technology
W3. Small production
capacity
W4. Dependence to
distributors
W5. Old Plant

WO STRATEGY
(Operation Strategy &
Marketing Strategy)
O1 O2 O3 W1 W2 W3 W4

WT Strategy
(Pause Strategy)
T1 T2 T3 T4 W1 W2 W3 W4

25

Proposed Strategy
Current Strategies
Companies are trying to control the amount of inventory in the warehouse. Reduced number of
authorized distributors who relate directly with the company is making the company had to make
business cooperation with rubber industry plantations in Sumatra Island.

The company implements Cost Leadership as a strategy for the long-term plan as a form
of anticipation of price control SINTAS formic acid products in order to remain
competitive in domestic and foreign markets. In addition the companies also apply fairly
strict quality control on each unit of production so that the product remains a quality
product.
The Company builds strategy efficiency in the use of raw materials and supplies. Delays
in the supply of raw materials from PT Pupuk Kujang impact on the state of the plant be
on shutdown.
The Company has adopted these strategies in recent years. The implication is quite good on the
state of the company both in general and specifically when seen from the financial condition.
The Company continues to strive to be a company that is efficient in the use of available
resources so that the cost of production of formic acid still remains affordable for consumers.
Additionally, Sintas began to widen the reach of its sales by distributing its products directly to
the rubber plantation.

Major feasible alternative strategies and their pros and cons

Alternative
Strategy

Recomended Strategy
Pros

Cons

26

Growth Strategy

Service Quality

Strategic Alliance
Operation Strategy

Marketing Strategy

Pause Strategy

Expanding market share

Increasing the scale of
business
Increase Profit
Mastering the domestic
market
Leave a positive brand image
Increase customer loyalty
Maintaining brand purchase
intention
Engage Consumers
Maintaining the Stability of
Sales and Production
Maintain the reliability of the
plant
Increase the intensity of
production.

Improve the existence

Survive in the eyes of the
world
Increase brand awareness
Easing activities that require
information
Analyzing the conditions in
making a new decision.

Great marketing costs

Distributors are not ready
Marketing Research depth

Requires training
Great Cost
Need Commitment
Need Cohesiveness Among
Divisions
Business industry does not
want to
Visits to companies large cost
Cost expensive
Need competent personnel
Need to add land
Need permission bureaucracy
with holding and
commissioners
Less Readiness from
Employees less due to long
exposure to old information
systems technology
Requires Training
If it takes too long, it will
make the performance
decreases

27

Selected Strategies
Issue
Worsening Financial Condition

Lack of Marketing Effort

Lack of Operational efficiency

Strategies

Reason

Growth Strategy

To handle the worsening

financial health, company
must do growth strategy
and pursue sales by doing
research and developing
awareness of the product
Boosting effort in
marketing is needed in
order to boost sales. What
marketing can do is
basically enhancing their
database system.
Operation Strategy is
needed in order to boost
operational performance
of the company.

Marketing Strategy

Operation Strategy

28

Implementation Plan
Growth Strategy
Program
Market
Analysis

Q
1

DIC

2014
Q Q
2
3

Q
4

Q
1

2015
Q Q
2
3

Budget

370.000.00
0

Marketing

Market
Marketing
Expansion
Total
Optimal Success Parameter
Marketing: Increase Sale,
Increase Market
Share,Repeat Purchase
Networking
Finance: Increase Annual
profit Teamwork Integration
HRM: Improve Competency
and Skills Hardwork
Operation: Increase
Production

Explanation

Q
4

710.000.00
0

Analyzing
market as a
whole
Increasing
market share

1.080.000.00

Distinctive Competencies
Networking
Teamwork Integration
Hardwork
Target Orientation
Massive Promotion

Marketing Strategy
Program

DIC

Developing
Market
Marketing
Information
System
Total
Optimal Succes Parameter
Marketing: Mendapatkan
Informasi Tepat, Brand
Awareness
Finance:Investasi tepat
sasaran
HRM: Improve
Competency and Skills

Q
1

2014
Q Q
2
3

Q
4

Q
1

2015
Q Q
2
3

Budget

Explanation

230.000.000
0

Optimalizing
Information
system within
the company

Q
4

230.000.0000
Distinctive Competencies
Analytic Research
Knowledge
Handle Technology Well
Target Orientation
Massive Promotion

29

Operation: Forecast

30

Operation Strategy
Program

DIC

Plant
Maintenance

Operation

R&D about CO
Operation
Gas Production
Total
Optimal Succes Parameter
Marketing:
Finance:Investasi tepat
sasaran
HRM: Improve Competency
and Skills
Operation: Increase
Production, no shutdown
operation.

Q
1

2014
Q Q
2
3

Q
4

Q
1

2015
Q Q
2
3

Budget

Explanation

Q
4
851.000.00
0
940.000.00
0

Analyzing
market as a
whole
Increasing
market share

1.791.000.00

Distinctive Competencies
Analytic Research
Knowledge
Hardwork
Target Orientation

31