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Business Corporate Strategy

Plan and Strategy Overview

 As the global and national economy has not yet fully recovered, BUMI has developed its business plan with emphasis on judicious utilization of opportunities for business development exercising prudence and due care.

 

 

General Strategy

In general, BUMI’s strategy in 2014 can be described as follo

1.     Focus on core business 

BUMI focuses efforts to optimize results through proper utilization of its reserves. BUMI improves its competences in its core business to ensure a stable and safe operations. BUMI continuously carries out its exploration activity carefully to secure a long-term profitability. BUMI also optimizes output to increase revenues and reduce costs.

2.      Pursue business growth

BUMI continues to pursue growth through solid development projects, and by improving the quality and value of existing reserves.

3.      Maintain healthy financials

BUMI seeks to maintain a healthy cash flow through various means, such as negotiating contract terms and proactive debt management. BUMI strives to maintain availability of funds, from banks, strategic partners, or from any other funding source, to ensure that BUMI is able to meet its obligations, and to fund future growth.

 

Business Development Strategy

Taking into consideration prediction of external conditions for the next few years, BUMI places emphasis on a planned growth model and develops strategies for each segment in accordance with sector conditions. Such steps are carried out by realizing potential of its resources, building supporting infrastructure and creating opportunities to optimize benefits in line with the strengths of the Company and managing risk. BUMI also will conduct business development of its subsidiaries such as it is now in PT Pendopo Energi Batubara.

 

 

Short & Medium Term Goals

Over the medium term, BUMI carefully plans to realize potential from its existing business and convert other development projects to enter commissioning stage. When considering the current conditions, the development strategy of the Company can be grouped into two business segments, namely energy and basic minerals.

 

In the energy segment, coal presents attractive potential to be developed further. As the largest producer of coal in Indonesia and the largest supplier to the domestic and international markets, BUMI is determined to improve performance from its coal mining activities. Given the growth in the energy and transportation sector the Company seeks to develop its gas and energy projects over the medium term.

In the minerals segment, the Company is focused on developing its metal assets, such as Zinc, Lead, Copper and Gold, and moving them into construction stage. Cognizance has been taken of regulation to add value through additional processing.

Maintain and strengthen financial conditions amidst challenging times over recent years, BUMI aims to improve liquidity and financial sustainability through a number of synergistic corporate actions that are envisaged.

 

 

The composition of export destination countries in 2014 was remained unchanged, with India remained the largest export destination followed by China and Japan. Despite a significant decrease in the total volume of sales to India, China and Japan, the three countries were still hold the majority, ie 77.71%.

 

 

Sales Distribution

BUMI’s total sales volume in 2014 stood at 84.73 million tonnes, representing an increase of 3.34% from 81.99 million tonnes in 2013. The growth of sales volume was mainly derived from the increase in domestic sales volume, from 21.90 million tonnes in 2013 to 38.24 million tonnes in 2014. The contribution of domestic sales in 2014 was recorded at 45.13%, while in the previous year was 26.71%. Hence, export market dropped from 73.29% in 2013 to 54.87% in 2014.

In 2014, our exports dropped significantly by 22.64% from 60.10 million tons to 46.49 million tons, mainly due to the low demand of global markets impacted by the weak global economic conditions.

The composition of export destination countries in 2014 was remained unchanged, with India remaining the largest export destination (43.91%) followed by China (20.60%) and Japan (13.19%). Total sales to China plummeted by 48.03%. Total sales to India and Japan, and also decreased, respectively by 12.55% and 16.18%. Although decreased significantly, but exports to the three countries were still the majority, ie 77.71%.

 

 

Details of the Company’s coal market development by destination are as follows:

 

 

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