Global Business Guide Indonesia

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Dewata Group | Mr Paulus Warsono Broto
Mr Paulus Warsono Broto

To best take advantage of the wealth of resources available in Indonesia, we are also planning to engage in value added processes by investing in smelters for iron ore

Mr Paulus Warsono Broto, President Director

PT Darma Putera Wahana Pratama (Dewata) was established in 2001 and has a diversified portfolio of business ventures in the energy sector. What can you tell us about your group’s background and its strategies going forward?

Our group presently has four lines of business: mining, forestry, energy and property. Within the mining sector, which is where we were initially focused following our establishment in the early 2000s, we have three distinct types of operations: coal concession acquisition, mining services, and trading. Our strategy for the future is centred on an effort to make internal improvements such as increasing productivity on the mines we manage as well as develop our ability to acquire concessions for other companies.

To best take advantage of the wealth of resources available in Indonesia, we are also planning to engage in value added processes by investing in smelters for iron ore in West Sumatra. Similarly, our group is targeting an entry into downstream timber industries to build upon our experience in the forestry sector.

Based upon your insight into a host of different sectors and business areas, which industry would you say has the most potential in Indonesia?

Many of the sectors we are involved in have very promising prospects. There are big opportunities available to businesses entering the coal mining industry, due in large part to Indonesia’s significant reserves. More specifically, the thermal coal industry has a great deal of potential to supply power plants in China, India and Japan.

Within the forestry sector, companies like ours which are able to properly manage their timber operations in accordance with strict environmental regulations are well positioned in a market in which supply has been falling.

From a broader perspective, Indonesia’s relatively low energy consumption per capita suggests that there is substantial room to grow. Ideally, growing energy consumption could be met by plants fuelled by alternative power sources. Hydroelectricity is an exciting investment area, given its suitability to remote areas.

With that said, barriers to the development of this industry remain. One of the largest impediments to companies in hydroelectricity is the subsidy of fuel by the government, which needs to be tapered in the future to allow for unencumbered growth in the renewable energy sector.

What is your current outlook for the coal industry?

Given that most of the newly built coal power plants in markets such as India are likely to remain in operation for at least thirty to forty years, I expect that the coal industry in Indonesia will continue to grow as a result of being one of the primary sources of thermal coal. From the standpoint of our group, we anticipate that we will continue to export this product to India, China, South Korea and Hong Kong and are currently in the process of developing coking coal, a high carbon content fuel, to make sure that we evolve with changing market demand. We expect to be able to begin full scale production of this type of coal over the course of the next two years.

Is your company interested in working with foreign investors looking for a local partner that has a deep understanding of the regulations and intricacies of Indonesia’s mining and energy sector?

We developed our company with the mindset of achieving international standards and from the outset targeted cooperation with foreign partners. Our group has extensive experience in selling our products to customers around the world, has previously carried out projects with international enterprises such as Nobel Energy and is interested in pursuing similar types of joint ventures within the mining industry. It is our vision to become a world class company, and we believe that we can best achieve this through cooperation with firms that have expertise in realising the potential of an abundance of natural resources. As we have worked hard in establishing international standards of management, our group is primarily focused on partnering with companies capable of providing capital to accelerate our expansion process. For example, we are looking for a strategic partner to work with on our new coal concession in Central Kalimantan, which has more than 500 million tonnes in resources. It is our plan to start mining operations here between the end of 2014 and early 2015.

What would you like our readers to remember about Dewata Group and Indonesia as a final message?

Much has been said of the current state of mining in Indonesia and abroad, but it is important to keep in mind that companies and investors must be willing to weather the storm to reap the rewards of a more positive business climate that is on the horizon for Indonesia.

Global Business Guide Indonesia - 2014

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