The Adaro Group strives to develop its vertically integrated operations from pit to port to power plant by adding more subsidiaries along the coal supply chain and achieve operational excellence in all aspects of its complex operations. Streamlining the ownership structure of its subsidiaries and eliminating waste (unnecessary or redundant activities) in work processes were among the key strategies executed to achieve stronger synergy for producing high quality products with the lowest cost and shortest cycle time. The role of the logistics pillar is unarguably essential to ensure that all AEI’s coal subsidiaries can secure reliably smooth processes of coal transport from the loading port to the discharging port, so that the coal deliveries of the Adaro Group will arrive a the customers’ locations according to the agreed schedule, specifications and quality. This is a significant factor for Envirocoal to retain customer loyalty.
The group’s logistics pillar is led by PT Adaro Logistics (AL), a company established to manage AEI’s logistics subsidiaries. After nine years of operations, AL now has an extensive range of businesses from coal barging and ship loading, channel dredging and maintenance, multi-purpose terminal and stock pile management, stevedoring to dockyard. In 2021, two new companies, PT Sarana Mekar Pratama (SMP) and PT Sarana Multi Talenta (SMT), were added to the logistics pillar as a part of the measure to streamline the structure of ownership and administer more consistent financial reporting lines among AEI’s subsidiaries. SMP was established in September 2021 to be the parent company of SDM while SMT was established in November 2021 to conduct bathymetry surveys, handle SAMS activities and dredge smaller river channels. Consequently, starting from 2022, SMT will handle the SAMS activities priorly operated by HBI.
After almost a decade playing a role as a parent company for the logistics subsidiaries of AEI, in 2021, AL started to engage in fuel handling and logistics management business to serve affiliated companies and ensure reliable fuel supply for the companies within the Adaro Group. Under this arrangement, AL’s productive collaboration with HBI and IBT generated Rp72 billion in cost savings in 2021.
The logistics business is one of the Adaro Group’s non- coal mining operations, which are continuously expanded to generate income to buffer the volatility of the coal market. Although supporting sister companies within the group remains the first priority, AEI’s subsidiaries under the logistics pillar can also utilize its capacity to serve the third parties.
PT Maritim Barito Perkasa (MBP)
MBP barges coal from its client’s ports of loading at Kelanis, Muara Tuhup, and Teluk Timbau to the mother vessels’ transshipment points at Taboneo and IBT, or directly to customers’ ports of discharge all around Indonesia. As at the end of 2021, its fleet consisted of 44 barges and 48 tugs, and three self-propelled barges (SPBs) with around 550,000 tons of carrying coal capacity and six transshipment facilities comprising four floating cranes and two floating transfer units (FTU) of 166,808 tons per day throughput rate.
In 2021, MBP expanded its fleet by adding three barges of 15,000 dwt, five barges of 4,000 dwt, five tugboats of 1,200 hp, and two tugboats of 2,200 hp. MBP intends to order more sets (tug and barge) in 2022 to serve barging at the upper cycle of PT Adaro Minerals Indonesia (AMI). The main purpose of this investment was to reduce chartered sets from third parties and thus increase operational cost efficiency.
In 2021, MBP barged 47 million tonnes of coal from the group. Particularly for AMI, the barge operations faced major challenges of unpredictable water level. In order to increase the capacity efficiency, MBP applied a system of barge-to-barge (B2B) transfer (a mechanism to increase efficiency by transferring coal from a small barge of less than 4,000 dwt to a bigger barge of 10,000 to 15,000 dwt). Up to the end of 2021, the B2B system had been used to deliver around 2 million tons of AMI’s coal and is expected to grow significantly along with the increase of AMI’s sales. MBP also continued the process to modify one of its floating cranes to facilitate the barge-to-barge transfer for AMI’s coal at a jetty currently being constructed at North Kelanis, which is scheduled to be completed in Q4 2022.
In 2021, MBP barged a total of 47 million tons of coal which belonged to the Adaro Group. MBP will continue to capitalize the extensive experience of serving large- scale coal operations and operating stronger barging fleet that can withstand rough weather conditions for both sister companies and third parties.
PT Harapan Bahtera Internusa (HBI)
Ship Administration and Management Services (SAMS) At AI’s Kelanis coal terminal, HBI performs various shipping administration tasks such as scheduling barges’ in-and- out movements, coal-loading activities and berthing-and- unberthing of barges and assist-tug services. In 2021, HBI continued dredging in Kelanis to accommodate the size of its barges and recorded 3,734 calls of SAMS volume, or decrease 7% y-o-y due to the use of larger barges.
HBI also transports fuel from IBT’s Pulau Laut terminal to Kelanis using 3 (three) units of fuel oil transportation barges (FOTB). In 2021, HBI purchased 3 (three) Self Propelled Oil Barges (SPOBs). Two of the SPOBs started operations in 2021 to transport fuel from IBT to Tuhup port for supporting AMI’s operations. The other SPOB will start operating in Q2 2022 to distribute fuel to barges in Kelanis. In 2021, HBI barged a total of 466 million liters of fuel.
PT Indonesia Multi-Purpose Terminal (IMPT)
After obtaining the concession from the Port Authority of Banjarmasin on September 15, 2018 for the right to carry out commercial operations at Taboneo, on May 10, 2019, IMPT officially commenced operations to handle port control and vessel placements in coal transshipment area by separating vessels based on sizes, such as Handymax, Panamax, and Capesize.
IMPT’s officer places vessels at well-defined vessel loading points and monitors all activities performed on the vessels, including stevedoring activities. All offshore loading operations are managed and monitored from a floating command center equipped with adequate satellite communications and GPS tracking systems, to achieve a quick turnaround time from arrival to departure. In 2021, IMPT enhanced its tracking and monitoring activities by installing a land based radar to ensure proper operations of vessel placements.
In carrying out these activities, IMPT prioritizes the port’s safety and security as guided by the environmental impact license and a certificate of compliance with the International Ship and Port Facility Security (ISPS) Code it has maintained since 2015. As a result, these activities have significantly enhanced the safety of vessel navigation into and out of Taboneo and the transshipment process at the port. Out of the revenue generated from the port services at Taboneo, IMPT pays a concession fee to the government. In 2021, IMPT contributed Rp2.5 billion non- tax revenue, or increased by 9% from Rp2.29 billion in 2020.
PT Indonesia Bulk Terminal (IBT)
IBT provides services for coal and fuel handling at its Pulau Laut terminal at the southeastern coast of South Kalimantan. The coal handling services include coal ship-loading, temporary stockpiling, and coal blending services. IBT’s customers can purchase coal from the most economical sources and get IBT to blend the coals according to their requirements to reduce production costs. IBT also offers facilities that can load vessels of up to 80,000 dwt in less than two days and an annual throughput capacity of 12 million tons, added with a feature that can help to detect and separate metal contaminants in coal before it is loaded to vessels.
For fuel handling services, IBT is equipped with four fuel tanks of 80,000-kiloliter total storage capacity and two jetties with loading capacity of 1.4 million kiloliters/year. In 2021, IBT commenced the trial operations of its in-line facility for blending fuel and FAME (fatty acid methyl ester) designed to improve the quality and increase the speed of blending activities to result in more homogenously blended biofuel and higher loading capacity, i.e. up to 1.8 million kiloliters/year.
For the Adaro Group, IBT is a high capacity back up for Taboneo transshipment operations and a location for sourcing fuel, which is essential for the group’s pit-to- power integrated operations. Although it was positioned to prioritize companies within the Adaro Group, IBT will also utilize its capacity and capitalize on its experience by expanding third-party relationships, especially the coal miners of the central, south and southeast regions of Kalimantan Island, for whom IBT’s location and its comprehensive facilities are most strategic. Since 2015, IBT has been maintaining a strategic alliance with Pertamina, a prominent state oil company, which has been using IBT as a facility for blending biodiesel.
PT Sarana Daya Mandiri (SDM)
SDM started to operate in 2008 by working on a capital dredging project at the Barito River channel to make the channel navigable for two-way traffic 24/7. Since then, SDM has maintained the width and depth of the 15-km channel through regular dredging to keep it safe for navigation. For proper monitoring and control of the traffic and navigational safety, SDM ensures that its surveillance equipment is at operable condition at all times.
The Barito channel has recorded a steady increase in traffic over the years. The cargo volume passing through the channel in 2021 totaled 109 million tons, or 4% higher than 2020. This increase was attributable to the increase in the third-party cargo. With the capacity of accommodating up to 200 million tons of coal per year, the channel still has ample room to accommodate higher volumes.
In 2021, SDM continued to carry out two operations: supervising dredging activities and conducting bathymetry surveys. Dredging supervision was rendered in Kelanis and Ujung Rumput under the appointment of HBI and MBP, respectively. Meanwhile, bathymetry surveys were performed in South, East, and Central Kalimantan to examine channel navigability and the requirements for dredging.
In addition, in the same year, as part of AEI’s the streamlining the ownership structure within the Adaro Group, ATA sold its ownership on SDM to SMP, a subsidiary of AL. This restructuring is expected to create stronger synergy within the logistics pillar.
PT Puradika Bongkar Muat Makmur (PBMM)
PBMM offers cargo stevedoring services to ensure safe loading activities using proper procedure and equipment, with operations commencing at Taboneo in July 2013 and at Kelanis in the 3rd quarter of 2017. In 2021, PBMM recorded 39 million tons stevedoring tonnages at Taboneo.
PBMM has a captive market from the extensive shipping operations of the Adaro Group in addition to benefitting from the transshipment activities at Taboneo organized by its sister company IMPT. Along with the expected economic recovery after the COVID-19 pandemic, PBMM intends to bring more market potential from growing transshipment activities, as well as to expand the third- party relationships to utilize its available capacity.
PT Barito Galangan Nusantara (BGN)
In 2018, AL purchased an operational dockyard in Barito Kuala district on the Barito River and established PT Barito Galangan Nusantara (BGN). Having a dockyard company is essential for AL to secure reliable maintenance facilities that can readily provide the service by fitting into the barges’ schedules and requirements to ensure smooth operations and avoid costly logistics disruptions due to barge breakdowns.
AL has made considerable investment to develop BGN to meet its quality standards and accommodate the company’s larger barges and scale of operations. In 2021, BGN continued its focus on facility upgrading and expansion activities, consisting of developing additional slipways (for tug boats and barges), upgrading dockyard’s facilities, utilizing available slipways, enhancing manpower’s skills and competencies, and implementing the Adaro Group’s applicable standards of safety.