Despite Slow Growth, Profits High at Chem Distributor
Watch the video with Andrew Stotz or read a summary of World Class Benchmarking on PT AKR Corporindo Tbk.
Background
PT AKR Corporindo was born as a small chemical trading business over 55 years in Surabaya, Indonesia.
It has since grown to become one of the country’s largest private sector distributors of basic chemicals, petroleum, logistics and supply chain solutions.
The founding Adikoesoemo family still owns 59% of the shares via its holding company.
Business Description
AKRA is the biggest distributor (by volume) of petroleum and basic chemical products in Indonesia, which are the main revenue sources for the company. The steady growth of this division has been supported by diversification into related midstream and downstream services.
The non-subsidized retail fuel market has now risen to about 80% of the country’s total fuel consumption. Thanks to high market share, AKRA has been able to increase its prices to customers, more than offsetting lower subsidies.
The remainder of revenue is generated by AKRA’s downstream services, which range from manufacturing and logistics to petrol stations, as well as investments in an industrial estate.
As of the end of 2015, AKRA’s storage tanks for fuel and basic chemicals have an existing total capacity of 656,000 kiloliters. AKRA also has nine sea ports and six river ports in Indonesia and five river ports in China equipped with vessels and inland transportation units. It had 129 petrol stations at the end of 2015, and planned to add about 25 in 2016.
Leadership
Soegiarto Adikoesoemo founded AKRA and has served as President Commissioner since 21 November 1992. Before he became President Commissioner he served as the company’s President Director for 10 years.
Soegiarto ranked #22 on Forbes’ list of the richest people in Indonesia in 2016.
Haryanto Adikoesoemo took over the role as President Director from his father Soegiarto on 21 November 1992. Haryanto has a Bachelor’s degree from the University of Bradford in England and attended the Executive Management Program at Harvard Business School in 1993.
World Class Benchmarking
Profitable Growth declined to #3 from #2 in the last year.
But AKR still ranks among the best 423 of 1,410 large Industrial companies worldwide, a worthy achievement in a competitive market.
Profitability has been above average during the last 5 years, and has remained the largest influence of the solid Profitable Growth marks.
Growth fell to #7 from #4 during the most recent 12 months but does not appear to have greatly affected Profitable Growth.
Asset utilization has been declining for several years, while Profit margin improved to #3 from #4.
Sales growth is AKRA’s weakness and is somehow stuck in the gutter at #10. Margin change has remained above average since 2014.
Check out Learning Valuation: PT AKR Corporindo Tbk
Would you invest in AKR Corporindo?
If you like our research, share it with your friends.
DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.