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PT. Indoferro
Brian Chan, Sales and Marketing Director
The Indonesian NPI Market
DISCLAIMER
1
The materials used herein and this presentation (collectively, the “Presentation”) have been prepared by Indoferro business development team, solely for use at the
presentation to be made on Sep 2015. By viewing the Presentation, or by reading the materials used at the Presentation, you agree to be bound by the following
limitations:
• The Presentation is strictly confidential and may not be copied, published, distributed or transmitted or disclosed by recipients to third parties without consent from PT.
Indoferro.
• The Presentation does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities or
an inducement to enter into any investment activity, nor shall any part or all of the Presentation form the basis of, or be relied on in connection with, any contract or
investment decision in relation to any securities.
• The Presentation is being provided by the Company for informational purposes only and has not been independently verified. Neither the Company nor any of their
respective affiliates makes any representation or warranty, express or implied, as to the fairness, accuracy, correctness or completeness of the information in the
Presentation, and nothing in the Presentation is (or shall be relied upon as) a promise or representation by the Placing Agent or any of its affiliates. The Company and
its affiliates shall have no liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of the Presentation or otherwise arising in
connection with the Presentation.
• The Presentation contains forward-looking statements based on the currently held beliefs and assumptions of the management of the Company, which are expressed
in good faith and, in their opinion, reasonable. Forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the
actual results, financial condition, performance, or achievements of the Company or industry results, to differ materially from the results, financial condition,
performance or achievements expressed or implied by such forward-looking statements. Given these risks, uncertainties and other factors, viewers of the Presentation
are cautioned not to place undue reliance on these forward-looking statements. The Company and its respective affiliates disclaim any obligation to update these
forward-looking statements to reflect future events or developments.
• The Presentation does not constitute a recommendation regarding the securities of the Company. By attending this presentation you acknowledge that you will be
solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely
responsible for forming your own view of the potential future performance of the business of the Company.
• Nothing in the Presentation constitutes an offer of securities for sale in the United States or any other jurisdiction, nor does it constitute an invitation by or on behalf of
the Company, any of its affiliates to subscribe for, purchase or sell any securities. Any decision to purchase or subscribe for securities in the possible offering must be
made solely on the basis of the publicly available information about the Company at the time of such offering (the “Public Information”). Any securities to be issued will
not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold: (i) in the United States, unless registered
under the Securities Act or pursuant to an exemption from such registration; or (ii) in any other jurisdiction outside the United States, unless in compliance with all
applicable laws and regulations in that jurisdiction.
•You agree to refer to the Public Information for more complete information about the offering. You should consider the Public Information
before making any investment decision.
TABLE OF CONTENT
2
1. Company Introduction
2. PT. Indoferro Current NPI Production
3. Current NPI Market
4. PT. Indoferro Phase II
5. Upcoming Projects in Indonesia
6. Repercussions on the Philippines
3
COMPANY INTRODUCTION
GROWTH STEEL GROUP - PT INDOFERRO
4
PT Indoferro is a part of
Growth Steel Group,
Which is one of Indonesia’s
Distinguished Business
Group that mainly exposed
As steel and iron
Manufacturer, established
In 1969, Medan, North
Sumatera
PT IndoferroPT Growth SumatraIndustry
PT Growth Asia
Biomass Power Plant
Construction
Steel producer
(deformed bars)
Steel Foundry
Metallurgical
coke producer
PT Indocoke
Nickel Pig Iron
LOCATION
5
• Located on Industrial Zone at Cilegon, Banten with two port facility:
Merak & Ciwandan port
• Raw material resources available from Kalimantan and Sulawasi region
• Available infrastructure : electricity, water & gas utilities
6
PHASE 1 – MID GRADE NPI
BLAST FURNACE
7
Product : Nickel Pig Iron
Capacity: 450 m3
Ni Content: 6 – 7 %
Operational since October
2012 producing Mid grade
NPI.
The first blast furnace in the
country
COKING OVEN
8
Product: Coke
Capacity: 400,000 MT
Heat recovery stem charging
coke oven, which is also the
first
coke oven in Indonesia
SINTERING PLANT
9
Product: Sintered Nickel Ore
Surface Area: 60 m2
Capacity: 700,000 MT
Sintering plant agglomerate
nickel ore fines with other
fine materials at high
temperature, to create an
Intermediate product that
can be used in blast furnace
FLOW OF PROCESSES
1
0
Diagram 1. Nickel Pig Iron Blast Furnace Process, PT Indoferro
PRODUCT SPECIFICATION
1
1
Element Guaranteed (%)
Ni 6.31- 6.50%
Cr > 2.5%
C < 5.5%
Si < 5%
Mn < 1.5%
P < 0.1%
S < 0.30%
Cu < 0.10%
Pb < 0.05%
Fe by diff
Product Name : Nickel Pig Iron
Product Code : IFN 64
Dimension : 230 x 160 x 50 mm
Weight : 8.5 kg/piece
Origin : Indonesia
Packing : Bulk /Loose in 20 ft Cont
SALES REGION
12
1.India 2.Taiwan 3.China 4.Europe 5.North America 6. South Africa
• PT. Indoferro has spent the last three years paving
the way for increase usage of NPI outside of China.
• Market Resistance
•Technical assessment
• Internal inertia
• What has helped us?
•Depressed market price.
• Future for up coming NPI producers?
•A gradual shifting a production capacity moving to
Indonesia.
13
NPI MARKETING EX-CHINA
14
PHASE 2 – HIGH GRADE NPI
ELECTRIC FURNACE SMELTER
1
5
16
NICKEL PROJECTS IN INDONESIA
1
7
Source: ESDM March 2015
No Company Name Input Capacity % Total progress Estimated Completion Date
1 PT. Jilin Metal Indonesia (Billy Group) 390,000 NPI 45,000 29% 2016
2 PT.Bososi Pratama 288,889 Sponge Ni 52,000 28% 2016
3 Aquila Sponge Nikel (Solway Group) 1,256,173 FeNi 81,400 26% 2017
4 Ang and Fang Brothers 210,000 NPI 21,000 24% Q3-2016
5 PT. Stargate Pacific Resources - NPI 650,000 23% Q3-2016
6 PT. Cinta Jaya 61,667 NPI (4-6 %) 18,500 16% 2016
Trimegah bangun persada
Gane Permai Sentosa
PT. Kemakmuran Pertiwi Tambang
8 PT. Nusajaya Persadatama Mandiri 133,333 NPI (6-10%) 36,000 14% Q4-2016
9 PT. Sambas Mineral Mining 180,000 NPI 12,000 12% Q4-2015
10 PT First Pasific Mining 2,000,000 FeNi 200,000 11% Q4-2016
Riota Jaya Lestari
Sriwijaya Raya
PT Genba Multi Mineral)
PT. Hengjaya mineralindo
13 COR Industri Indonesia 1,600,000 NPI 320,000 8% 2017
14 PT. Putra Mekongga Sejahtera 75,000 NPI 15,000 8% Q2-2016
15 Bola Dunia Mandiri 100,000 FeNi (8-10% Ni) 20,000 7% 2017
16 PT. Surya Saga Utama 50,000 NPI 10,000 6% 2017
17 PT. Antam Mitra Haltim 600,000 NPI 70,000 5% Q4 - 2016
Total Kapasitas Input 8,795,062 1,910,900
12 900,000 NPI 180,000 9% 2017
Q3-2016
11 450,000 NPI (10%Ni) 80,000 11% 2017
Product (tpy)
7 500,000 FeNi 100,000 15%
UPCOMING PROJECTS (PROGRESS <30%)
No Company Name Input Capacity % Total progress Estimated Completion Date
1 Cahaya Modern 48,000 NPI 8,640 100% Q1-2014
2 Indoferro 1,500,000 NPI 250,000 100% 2014
3 Antam Pomala (Ekpansi) 800,000 FeNi 10,000 80% Q4-2015
Bintang Delapan Mineral
Bintang Delapan Energi
5 Gebe Industri Nikel 300,000 Ni (99%Ni) 6,000 80% Q2-2015
6 Integra Mining Nusantara 108,000 NPI (5-10% Ni) 21,000 71% Q4-2015
7 PT. Macika Mada Madana 290,000 FeNi (10% Ni) 53,000 62% Q2-2015
Fajar Bhakti Lintas Nusantara
Gebe Sentra Nikel
9 PT Karyatama Konawe Utara 250,000 NPI (8-10%Ni) 50,000 49% Q3-2015
10 Bhineka Sekarsa Adidaya 1,500,000 NPI 300,000 46% 2017
11 PT. Cipta Djaya Surya 3,800,000 NPI 700,000 38% 2017
12 Pernick Sultra, PT 360,000 NPI (15-25% Ni) 3,600 38% 2017
Elit Kharisma Utama
Konawe Nikel Nusantara
14 Kembar Emas Sultra 280,000 NPI (14-16% Ni) 35,000 35% 2017
15 PT. Bima Cakra Perkasa Mineralindo 3,500,000 NPI (6-7%) 370,000 33% 2020
16 PT. PAM METALINDO 2,400,000 FeNi (10%) 165,000 31% Q2-2016
Wanatiara Persada (Multi Baja Industri)
Rimba Kurnia Alam
18 Aneka Tambang - FeNi Haltim 2,500,000 FeNi 40,000 30% Q4-2016
Total Kapasitas Input 20,581,000 2,529,740
17 800,000 FeNi (10-16% Ni) 110,000 40% Q2-2018
13 45,000 NPI (10% Ni) 7,500 35% 2017
15-Apr
8 500,000 NPI (10-16%Ni) 100,000 66% 15-Aug
Product (tpy)
4 1,600,000 NPI (10-15% Ni) 300,000 98%
18
Source: ESDM March 2015
UPCOMING PROJECTS (PROGRESS >30%)
ESTIMATED TOTAL OUTPUT
1
9
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Me
tric
To
n
TOTAL OUTPUT PER YEAR ( TPY ) PROGRESS > 30 %
Nickel Output
• 2016 ~ 113,000 MT
• 2017 ~ 173,750 MT
20
Source: ISEA Oct 2015
LATEST PROGRESS
1. PT. Fajar Bhakti Lintas Nusantara
2. PT. Karyatama Konawe Utara
3. PT. Macika Mineral Industri
4. PT. Bintang Smelter Indonesia*
5. PT. Antam (Persero) TBK
6. PT. Century Metalindo*
7. PT. Bintang Timur Steel*
8. PT. Cahaya Modern Metal Industri
9. PT. Gebe Industry Nickel
10.PT. Sulawesi Mining Investment
11.PT. Huadi Nikel Alloy Indonesia*
12.PT. Titan Mineral*
13.PT. Indoferro
Out of 8 - Estimated: 154,940MT Ni
21
REPERCUSSIONS ON THE PHILIPPINES
22
NICKEL ORE EXPORT TO CHINA
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Jan
ua
ry-1
2
Fe
bru
ary
-12
Ma
rch
-12
Ap
ril-1
2
Ma
y-1
2
Jun
e-1
2
July
-12
Au
gu
st-
12
Se
pte
mb
er-
12
Octo
be
r-1
2
No
ve
mb
er-
12
De
ce
mb
er-
12
Jan
ua
ry-1
3
Fe
bru
ary
-13
Ma
rch
-13
Ap
ril-1
3
Ma
y-1
3
Jun
e-1
3
July
-13
Au
gu
st-
13
Se
pte
mb
er-
13
Octo
be
r-1
3
No
ve
mb
er-
13
De
ce
mb
er-
13
Jan
ua
ry-1
4
Fe
bru
ary
-14
Ma
rch
-14
Ap
ril-1
4
Ma
y-1
4
Jun
e-1
4
July
-14
Au
gu
st-
14
Se
pte
mb
er-
14
Octo
be
r-1
4
No
ve
mb
er-
14
De
ce
mb
er-
14
Jan
ua
ry-1
5
Fe
bru
ary
-15
Ma
rch
-15
Ap
ril-1
5
Ma
y-1
5
Jun
e-1
5
July
-15
Au
gu
st-
15
Se
pte
mb
er-
15
Qu
an
tity
(p
er
1,0
00
MT)
Total Quantity Philippines Indonesia
23
REPERCUSSIONS ON THE PHILIPPINES
• Short Term• If price fails to improve, Philippine ore prices continue to be pressured by the
increasing production cost in China.
• With improvement to nickel price in 2016, we expect Philippines ore to gain
some healthier margin compared to the Indonesian ore.
• Medium Term• New equilibrium will be formed, but Philippines’ nickel ore price will continue
to be higher than Indonesian’s with higher processing cost in Indonesia.
• NPI from Indonesia as well as Philippines’ ore will fill what was previously all
NPI nickel units produced within China.
• Long Term• Philippines’ Government Action?
• Indonesian Nickel Production
CONCLUSION
29
• PT. Indoferro will commission its second phase project by mid
2016, adding a 12,000MT to existing capacity.
• According to the ESDM, a total of 43 projects will have
commenced in Indonesia form 2014-2017.
• 2016 ~ 113,000MT
• 2017 ~ 173,750MT
• OR 154,940MT
• A gradual shift of nickel capacity from China to Indonesia.
• LME Nickel to improve in 2016.
• A new equilibrium will be reached for Philippines’ laterite ore,
where it will benchmark against Indonesian NPI prices and
vice versa.
QUESTIONS FOR DISCUSSION
30
• What’s going to happen to China when
Philippines scale back its ore production?
• Does it make sense to build processing
plant in Philippines, or is it better to build
in Indonesia, given the higher ore grades
and larger deposits?
• How about the Japanese Nickel Industry?