Business Review Asia magazine - May 2017

M ay 2017

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ORPEA: INSIDE CHINA’S FIRST OVERSEAS CAREHOME PROVIDER TOP 10 MOST EXPENSIVE CRICKETERS IN THE 2017 IPL

MINIYA CHATTERJI JINDAL STEEL’S CSO TALKS SUSTAINABLE STEEL

25th-26th May // Shanghai

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EDITOR’S COMMENT

SUSTAINABLE ASIA WELCOME TO THE May issue of Business Review Asia.

On the cover this month is Miniya Chatterji, the stellar CSO at Jindal Steel. We speak to her to learn how one of India’s key industrial companies is driving sustainability across its operations.

We also explore the successes of PT Merdeka Copper Gold Tbk – a coppergold miner that is set to make a significant socioeconomic impact to East Java, Indonesia.

Keeping with the theme of environmentally friendly innovation, we also explore the solar PV battery market in Southeast Asia in an interview with Jamie Allen, Business Manager Australia & Pacific at LG Chem.

Last but not least, we take a look at the ten most expensive cricket players in the 2017 IPL.

Enjoy the read!

Nye Longman Editor Nye.Longman@bizclikmedia.com Join the debate on Twitter - @MrNLon @BizRevAsia

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06 steel sustainable

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Most expensive cricketers in the 2017 IPL

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PT Merdeka Copper Gold Tbk Dairy Farm Group

Mining

Supply Chain

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Healthcare

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TNB REMACO Energy

PROFILE

sustainable

steel Heading sustainability at one of India’s premier industrial companies is no easy task, but stellar CSO Miniya Chatterji is leading the charge Writ ten by: NYE LONGMAN

PROFILE

JINDAL STEEL AND Power Limited (JSPL) has experienced significant expansion in recent years. As India’s third largest steel producer – and with significant mining, energy and oil interests – the company’s operations affect the lives of countless people. Having grown in multiple directions, the 10

May 2017

company recognised that it needed to double down on its sustainability efforts. Enter Miniya Chatterji. As JSPL’s Chief Sustainability Officer, she has overseen a transformation in how sustainability is perceived and implemented across the company.

By combining a holistic mixture of internal and external awareness

S U S TA I N A B L E S T E E L

Miniya Chatterji

One of India’s most notable businesswomen, Miniya Chatterji has certainly had an interesting career. Alongside obtaining her PhD and Masters from Sciences Po Paris, she has also worked with the likes of The Wharton School, Harvard University, and INSEAD. Before ditching a traditional career to work at Jindal, Chatterji worked for Goldman Sachs and also managed hedge funds on the AUM in Paris.

She is on the Steering Group for Sustainability at the United Nations Global Compact India, and the World Steel Sustainability Expert Group. Chatterji has been awarded by the Navoothan Foundation for her personal social commitment.

She has also been awarded the CSR India award 2016 for corporate social responsibility. Chatterji is a Jury Member for the Million Dollar Global Teacher Prize and a Jury Member for The Circulars award at Davos.

programs with a range of community investments, energy saving measures, and productivity drives, JSPL is set to become a regional leader for sustainable business in one of the most challenging industry verticals.

She explains: “Two years ago, the company expanded at a fast pace, both in revenues and geographical

footprint. We were employing far more people than ever before, had built schools, universities and hospitals for the local communities around our manufacturing units.

“With growth also comes the need for systems and alignment across departments in the business.

This was the point in time that we introduced sustainability as a central node that ensures organisational longevity as a priority at JSPL.”

Operations Alignment across such diverse operations is crucial. All told, JSPL has assets in steel, power, mining, oil and gas, and infrastructure.

Deeply involved in the country’s steel industry, the company manufactures and sells a range of steel products, as well as iron ore.

Furthermore, JSPL’s product portfolio includes construction products and materials; its construction solutions category includes fabricated steel, speedfloor, light gauge structures, and insulated dry wall panels.

The company also has an aviation services and machinery division.

According to the latest figures, JSPL has an installed steelmaking 11

PROFILE

capacity of over 6.75 million tons per annum (MTPA); an installed power generation capacity of approximately 5,060 megawatts, and pellet-making capacity of over nine MTPA. Needless to say, the opportunity to leverage savings across these facilities is significant and even the smallest change has the potential to make lasting and widespread change.

Knowing where to look is key.

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Sustainability Forming a strategy to make JSPL more sustainable was not easy and required some frank introspection.

Chatterji explains: “The challenge is to percolate the importance of the global sustainability to each one of my employees on the factory floor. Every employee needs to be convinced and to contribute for sustainability to be a success across the company.�

S U S TA I N A B L E S T E E L

“The CSO’s role is successful only when employees join hands and work together to take the entire company on the path of holistic, authentic, and long term growth” –M iniya Chatterji, CSO, Jindal Steel

How has this been realised? “The first thing we did was to ask every employee to define sustainability,” She explains. “In this way the entire sustainability agenda at JSPL is driven by the employees. They have a sense of ownership towards creating and indeed implementing the sustainability agenda.”

Employees are informed and empowered to ensure their behaviour promotes sustainability. Through

a series of town hall meetings and dedicated workshops, workers at JSPL learn to take full ownership of their behaviour, as well as learn about plant-specific sustainability issues.

“We also publish an annual report that lays out sustainability goals in great detail to internal and external stakeholders,” Chatterji adds. “JSPL’s CEO is a great supporter of sustainability at the company and he does not fail to emphasise our agenda to employees in the course of his meetings with various business heads.”

Every year, furthermore, JSPL collaborates internally to define its top ten sustainability priorities. As a result of these meetings of minds, the company has created two new dedicated departments – one for risk and compliance management, and another for energy management.

Chatterji explains that this also led to a more focused approach to direct CSR work: “We also restructured our social projects to focus on just three themes: health and nutrition, education, and development infrastructure - and create a large impact in those.”

Looking to the future, improving energy efficiency will continue to be 13

PROFILE a big theme at JSPL. But operational changes need to be supported by more sustainable business practices, which is why the company is creating sustainable financial frameworks and improving business models in key socially-facing areas.

The role of the CSO While CSOs are not a new invention, their place on boards across the world is far from widespread. And unless their work is very much

involved in top level decision making, Chatterji affirms, then the position is little better than a decorative one.

For her, success is purely results driven and rests on her ability to bring together the whole company.

“This is a change maker’s role,” she adds. “It cannot succeed by merely preaching to employees about how to do ethical business and so on and so forth. The CSO’s role is successful only when employees join hands and work together to take the entire company on the path of holistic,

“I made a conscious decision to do only what I absolutely love doing (without compromise). So all the things that I do, none of it feels like work” –M iniya Chatterji, CSO, Jindal Steel 14

May 2017

S U S TA I N A B L E S T E E L

authentic, and long term growth.”

Fulfilling such a challenging role requires a presence of character not typically found in usual exec culture. “I dropped my career at age 29,” She explains. “In fact I despise the word ‘career.’ I made a conscious decision to do only what I absolutely love doing (without compromise). So all the things that I do, none of it feels like work.

“I don’t think I have an ambition to move upward in hierarchy at all. My ambition is horizontal - to increase the scope of impact as much as I can make to improve the lives

of others. The CSO role - writing, being on juries and boards - all these things help me achieve that.

Having great mentors has been immensely helpful as well because it allows me to constantly learn.”

Chatterji observes that there are more organisations across the world are on the same sustainability journey, as well an increasing prevalence of supporting resources.

She concludes: “We feel that we have like-minded partners across the world with whom together we can achieve what we perhaps would have struggled to on our own.”

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TECHNOLOGY

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We speak to Jamie Allen, Business Manager – Australia & Pacific at LG Chem, about Asia’s potential for solar PV systems Writ ten by: NYE LONGMAN

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TECHNOLOGY

How much business potential does APAC have for LG Chem?

“Overall electricity prices are set to remain high in the APAC region.

They are predicted to continue to rise, making solar PV systems with value added batteries the most affordable and economical form of electricity. Renewable energy is the way of the future.

“Opportunities within the Southeast Asian region aren’t currently as large as other parts of APAC, but the market is slowly developing. If we look at Southeast Asia’s PV market Thailand is the largest, followed by the Philippines, Malaysia and Indonesia. From the grid’s point of view, it’s obvious that the necessity

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of ancillary service is increasing due to power fluctuations from renewable energy like solar farms.

“The major issue for Southeast Asian countries is investment and no clear advantage of power stabilisation through ESS, even

S U I TA B L E F O R S O L A R

though Grid status is gaining worth.

Recently, foreign investors from Japan, the USA or Europe are trying to invest in the ancillary service with ESS for PPA business with a local transmission company.

“In addition, funding companies such as World Bank, ADB or GFC are trying to support SE-Asian countries where power is not available, especially islands in

Philippines (total 7,000 islands) or Indonesia (total 14,000 islands).

“Even though the numbers aren’t as high within the Southeast Asian market as the other major markets (Europe, Japan, China), we can still see a growing market.

Not only in the PV section, but there is also business potential in terms of enhancing grid reliability, back-up power, and grid support.”

Jamie Allen

Business Manager – Australia & Pacific at LG Chem

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TECHNOLOGY

How do your battery systems offer consumers a better ROI? What makes them different from the competition?

What does the “The next generation LG Chem future hold for RESU batteries are completely redesigned, both technically and battery storage aesthetically. At the center, there in the region? is a newly developed battery cell, produced with a Lamination and Stacking process that lasts longer and provides a higher energy output.

“The previous model was the most energy dense product available on the market but thanks to the new advancements and design, the next generation RESU series supersedes its predecessor, not just in technology but with smaller dimensions, lower weight, higher power and importantly lower cost.

“The new range also offers more flexibility to install indoors or outdoors and a range of unit capacity solutions from 3.3kWh to 19.6kWh”.

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“LG Chem is currently working on a Microgrid project in small islands within the Philippines, while also suppling storage systems to Indonesia which are primarily used as a backup power supply.

Microgrid projects in Southeast Asia are expected to grow in the coming years, and storage systems as a backup solution are expected to grow as well. The solar market is already growing quickly, but ESS’s are not yet. Many countries in Southeast Asia are trying to create regulations for deploying ESS for power stabilisation or Micro-Grid projects”.

S U I TA B L E F O R S O L A R

What are the challenges of rolling out solar in the region?

“One of the key challenges to energy storage systems is of course cost.

Battery prices fell drastically in the past couple of years, and LG Chem as one of the largest li-ion battery manufacturers in the world, is playing a part in this trend. This is easy to see if you compare the price decrease between LG Chem’s new RESU series and the previous RESU6.4EX model.

We are constantly making progress by optimising production, ensuring cost competitive materials as a volume purchase and investing in R&D. “Other key challenges for residential solar storage include ensuring that only the safest, highest quality and certified products can be sold into the region.

Such challenges can be overcome by providing more support to installers and distributors throughout the LG ESS Partner Portal program. The program offers material and incentives on LG Chem batteries and provides a central place for questions to be answered.”

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TECHNOLOGY

What does innovation mean for LG Chem?

How is this achieved?

“As you might know, our slogan is ‘innovation for a better life’. We are all constantly pursuing this goal, one of the main reasons for this is that the team prides itself on making innovation, as well as providing customers with better solutions. It lets us develop new products, such as the new RESU series, quickly and these are recognised within the industry through winning highly known awards such as Intersolar.

“We believe LG Chem is one of the few companies who have developed battery cells specifically dedicated to energy storage systems. Many other producers usually use the same battery cell developed and mass produced for electric vehicles.

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The innovation DNA can be easily seen if we look at the company history as well. LG Chem was founded in 1947 and its main business was and still is the petrochemical business, but it has never stopped innovating by expanding its business in investing into new technology such as IT materials, li-ion batteries and the newly acquired LG Life Science which is also a part of this type of innovation.

“Large investments into R&D and production have led LG Chem to become one of the main leaders in the ESS business, having installed more than 1GWh since it entered the business. (If we count awarded projects, the number goes up to more than 2GWh!)”

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TOP 10

Top 10

most expensive cricketers in the 2017 IPL The Indian Premier League is well underway, with the eight franchises spending huge sums at auction to acquire the services of the world’s finest Twenty20 cricketers

W r i t t e n b y : TO M WA D LO W

TOP 10

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THANGARASU NATARAJAN (RS 3 CRORE)

Kings XI Punjab @lionsdenkxip Arguably the most remarkable story of the IPL auction – a rags to riches tale which ended with Kings XI Punjab buying Thangarasu Natarajan after seeing him make a name for himself playing in the Tamil Nadu Premier League.

9

KARN SHARMA (RS 3.2 CRORE)

Mumbai Indians @mipaltan With most of the teams having to field home-grown talent, not many Indian players were bought at auction.

However, Mumbai Indian’s bid made Karn Sharma the most expensive native player at the tournament.

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8

MOST EXPENSIVE CRICKETERS IN THE 2017 IPL

NATHAN COULTER-NILE (RS 3.5 CRORE)

Kolkata Knight Riders @KKRiders Australian fast bowler Nathan CoulterNile marks one of several fast bowlers being bought to bolster the strong native spin options open to the eight IPL teams. Coulter-Nile has had previous stints in the IPL with other clubs, including the Delhi Daredevils.

7

RASHID KHAN (RS 4 CRORE)

Sunrisers Hyderabad @SunRisers Rashid Khan is the first Afghan cricketer, along with Mohammed Nabi, to be bought at an IPL auction.

Afghanistan won plaudits at the 2016 World Cup, beating the West Indies and almost upsetting England.

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TOP 10

CHRIS WOAKES (RS 4.2 CRORE) Kolkata Knight Riders @KKRiders The England all-rounder has had a strong few seasons, taking vital wickets for England and often getting them out of trouble with the bat at the top of the lower order. He is one of several England players featuring in this year’s IPL. 28

May 2017

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5

MOST EXPENSIVE CRICKETERS IN THE 2017 IPL

PAT CUMMINS (RS 4.5 CRORE)

3

KAGISO RABADA (RS 5 CRORE)

Delhi Daredevils @DelhiDaredevils

Delhi Daredevils @DelhiDaredevils

A second Australian fast bowler makes the top 10. Pat Cummins is a regular for Australia in the short format, despite being just 23 years old. He made his test debut at the age of 18 and plays domestic cricket in New South Wales.

South Africa’s go-to bowler Kagiso Rabada has excelled in all formats over the past two years. The fast bowler is the third most expensive player in this year’s IPL, and will be playing home games in the capital, Delhi.

4

2

Kolkata Knight Riders @KKRiders

Royal Challengers Bangalore @RCBTweets

Trent Boult is New Zealand’s talismanic bowler in all formats of the game.

Bought for 5 crore, he said he is not interested in the money to be earned from the tournament, instead looking forward to playing in packed stadiums full of delirious Indian supporters.

A massive jump in cost takes us to the top two, both of which are England players. Fast bowler Tymal Mills recently impressed in England’s tour of India, and continues to play around the world for franchise teams in short format cricket.

TRENT BOULT (RS 5 CRORE)

TYMAL MILLS (RS 12 CRORE)

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TOP 10

01

BEN STOKES (RS 14.5 CRORE) Rising Pune Supergiants @RPSupergiants

Costing a huge 14.5 crore (£1.7 million), Ben Stokes is the IPL’s most expensive overseas player ever to have featured in the tournament. The aggressive all-rounder is a game changer in both innings and has embedded himself into the England team across all formats. His T20 prowess was amply demonstrated, somewhat ironically, in an extraordinary test innings in South Africa last year when he smashed 258 in 198 balls.

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MOST EXPENSIVE CRICKETERS IN THE 2017 IPL

8

NUMBER OF TEAMS IN THE IPL

2008 THE YEAR OF THE FIRST IPL TOURNAMENT

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Giving back to communities and driving success Written by Catherine Rowell Produced by Charlotte Clarke

DAIRY FARM GROUP continually gives back to local communities whilst finding new ways to remain competitive in the retail market

S

ince its establishment in the nineteenth century, Dairy Farm Group has been gradually acquiring a diverse portfolio, operating supermarkets and hotels, in addition to managing a number of manufacturing and building companies.

A member of the Jardine Matheson Group, Dairy Farm has cemented its growth and presence across Asia with over six thousand outlets and 180,000 employees. The company consistently looks at new ways to attract customers, whilst ensuring the benefits of modern retail are enjoyed by local people.

Operating in over 10 markets and with more than 38,000 products in stock, Dairy Farm has placed considerable investment within its current IT systems to facilitate a seamless delivery throughout its supply chain. Teams are able to set up strong order parameters to support the high number of orders placed to suppliers, but also guarantees the delivery of stock to various stores which are placed on shelves. $20 million has been invested in the Group’s management systems and approximately $25 million is invested in Dairy Farm’s operational budget each year.

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S U P P LY C H A I N

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D A I R Y FA R M G R O U P

‘The Group frequently promotes from the ground upwards, with the majority of store managers originating from the shop floor’

A BRIGHT FUTURE. A BETTER BUSINESS.

Unilever has a simple but clear purpose – to make sustainable living commonplace. We believe this is the best long-term way for our business to grow. On any given day, 2.5 billion people use Unilever products to feel good, look good and get more out of life – giving us a unique opportunity to build a brighter future.

To find out more visit unilever.com or www.facebook.com/unilever

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S U P P LY C H A I N

PARTNER COLLABORATION The Group places a strong focus on building relationships with suppliers to ensure effective stock control and product delivery, one such partnership is with multinational group Procter & Gamble. The duo has successfully worked together to see how Dairy Farm’s vehicles can be placed at full capacity to reduce fuel consumption in order to become increasingly cost effective within the Group’s operations. In addition, energy consumption is something the Group continually seeks to reduce, and has therefore implemented energy efficient bikes and LED lighting in all its warehouses and stores. Any savings which are made will therefore further enable the lowering of prices for customers.

Furthermore, Dairy Farm’s partnership with Unilever in Malaysia surrounding vendor management has enabled Unilever to oversee the inventory of one of the Group’s distribution centres and place an increased focus on the Group’s operations in the east of Malaysia. Whilst Unilever concentrates on 200 products, Dairy Farm has

thousands under its umbrella, situated in a number of different locations.

This partnership improved the Group’s sales by an impressive 30 percent and provided a reduction in inventory, while providing a platform in which Dairy Farm can engage with other multinational companies and develop further partnerships.

INTERNAL OPERATIONS With the aim to maintain positive relationships, Dairy Farm implements a number of Key Performance Indicators (KPIs) which measure the performance of the various divisions and places significant investment within employee development. Continuously looking for new talent, the Group operates a talent spotting programme to ensure opportunities are available for local people who understand the business and want to succeed at Dairy Farm.

The Group frequently promotes from the ground upwards, with the majority of store managers originating from the shop floor. Managers are also asked to look for individuals whom they feel should become their successors and spend time ample

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D A I R Y FA R M G R O U P

10k Number of employees at

Dairy Farm Group

coaching them, enabling local people to gain senior positions and provide quality services to customers.

Adopting a strong customer focus against an ever-changing consumer demand is vital. To this end, the Group has invested in a new automated order system, which removes guess work for customers and provides an increasingly attractive service.

Customers are the most valuable part of the Group’s business operations. Important feedback can be given through a customer care line which allows the Dairy Farm to adapt its processes accordingly and provide the best prices on all products.

In addition to regularly connecting with suppliers, employees, charities and placing focus on employee growth, the Group undertakes

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S U P P LY C H A I N

a number of sustainable initiatives to support local communities. The Group regularly partakes in direct farming and direct sourcing, partnering with local farms and building direct relationships, creating efficiencies and making a real difference for local farmers by sharing all profits equally, enabling customers to obtain a cheaper product and create efficiencies across the supply chain.

INCREASED COMPETITION Despite Dairy Farm’s ongoing success, it only takes one company to transform the retail industry, with companies such as Amazon repeatedly placing the Group’s traditional business model under threat. Consequently, in order to remain relevant and competitive, Dairy Farm will continue to take controlled risks and remain nimble, whilst ensuring high quality of services for customers within an ever-changing market. With an invaluable history, the Group is strong in both leadership and capability, with the desire to find new ways in serving and seeking new avenues to drive further efficiencies and success throughout its supply chain operations.

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INDONESIAN MINING

ON THE WORLD STAGE Written by Nye Longman

Produced by Richard Deane 41

PT Merdeka Copper Gold Tbk: Financially and environmentally sound, the Tujuh Bukit Project in East Java is set to be one of Indonesia’s finest mines

W

ith production already underway at Indonesia’s Tujuh Bukit Project in East Java, the company in charge, PT Merdeka Copper Gold Tbk, is already proving its worthiness for such an important undertaking. An Indonesian-owned operation, the company is set to oversee a profitable, safe, and sustainable mine that will pay dividends for shareholders as well as the local community. We

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speak to Merdeka’s CEO Colin Moorhead to discover how one of the country’s most promising mines in recent years will make the grade.

With an estimated Mineral Resource of some 99 million tonnes of ore at an average grade of 0.8 grams per tonne of gold, and 25 grams per tonne of silver, the near-surface ore deposits contain approximately 2.45 million ounces of gold and 79 million ounces of silver. The underlying

MINING

porphyry deposit has an Inferred Mineral Resource of some 1.9 billion tonnes at estimated grades of 0.45 percent copper and 0.44 grams per tonne gold making it one of the largest projects of its kind in the world. All told, the porphyry is estimated to contain 28 million ounces of gold and 19 billion pounds of copper.

“I come from 30 years mining experience working on some of the largest mines in Australia and PNG,”

he explains. “I’ve been asked to build a technical team capable of taking Tujuh Bukit to those standards. I’m proud to say we could take anyone from Australia and they would be impressed with our construction and operating standards”. Operations Merdeka is listed on the Indonesia Stock Exchange following a successful IPO in 2015 and controls the companies that hold the Tujuh Bukit mining leases.

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ATTITUDE. RELIABILITY. KINDNESS. AWARENESS. TEAM WORK. ORGANIZED We are a Heavy Equipments Rental company with more than 300 Units of Equipments. We also experienced in Earth Work Construction services, Toll Road, Dam and Mining Services.

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PT MERDEKA COPPER GOLD TBK

“What we’ve done is create an internationally respected, high standard and high integrity mining company” – Colin Moorhead, CEO

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May 2017

These consist of PT Bumi Sukesindo (BSI), which is permitted for mining production, and PT Damai Sukesindo (DSI), which holds the adjacent exploration permit. The company is fully engaged in Indonesia’s mining industry and, working to international standards, is focussed on developing the country’s gold, silver, copper and other mineral deposits.

The company has three major Indonesian shareholders, one of which is PT Saratoga Investama Sedaya, Tbk – the country’s premier investment-holding company, PT Provident Capital Indonesia, a leading investor in Southeast Asia, and Pak Garibaldi Thohir.

This winning combination ensures that the mine will remain liquid throughout its life.

“The technical mining potential in Indonesia

MINING

is huge,� Moorhead comments. “It has some of the biggest gold and copper deposits in the world. What we aim to do is create an internationally respected, high standard and high integrity mining company.

Tujuh Bukit has a typical epithermal gold oxide cap that has been developed as an open pit mine, overlying a two billion tonne sulphide porphyry copper deposit that could be developed in stages as a series of mass underground mines. This could set us up as a 30 plus year copper-gold producer.�

The oxide gold silver development commenced

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PEOPLE ACHIEVEMENT DEDICATION

Madhani provides clients with a complete pit to port mining solution. Our modern fleet of mining equipment includes hydraulic excavators ranging up to 350 tonne & haul trucks up to 150 tonne capacity.

Madhani construction services cover all commodity types and include mine site infrastructure and ore processing/handling facilities. Construction capabilities include airstrips, containment dams, equipment maintenance workshops, site camps, fuel storage tank-farms, explosive magazine facilities and site office complexes. We can supply, install and operate crushing plants, conveyor systems and port loading facilities.

We are always ready to meet the needs of our clients no matter where they are located.

Office Address: PT Madhani Talatah Nusantara, Alamanda Tower 12th Floor, Jl. TB Simatupang Kav. 23-24, Jakarta 12430, Indonesia Web: www.madhani.co.id | Email: info@madhani.co.id

CONSTRUCTION AND MINING CONTRACTORS

MINING

The number of staff at PT Merdeka Copper Gold Tbk

1,500

operations in December and produced its first gold in March 2017, just 18 months after construction work started.

This mine offers low costs and high margins. Using conventional open pit mining, the ore is crushed and agglomerated before being stacked on a heap leach pad where the gold is dissolved in a weak cyanide solution.

The pregnant solution is them pumped to an ADR (absorption, desorption, recovery) plant where

gold and silver is recovered and produced as dorĂŠ.

Initially the operation will process four million tonnes of ore annually and will produce on average 100,000 ounces of gold and up to 300,000 ounces of silver per year over the next decade.

Looking further ahead, Merdeka is also conducting a study on expanding the mine’s heap leach capacity to 50 million tonnes and its production rate from four million tonnes to six million tonnes per annum.

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PT MERDEKA COPPER GOLD TBK

“We have a commitment to spend 1.5 percent of our return revenue capital on local projects” – Colin Moorhead, CEO

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The second opportunity at Tujuh Bukit is to develop a series of underground mines to exploit the massive porphyry copper gold deposit that underlies the oxide mine. “We are currently doing the pre-engineering to put an exploration decline into the porphyry which sits below the oxide mine we are operating,” Moorhead adds. “That upper high grade zone (UHGZ) of that deposit is estimated to contain about 300 million tonnes at 0.8 percent copper and 0.8 grams of gold.” The decline will help Merdeka acquire the data needed to support a prefeasibility study for the first mass underground mine.

Sustainable mining The journey to developing one of Indonesia’s best deposits, and with that, one of its most reputable mining companies, has not been easy. Issues over ownership and permitting slowed progress before a single brick was laid. And once that had been taken care of, the company had the weather to contend with. Having centuries of experience locked into its workforce, Merdeka has been able to shrug off these risks, and ensure that the project has a positive impact on local businesses, the community, and the surrounding environment. No small order.

“We had the wettest year on record which hampered our earth works considerably,” Moorhead says. “We were able to handle those impacts and delays by using our status as an owner-executor.

TOTAL EXPLOSIVES SOLUTION! WHY DAHANA? DAHANA’s line of business covers Explosives Manufacturing, Drilling & Blasting Services and Related Services for customers throughout Indonesia and ASEAN Region. Dahana’s explosives users comprise of Mining Industry, both metal and non metal; Quarry & Construction such as cement, asphalt and andesite quarries and construction projects such as dams, roads, tunneling, irrigation, harbor and building demolition; Oil & Gas Sectors such as oil well perforating, seismic prospecting and also defense related.

Owing to its 25-year experience, DAHANA enjoys extensive customer’s trust for its proven exemplary integrated explosives services for various purposes and conditions, including bench blasting, trench blasting and underwater blasting, which are quite complex. Dahana has been able to handle the whole blasting process, starting from the designing, calculation, drill hole preparations, explosive configuration, explosives supply, blasting, up to the operational security.

DAHANA has been in operation for drilling and blasting work in more than 20 sites scattered in Indonesia under the support of its On Site Plant (OSP) and Mobile Manufacturing Truck (MMT), among others, is the one in operation at Mine Site of PT Bumi Suksesindo (BSI) in Banyuwangi, East Java.

Local Content

Customization

Go Green

As a domestic company, DAHANA uses local materials in the country for the products and services it produces. It is a form of approbation and support for the independence of the domestic industry.

With the support of Energetic Materials Center (EMC) as a center for production and research and development of energetic materials, DAHANA is able to answer the challenge for explosive material tailored to a variety of terrains and purposes.

DAHANA constantly grows along with the environment in their business activities The Green Concept applied to both of the management of buildings and products has resulted in numerous awards both nationally and internationally.

Menara MTH 17th floor, Jl. MT Haryono Kav. 23 Jakarta, Indonesia

www.dahana.id corporate@dahana.id

Total Service Solution The integrated Services of DAHANA range from production of explosives, drilling and blasting services to related services such as demolition,warehousing, consulting and licensing as well as the mobilization of explosives, also the explosives services for defense as propellants for large munition and small munition, rocket, PETN and warplanes bomb.

PT MERDEKA COPPER GOLD TBK

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OUR CLIENTS LIKE OUR VALUES • Openness • Trust and Integrity • Passion for Quality • Teamwork • Responsibility for our Actions • Can-do: Safely PT Prasmanindo Boga Utama, established in 1985, is one of Indonesia’s preferred Catering and Camp Services partners in the Mining and Oil & Gas industries. We strive to be a best-in-class provider of contract foodservice and support services; renowned for our professionalism.

Better known in the market as PBU we predominantly operate in remote locations across the archipelago with leading Indonesian, Multinational and International clients.

Our vast experience can be applied to the most demanding of challenges and we are committed to consistently deliver superior service in the most efficient way, for the benefit of all our stakeholders.

PT. Prasmanindo Boga Utama,Wijaya Graha Puri Block F 33 - 34 Jl Wijaya II , Kebayoran Baru, Jakarta 12160, Indonesia +62-21-7206621 | www.ptpbu.com | pbujkt@ptpbu.com

Email: info@psi-ind.com Website: www.psi-ind.com

PSI Drilling Services & Support Consistently providing successful, cost effective drilling solutions throughout the South East Asian mining & energy sectors. Currently operating in Indonesia, Malaysia, Thailand, Laos & Myanmar

MINING

I think if we were using an EPCM arrangement we could have had a large cost blowout.”

Unlike many players operating in the country’s mining space, Merdeka is fully owned by locals, with expats making up less than one percent of its workforce. But the company’s commitment to Indonesia doesn’t end there, as Moorhead explains: “On the community side we have a

commitment to invest 1.5 percent of our revenue on community social responsibility (CSR) projects.

“We are tailoring those projects to the needs of the people, which include capacity building, scholarships for kids, and helping businesses.

We are in the early days of that.”

The company initially also granted 10 percent of its shares to the government of The Regency of Banyuwangi, which

2012

The year that PT Merdeka Copper Gold Tbk was founded

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has effectively granted rights for local people to participate in these mining projects. The further intention of the share grant is to provide the community of Banyuwangi Regency with sustainable economic benefits from the gold mining project.

Protecting local water supplies is essential, and no fewer than six dams have been constructed with this specific purpose in mind. Moorhead adds: “We have two process water dams which take water from the catchment, one storm water pond which is a clay and plastic lined, and three environmental control dams that collects all the runoff. These can also handle the extreme rainfall events up to three times over. “We

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MINING

also have a detox system to manage cyanide and arsenic levels in excess process water, backed up by mercury scrubbers if required. Merdeka has also spent over 15,000 man-hours on safety training and continues to build skills and awareness in this regard.

With the Tujuh Bukit Project now in production, Merdeka has its sights confidently set on the future dividends that a mine of this size and quality is certain to bring. Its shareholders own and control a number of other Indonesian mining companies with assets and are looking for where it

makes sense to consolidate those under Merdeka. “In three to five years’ time we will have that copper project to prefeasibility level and ready to construct and potentially multiple operating mines producing a significant amount of gold per annum. If we are successful at that we could be a $3 billion company.�

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Because we care Written by Wedaeli Chibelushi Produced by Mariana Lee

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Nathaniel Farouz, CEO of Orpea China, tells the story behind China’s first foreign elderly nursing home

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H E A LT H C A R E

“

Our first impression was a mix between fear and pride,” Nathaniel Farouz explains.

As CEO of French healthcare firm Orpea’s Chinese operations, Farouz instated the first foreign elderly nursing home in China.

“Pride because we managed to open the first one in China, and fear because we thought ‘what if it doesn’t work? What if the Chinese culture is so different that people are not interested at all?’

Farouz refers to March 2016, when the care home company opened a 100 percent foreign invested elderly nursing home in eastern city Nanjing.

Farouz’s fear was justified. By offering high-end, high acuity services, Orpea split from the pack and carved a new route in China’s healthcare market.

Fast forward a year, and Orpea is planning to offer more homes across China, alongside management contracts. We ask Farouz how Orpea managed to successfully navigate the Chinese elderly care industry.

THE PRESENT SITUATION “The Chinese market has a strong

bias towards real estate investment…

Most of what is being developed at the moment is real estate covering younger, relatively healthy elderly people,” Farouz tells us. For a long time, China’s social care sector was dominated by government-sponsored welfare nursing homes with low medicalisation. In 2013, industry trends changed – there was a rising interest in real estate for the elderly. Investment in real estate increased, and like-minded homes multiplied across China.

This is definitely what we didn’t want to do,” Farouz says. “Our model relies on high-skilled medicalisation… what we brought to the market was something different. We are more service focused, healthcare focused - we’re not a real estate company.”

BREAKING BOUNDARIES By twinning a high-end product with well-trained staff, the firm is “pushing the frontiers of what people believed was possible to do in China”. Services are aimed at affluent customers who are 80 plus, with the ability to welcome people with heavy physical or psychological dependencies.

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ORPEA

50k Number of employees at ORPEA

The Nanjing home features 140 beds in 111 rooms, prices of which range from 15,000 to 40,000 yuan.

How can Orpea justify these prices? Personalised service is its key selling point. For instance, meals, nursing programmes and activity programmes are tailored to each individual, there are 24/7 nurse stations on every floor, and rooms are elaborately decorated.

Farouz adds: “People don’t know yet why they are going to need it, for the very simple reason that they don’t have a benchmark. They don’t know that such a product can exist. We aim at creating the benchmark and offering new products to the market. There is a need at the moment for facilities that are able to welcome elderly people, and provide a high level of nursing for people with dementia and physical or psychological disabilities”.

“Our model relies on high-skilled medicalisation…what we brought to the market was something different. We are more service focused, healthcare focused - we’re not a real estate company” Nathaniel Farouz, ORPEA China CEO

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H E A LT H C A R E

TRAINING UP This high level of nursing is also a unique selling point for Orpea.

Farouz tells us that in China there is typically “not much training provided to health care professionals in how to provide long term care to the elderly, people with dementia, Alzheimer’s disease etc.”.

To improve China’s healthcare training, Orpea launched a recruitment and training programme with a renowned hospital. The company created a training certificate in geriatrics in partnership with the Peking Union Medical College Hospital, one of the oldest, most

prestigious Chinese hospitals.

“Dr. Liu Xiaohong, the head of their geriatrics department is famous for pioneering modern geriatrics in China,” Farouz says. “We also had something to bring to the table concrete know-how and experience on how long term care should be provided and adapted to China. Most doctors and nurses in China are only trained for acute, short-term care.”

We ask whether students are required to work for Orpea after graduating. “No, no!” Farouz insists.

“It’s an open program, it’s not just for our staff. There are activities open to any healthcare professionals in

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ORPEA

NATHANIEL FAROUZ ORPEA CHINA CEO Nathaniel Farouz has been living in Greater China for over 10 years. He is the CEO of Orpea China, the Chinese subsidiary of the Orpea Group. The company is developing a network of nursing homes for elderly people, rehabilitation hospitals and psychiatric hospitals in China. Nathaniel’s first project opened early 2016 in Nanjing, Jiangsu province. It is the first fully foreign-invested nursing home in China to receive full governmental accreditation as well as medical licenses. Prior to this position, Nathaniel Farouz has worked in strategy and M&A for various multinational companies in Beijing and Kunming, Yunnan Province.

Nathaniel holds a MBA from HEC Paris, a Masters of Public Affairs from Sciences Po and a degree in Gerontology from La Sorbonne University. He speaks French, Chinese and English.

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“There is a need at the moment for facilities that are able to welcome elderly people, and provide a high level of nursing for people with dementia and physical or psychological disabilities�

Nathaniel Farouz, ORPEA China CEO

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ORPEA

China.” In Farouz’s view, an open course in Orpea’s approach will give the firm more options in the long run. He explains: “It’s open so that as many people as possible know about our approach; they spread the message and then maybe in the future recommend us or even come back to Orpea.”

So far, there have been four sessions of the course, with an average satisfaction rate of 93 percent.

DIH - World leader of modern rehabilitation total solution www.dihmed.com

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FACING CHALLENGES Farouz admits that along with successes like the training programme, there have also been challenges for Orpea. For instance, it had to overcome cultural differences between China and Europe, such as elderly Chinese people tending to go into nursing homes as a couple, or families strongly relying on the public hospital system.

“There are a lot of other differences, and of course we take them seriously, but they are superficial - they don’t affect the core of our business,” Farouz says.

Farouz and Orpea are happy with the Nanjing home’s performance, but how do other stakeholders feel?

“It generated a lot of interest, from governments, investors and of course from residents and their families,” Farouz says. The home is now filling up at the same pace as Orpea’s other facilities in Europe. The Nanjing home also received strong support from the Chinese government, particularly the Mayor and Vice Mayor of Nanjing.

FUTURE HOPES Moving forward, Orpea plans to open

H E A LT H C A R E

more nursing homes across China.

Farouz tells us that it’s working with various partners under different cooperation modes. “The first one is a self-owned project similar to the one in Nanjing - we will develop our own facilities and invest in their operation (without real estate) directly or through joint ventures. The second ones are management contracts: we’re especially pushing this kind of contracts, where we cooperate with partners who invest in the

facilities and the team,” he says.

Orpea is only a year into an ambitious adventure, yet it is already drawing a lot of attention from investors. An astute, determined company, Orpea stands in good stead for future expansion.

Farouz concludes: “Our model is not always the first one that comes to mind when people think about retirement homes. A lot of people will just rush into the real estate part of this business, but we actually represent the segment that brings the most value added.”

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MAINTAINING

POWER Written by Wedaeli Chibelushi Produced by Vince Kielty

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TNB REMACO

WE INTERVIEWED TNB REMACO’S MANAGING DIRECTOR ANUAR YUSOFF ABOUT THE COMPANY’S DIVERSIFICATION PLANS

T

NB Repair and Maintenance Sdn. Bhd. (TNB REMACO) is constantly diversifying itself and riding the changing landscape of the industry. Leveraging on technological development and clientele’s everchanging expectations, TNB REMACO is set to become a premier brand with holistic solutions in delivering customer’s trust in its services.

TNB REMACO is wholly-owned by Tenaga Nasional Berhad (TNB), of which is the largest electricity utility in Malaysia and one of the largest in the region with an asset base totaling $30 billion and customer base of more than three million users. TNB REMACO was first incorporated as a subsidiary of TNB in 1995. The company is managed independently as a business organization within the corporate structure of the TNB group.

While it shares the group’s core vision, values and culture, TNB REMACO nonetheless remains steadfast in the

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realization of its own corporate destiny.

Managing Director Anuar Yusoff explains the transformation in structure: “TNB REMACO used to be a small department supporting a bigger business. We did repair, maintenance and overhaul for their generating plants - their gas, steam and hydro turbines. It was in 1995 when we became a wholly owned subsidiary of TNB that we diligently geared our resources and expertise in realization of the vision and mission of the company.”

How does TNB REMACO balance diversification with loyalty to its parent power plants? “Previously, we were exclusively servicing TNB’s existing fleet of power plants but have expanded our services for newly developed power plants and are also actively providing services to independent power producers (IPP’s) such as Malakoff and Powertek, as well as oil and gas (O&G) sector,”

ENERGY

ANUAR YUSOFF

MANAGING DIRECTOR TNB REPAIR AND MAINTENANCE SDN. BHD. (TNB REMACO)

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Yusoff explains. Among the O&G clients serviced by TNB REMACO are Petronas Gas Berhad (PGB), Petronas MLNG and GE Power.

Not only is TNB REMACO diversifying from the traditional energy market, it’s also exploring different geographical spaces. “In the middle of 2004, we started going into international markets,” Yusoff explains. The company has business presence within the South-East Asia and MENA (Middle East and North Africa) region, such as in Myanmar, Singapore, Brunei, Indonesia, Yemen, Kingdom of Saudi Arabia and Vietnam.

Yusoff explains that TNB REMACO’s goal is to achieve 10 to 20 percent growth from overseas businesses: “I have to look at every opportunity to grow business locally as well as internationally. For the last three years, we started going aggressively into

the Middle East,” he says. Currently, TNB REMACO has three operations and maintenance (O&M) contracts in Kuwait, two in Pakistan and one in Kingdom of Saudi Arabia.

Although TNB REMACO has built a global presence, its roots are firmly planted in Malaysia: “As of December 2016, we have executed a contract for a Long-Term Service Agreement (LTSA) with Petronas Gas Berhad (PGB), the national petroleum company of Malaysia,” Yusoff says.

PGB awarded a MYR160 million contract to TNB REMACO for the maintenance of its gas turbine and related equipment for the Central Utility Facility (CUF) in Gebeng and Kerteh, for a duration of 6 years.

“Customer requirements keep on changing,” Anuar Yusoff says. “They keep on pushing their expectations.

For an example, TNB used to carry

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out a planned maintenance outage for roughly 50 days in the late 80s, but now clients requested a shorter outage period, and we have to work 24/7 to fulfill their requirements. To support that, we need to have highly skilled and dedicated personnel, and the latest equipment.” When the petroleum prices rose in the early 2000s, TNB REMACO lost some of these employees to the O&G sector.

However, the firm worked hard to develop teams of adept and robust personnel, and during the last five years has managed to maintain a low turnover. Yusoff adds, “We have a good remuneration package that is within the best in Malaysia. In terms of competencies, we have a systematic training system which is conducted by TNB owned technical training centre, namely ILSAS. We have a training module where for the first three years of entering into TNB REMACO, all personnel will enrol into dedicated training modules that covers both technical and management courses.”

And in embracing the rapid development of the technological changes, TNB REMACO is keeping abreast with the changes by continuously developing highly skilled personnel. “In terms of technology adaption, we regularly maintaining the integrity of that equipment by sending our personnel for various training and certification program, as we definitely cannot afford to have failed equipment or incompetent personnel,” Anuar Yusoff explains. TNB REMACO also has established a comprehensive condition monitoring program for its client in ensuring reliability and efficiency of their equipment. TNB REMACO also prides itself by having a Repair Centre, which is located in Connaught Bridge, Klang. The Repair Centre can be considered a gem for the industry in view of its capabilities for performing various repair and refurbishment activities.

TNB REMACO is collaborating with Original Equipment Manufacturers (OEM’s) for refurbishment of turbine

1,000

Number of employees at TNB REMACO

TNB REMACO parts and its components, apart from capability to perform bearing re-metalling, and reverse engineering services, just to mention a few of Repair Centre’s capabilities.

TNB REMACO also prides itself on having a varied field of services for potential customers. Anuar Yusoff says: “We call ourselves a onestop service provider - any client in energy related industry can utilize our expertise and services. We can assist them to design and build a power plant, perform the O&M of the power plant, conduct scheduled maintenance for the equipment, perform the test and diagnostic activities and also refurbish the turbine parts. At the end of the power plant life or its Power Purchase Agreement (PPA), TNB REMACO can also perform the decommissioning of the power plant and sell the parts. In a nutshell, TNB REMACO is capable of performing various activities during the whole life cycle of the plant”.

We ask Yusoff whether TNB REMACO has reached its full capacity.

“Our target revenue in 2020 will be MYR1.9 billion and we will be going more aggressively to overseas

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market, especially Pakistan,” he states. TNB REMACO also wanted to increase its presence in the oil and gas industry. Currently, its revenue is comprised approximately 90 percent from the power sector and only 10 percent from the oil and gas sector.

“In the current market conditions for the O&G sector whereby the petroleum price is dipping below USD60 per barrel, there is a promising chance for us in offering our services to the industry players. This is due to the fact that most of the O&G companies are currently opening

ENERGY

“WE CALL OURSELVES A ONE-STOP SERVICE PROVIDER - ANY CLIENTS CAN UTILIZE OUR EXPERTISE AND SERVICES” its door for alternative service providers rather that exclusively engaging the OEMs, of which is of premium pricing,” Yusoff says.

TNB REMACO also aspired to establish its name in the EPC (Engineering, Procurement and Construction) business. “We aspire to be one of the most reputable EPC contractors, because before this we were more involved in the Project Management and Consultancy (PMC), but not in the construction side. We are currently preparing ourselves to enter into the EPC business.”

Yusof’s vision for TNB REMACO is clear, and the expansion of the business plan for TNB REMACO was built on a solid track record and coupled by its impressive expansion strategy. TNB REMACO is no longer in a single market platform, and has huge potential to grow rapidly whether it be internationally or into other sectors. We can’t wait to see what TNB REMACO does next.

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