Indonesia Staging A Strong Comeback

Pertamina, Indonesia’s largest integrated energy company, is leading the charge to a greener future with its new policy initiatives that support the transition to clean energy technologies and net zero carbon emissions.

For many companies, Environmental, Social and Governance (ESG) and sustainability are just marketing buzzwords. However, for Pertamina, the largest integrated energy company in Indonesia, ESG and sustainability are the fundamentals of its future growth.

Over the years, Pertamina has not only demonstrated its relentless commitment towards ESG, but it has also made huge progress in incorporating ESG and sustainability into its business operations, as well as promoting sustainability across the oil and gas industry and in Indonesia.

Marching Towards a Sustainable Future

Pertamina understands that ESG and sustainability cover a wide area—from making a positive impact on the climate and environment to becoming a good employer and corporate citizen.

To ensure that Pertamina stays focused on its ESG journey, the company has developed a Sustainability Policy and formed a Sustainability Committee chaired by its President Director and CEO Nicke Widyawati, who appeared on Forbes’ list of the World’s 100 Most Powerful Women in 2020 and 2021. Other members of the committee include board members and subject matter experts.

At the group level, Pertamina has implemented 16 ESG priority initiatives. These initiatives are in line with global standards such as the United Nations Sustainable Development Goals and Task Force on Climate-related Financial Disclosures.

Integrating ESG Into Operations

While policies are important in helping an organization to kickstart its ESG journey and stay on course, it is also important for Pertamina to have the right processes in place.

To ensure that it integrates ESG into its operations, Pertamina has adopted numerous international standards governed by the International Organization for Standardization (ISO), including the ISO 14001 on environmental management; ISO 45001 on occupational health and safety; ISO 26000:2010 on social responsibility; and ISO 37001:2016 on energy management.

Through a holistic implementation of ESG, Pertamina has shown strong progress. This year, the company received an ESG Risk Rating by Sustainalytics of 22.2, and was assessed to be at “medium risk” of experiencing a material financial impact from ESG factors, on par with global companies. With this score, Pertamina is ranked No. 7 out of 256 companies in the oil and gas industry, and No. 7 in the integrated oil and gas sub-industry.

This was a significant improvement from Pertamina’s ESG rating of 41.6 (severe risk) in February 2021 and 28.1 in September 2021. The improvement in ratings shows Pertamina’s commitment to achieving its ESG goals.

Leading Indonesia’s ESG Agenda

This year, Widyawati has also taken on the role of Chair of the Energy, Sustainability & Climate B20 Task Force. She is tasked with developing policy recommendations for a green energy transition.

The B20 task force proposes three policy recommendations. First: increase global cooperation to accelerate the transition to sustainable energy utilization by reducing carbon emissions.

Second: enhance global cooperation to ensure a fair, orderly and affordable transition to sustainable energy utilization across developed and developing countries.

And last but not least: encourage global cooperation to improve energy security at the consumer level by providing access to clean and modern energy.

Comprehensive ESG Strategy and Initiatives

Pertamina’s ESG strategy is mainly focused on 10 areas, including addressing climate change, reducing environmental footprint, protecting biodiversity, prevention of major accidents, cyber security, community engagement and corporate ethics. Each area of focus comes with their respective medium- and long-term targets.

To achieve these targets, Pertamina has identified various initiatives that would be executed in phases until 2030, including the formulation of a net zero roadmap, the promotion of human rights, ESG financing and more.

“One of the most important targets we are aiming for is to reduce our greenhouse gas (GHG) emission by 30% by 2030, in comparison to the 2010 baseline. This is key as it supports the global fight towards climate change and Indonesia’s goal to achieve net zero emissions by 2060,” Widyawati says.

Making Earth Greener

Pertamina is currently taking the lead in the area of energy transition in Indonesia through several efforts. Today, Pertamina’s geothermal plants across 15 sites in Indonesia can produce 1.8 GW of electricity, and the capacity is expected to double over the next five years.

In the area of green hydrogen production, Pertamina is on track to commercialize its green hydrogen plant, which is capable of producing 8,600kg of hydrogen a day from its geothermal fields. The plant, which is expected to be operational next year, will start with an initial capacity of up to 100kg a day.

Pertamina is also taking a strategic role in Indonesia’s integrated ecosystem of battery and energy storage. It is collaborating with several state-owned companies to develop the battery-powered electric vehicle (EV) industry. Recently, Pertamina launched general-purpose electric charging stations as part of its efforts to encourage the growth of the EV ecosystem in Indonesia, which is pollution-free and environmentally friendly.

To help drive down carbon footprint and promote new and renewable energy, Pertamina has implemented the use of solar energy in several operation areas such as Dumai, Cilacap and its Green Energy Fuel Stations with 1-2 MW capacity. In April this year, Pertamina increased its capacity of solar energy up to 25 MW to supply its Rokan projects. The company also utilizes solar cells in several refineries.

Besides that, Pertamina has upgraded some of its refineries so that they are able to produce greener fuels derived from palm oil such as biodiesel, green diesel, green avtur and green gasoline.

Lastly, Pertamina has implemented carbon capture, utilization and storage (CCUS) in enhancing the production of several oil and gas fields. The CCUS implementation in enhanced oil recovery is proposed to take place in Sukowati Field, while the implementation in enhanced gas recovery is proposed to take place in Gundih Field. These two programs, part of the company’s efforts to reduce its carbon footprint, are now in subsurface study stage.

Setting More Ambitious Goals

Pertamina’s efforts have helped to reduce its GHG emissions by at least 7.4 million metric tons of carbon dioxide equivalent since 2010.

While industry observers may perceive Pertamina’s target of 30% emission reduction by 2030 as ambitious, Widyawati believes Pertamina can achieve more; the company is currently “evaluating a more ambitious emission reduction target.”

Widyawati says, “Consequently, every line of business in Pertamina, including upstream, must contribute to our existing and future target.”

Efforts Recognized Globally

Pertamina’s efforts have not gone unnoticed; the company has won several awards in recognition of its sustainability practices over recent years, including the Corporate Register Reporting Award, Global Corporate Sustainability Award and Asia Sustainability Reporting Rating.

Pertamina constantly engages national and international partners to ensure the growth of new renewable energy, putting its vision and mission on a swift path to becoming a world-class energy company.

“Pertamina is moving progressively in producing clean energy and achieving net zero GHG emission. These achievements will motivate us to keep improving and to be a globally responsible company,” Widyawati says.

The country’s leading bread company has achieved new levels of success despite the challenges of the pandemic.

Sari Roti, a well-known household brand for bread owned by PT Nippon Indosari Corpindo Tbk., continues to reinforce its position as the leading bread company in Indonesia by leveraging its advanced manufacturing processes, extensive distribution network and innovative streak to fuel growth. The company now controls a 90% market share in Indonesia’s mass-produced bread products segment.

It opened four new plants in the last four years, bringing the company’s total production capacity to 5.1 million pieces of bread per day produced in 14 strategically located factories across Java, Sumatra, Kalimantan and Sulawesi. Another plant in Pekanbaru is scheduled to open next year to meet the country’s growing demand for bread and cakes.

Recently, Indosari launched a new category of cakes through the Sari Kue brand. It also plans to launch its own chocolate spread and chocolate milk, following the rising popularity of its chocolate flavor—used in its bread fillings—among local consumers.

Catering to Local Tastes

Sari Roti and Sari Kue offer more than 100 product varieties developed based on local tastes and lifestyles, and catering to different consumer income segments. A few of the top-selling products are: Roti Tawar Special and Double Soft, and Roti Gandum in the loaf bread category; Roti Sobek and Roti Kasur in the sweet bread category; and dorayaki, cheesecake and lapis Surabaya among the cake offerings.

Indosari employs advanced technology to ensure high-quality products known for its softness. These products are distributed through an extensive sales network spanning 75,000 sales outlets across 34 provinces in Indonesia; they are available at minimarts and supermarkets, as well as general trade outlets such as small shops and tricycles, and through direct sales to homes and schools.

Bouncing Back Strongly

Indosari was founded by the Salim Group, the Yap family and Pasco Shikishima of Japan. Wendy Yap, who is the co-founder, President Director and CEO of the company is the daughter of the late Piet Yap, one of the founders of PT Bogasari Flour Mills of Indonesia. In 2010, Indosari became the only bread company to be listed on the Indonesia Stock Exchange. In November 2017, private equity firm KKR became the company’s third-largest shareholder through a rights issue.

Indosari’s strategy to focus on developing Indonesia’s bread market has yielded positive results. Despite the challenges of Covid-19, the company recorded an outstanding performance for Q3 2022, achieving record-breaking sales of IDR 1.04 trillion (US$62.4 million), up 22% compared to the same period in the previous year.

Indosari has also been successful in managing raw material and production costs even as prices in the commodities market continue to rise due to the unstable global political and economic environment. In Q3 2022, the company achieved IDR 222 billion (US$13.3 million) EBITDA and IDR 126 billion (US$7.6 million) net income, reflecting healthy margins of 20.7% and 11.7% respectively.

As Indonesia and the rest of the region emerge from the pandemic, Indosari will continue to deliver growth and capture new opportunities by taking advantage of its financial, innovative and management strengths through its leading position in the industry. The company will also continue to work on executing its Environmental, Social and Governance (ESG) plans in all its plants throughout Indonesia.

www.sariroti.com

Backed by half a century of experience, PT Sumber Tani Agung Resources Tbk is positioning itself for future success in the palm oil industry.

STAA’s success is reflected in its strong track record of business and revenue growth over the years. This outperformance is expected to continue, underpinned by a number of robust growth drivers.

Looking ahead, the company’s palm oil production is expected to improve due to the plantations’ trees at their prime age (average age of its palm trees are 13 years), consistent application of fertilizers and continuous improvement in plantation management as well as strong demand from export destination countries that continue to rely on palm oil products.

STAA’s plantations are located in areas with sufficient rainfall to ensure the rapid growth of oil palms and maximum production. The company also aligns its operational management approach to the topography of the plantation to maintain cost efficiency.

These efforts have helped STAA obtain higher production yields than the industry average and become one of the top performers in terms of profit per hectare.

The group aims to own 60,000 hectares of planted area by the end of 2025 and regularly evaluates acquisition opportunities that meet its stringent investment criteria. In September, STAA acquired around 6,000 hectares from IMC Plantation with a transaction value of IDR 306 billion (US$18.4 million).

“We may not be the biggest plantation in terms of size, but what matters more is our outperformance compared to our competitors. Our results and market capitalization speak volumes about our success,” says Widjaja.

To continue its expansion, STAA will strengthen its production capacity of 60-90 tons/hour by building two additional CPO mills in Central Kalimantan and South Sumatra by next year in order to align its CPO production rate with its fresh fruit bunches production growth.

Expanding Downstream

The CPO industry in Indonesia is supported by the government’s B30 program, which stipulates that 30% palm oil-based fuel must be blended into the country’s biodiesel to lower its fuel imports and boost domestic production of palm oil. B30 has helped to stabilize CPO prices since its rollout in December 2019.

Analysts expect demand for biodiesel to remain strong due to rising crude oil prices. According to a report by S&P Global, Indonesia’s use of palm oil to make biodiesel is expected to rise by 23% by 2030, while biodiesel use is projected to increase by 7% over the coming decade.

As the Indonesian government encourages companies to produce more value-added products, STAA has decided to venture into the downstream business to fuel growth. The company is well-positioned to capitalize on this opportunity as it is able to supply at least 60% of the raw material requirement for a CPO refining plant.

As part of this downstream expansion, STAA is currently constructing a refinery and fractionation plant with a capacity of 2,000 metric tons CPO per day, a docking facility, and a 64,000-metric ton storage tank located on a piece of land measuring 42.6 hectares in Dumai, Riau. The project is expected to be commissioned in the last quarter of 2023.

Leveraging Talent and Technology

STAA’s 50-year track record in the industry, coupled with its superior operational and production performance, has been a key competitive advantage for the company. At the heart of its success, however, is the group’s experienced and committed management team, which boasts an average experience of 30 years in the palm oil sector.

The team has consistently demonstrated its ability to improve operational processes, manage price volatility and identify new business opportunities such as finding suitable locations to plant oil palms and build CPO mills. It has also been able to empathize with local cultures in areas where the company operates and implements appropriate Environmental, Social and Governance (ESG) strategies.

“We believe that the quality of our management team is paramount to maintaining and developing our business amid increasing market competition,” says Widjaja.

STAA is also leveraging technology to improve efficiency and cut costs. Among other initiatives, it has implemented automated solutions for harvesting, fertilizing and maintenance, and drone technology to monitor sites at its plantations.

Fostering Sustainable Growth

The STAA management team understands that the group’s operations cannot be separated from the environment where it operates, and that it has a responsibility to the local environment and communities.

To this end, the company has worked diligently to integrate sustainable processes into its operations; these efforts have been accredited by the government and international organizations. For instance, STAA has acquired ISO 9001, ISO 14001 and ISPO certifications and also strives to meet RSPO certification requirements to ensure its plantations satisfy independent evaluation standards.

“Sustainability involves meeting current needs without sacrificing future generations. We understand that sustainability processes are key to improving synergy and ensuring fairness to all our stakeholders,” says Widjaja.

STAA has built good relationships with the local communities and authorities in Sumatra and Kalimantan through various corporate social responsibility programs. Under the nucleus-plasma plantation scheme, for example, STAA supports small plantations managed by cooperatives located around the company’s main plantation area.

STAA has also adopted the 3R principle (reduce, reuse, recycle) in its waste management strategy. The company owns a biogas power plant that converts liquid waste into electricity of approximately 1 megawatt, which supports its kernel crushing plant to reduce greenhouse gases. It uses environmentally friendly fuels such as fibers and shells to replace fossil fuels and turns liquid waste into plant nutrients. The group is also conducting a feasibility study to build a solar panel farm on one of its sites.

Widjaja says, “The oil palm business has been our core business and focus for over 50 years; we are not engaged in any other business. This single-minded dedication to our industry has allowed us to develop our operational capabilities and build a sustainable business that is able to compete effectively with other leading plantation companies.”

www.sta.co.id

Indonesia’s leading venture capital firm, Alpha JWC Ventures, is successfully growing and nurturing tech’s next big things despite the challenging market conditions.

Amid an uncertain environment for the global technology sector, innovative startups from Southeast Asia continue to attract the attention of investors seeking new growth opportunities. The region’s technology startups could be valued at US$1 trillion by 2025, up from US$340 billion in 2020.

Within Southeast Asia, Indonesia has been a bright spot in the tech and startup ecosystem in recent years. This trend is fueled in part by Indonesia’s resilient economy; the Asian Development Bank expects the region’s largest economy to grow by 5.4% in 2022 and 5.0% in 2023, supported by robust consumer demand and healthy commodity exports.

In particular, Indonesia’s early- to growth-stage investments present an attractive risk-reward profile for investors. Already home to a number of tech unicorns, the country saw startups raise US$9.4 billion in 2021, almost three times the US$3.42 billion raised a year earlier. Homegrown venture capital (VC) firms have also been actively investing, further driving the industry’s growth.

One key player in this space is Alpha JWC Ventures (Alpha JWC), Indonesia’s first independent and institutional VC firm. Established in 2015, the firm has grown to become a leading player in Southeast Asia’s VC scene, with total assets under management of around US$700 million across three funds. Its portfolio of over 70 companies features four unicorns and 27 centaurs, with valuations of between US$100 million and US$1 billion.

Thriving Despite Challenges

While the global economy has slowed down in 2022, the firm continues to invest in exciting ventures across sectors and sizes in Southeast Asia. Notable investments include a US$120 million Series C round for Indonesia’s leading e-grocery startup Sayurbox and a US$30 million Series B round for regional e-commerce aggregator Una Brands.

Despite massive correction in valuations hitting tech companies globally, Alpha JWC continues to see improvements in its fund performance. This year, its net asset value has increased by 10.5% for Fund 1 (Vintage 2016) and by 8.2% for Fund 2 (Vintage 2019) compared to last year. Meanwhile, its Fund 1 DPI has reached 0.46x and its Fund 2 DPI is at 0.35x.

The company says its consistent stellar performance is not possible without the right investment strategy and portfolio management. The firm prides itself on its deep market expertise and its ability to shape trends.

However, what sets Alpha JWC apart from its peers is its focus on value creation through its Alpha-X initiative. Having held on to this approach since the firm’s inception, Alpha JWC has perfected its strategy for portfolio support. With around 40 team members in Indonesia and Singapore, the firm is ready to help founders grow on all fronts, from business strategies and marketing to government relations.

Jefrey Joe, Co-Founder and General Partner at Alpha JWC says, “Value creation has been our milestone and vision since the beginning of Alpha JWC Ventures. As a first mover, we have extensive learnings and experience to build a solid platform for our portfolio that keeps on getting better in any circumstances, including when facing the current market challenges.”

Finding and Nurturing the Next Big Things

Today, Alpha JWC portfolio companies are leaders in their respective sectors and across different venture stages—whether its health foods startup Lemonilo in the consumer segment or digital lenders Funding Societies and Kredivo in the fintech space.

The firm is also capitalizing on the significant opportunities in Indonesia’s agricultural industry, which is the largest contributor to the country’s GDP at 13%. Some of its investments in this space include e-grocery Sayurbox, agriculture-focused B2B platform AgriAku, and end-to-end chicken farm management startup Pitik.

“Our portfolio companies democratize agriculture with technology to disrupt the traditional industry landscape, covering upstream to downstream, as well as supply chain innovation,” says Alpha JWC’s Co-Founder and General Partner Chandra Tjan.

In another move to diversify its portfolio, Alpha JWC has entered Indonesia’s fast-growing electric vehicle sector with its investment in ALVA, which launched its first electric motorcycle Alva One in August. Indonesia has the highest two-wheeler ownership penetration in the world at around 42%. The country is also the third-largest market for two-wheelers, with 6 million motorcycles sold annually.

Through its investments, Alpha JWC has debunked the notion that early-stage startups and profitability are mutually exclusive concepts. For instance, one of the firm’s investee companies, coffee chain Kopi Kenangan, has chartered a path to profitability since its founding in 2017; its strategy has helped the company reach unicorn status in less than four years.

“We are seeing a more normalized investment landscape for tech startups, allowing founders to focus on business fundamentals and a path to profitability,” says Tjan.

Expanding the Ecosystem

Beyond growing its portfolio, Alpha JWC is also at the center of Indonesia’s tech ecosystem, from becoming the lead knowledge partner of the G20 Digital Innovation Network to co-hosting Grab’s accelerator program this year.

As part of its efforts to groom the next generation of tech talent and startup founders, the VC launched iGnite, a program that shares knowledge and expertise in collaboration with education institutions in Indonesia and Singapore. It also partnered with global companies such as Google to launch its workshop series under the Alpha-X program, which aims to upskill founders in its Southeast Asia portfolio.

Alpha JWC continues to set its sights beyond Indonesia, with 2022 marking the firm’s entrance into the Philippines through investments in mom-and-baby e-commerce platform Edamama and e-grocery startup Builtamart. To date, Alpha JWC’s portfolio is present in Indonesia, Singapore, Malaysia, Thailand, Vietnam, the Philippines, Taiwan, and the U.S.

“While we are building Indonesia to become the next global tech hot spot, we also want to build better economies in Southeast Asia so that it could offer the best yields possible for our investors. Aside from that, we are committed to nurturing founders and helping them build businesses that are not just profitable, but also have a positive impact on society,” Joe says.

The Langham, Jakarta is redefining the luxury hotel experience in the Indonesian capital.

The first Langham hotel in Southeast Asia carries all the heritage and glamour of the iconic brand, but imbues it with a modern twist that caters to today’s premium traveler. The ultra-luxurious Langham, Jakarta sits on the uppermost stories of a skyscraper in the vibrant Sudirman Central Business District (SCBD), with upscale shopping and entertainment just a stone’s throw away.

Staying true to its roots, the property pays homage to the refined British elegance of the iconic Langham Hotel in London, with Italian marble floors, grand columns and luxe furnishings gracing the space. Upon stepping into the hotel at the street-level arrival hall, guests are treated to the sight of a grand Lasvit chandelier—comprising 1,800 glass butterflies—before they make their way via express elevators to the Sky Lobby reception on the 62nd floor.

The Langham, Jakarta’s 223 stylishly appointed guestrooms and suites give one a sense of residing in an opulent home away from home. Each room features plush armchairs, marble bathrooms with deep soaking tubs and floor-to-ceiling windows.

For those seeking a superior experience, The Langham, Jakarta’s 336-square meter Presidential Suite will not disappoint. The suite on the 60th floor boasts a grand foyer, a spacious lounge and personal butler service. One can also indulge in a dedicated study and an elegant dining space accompanied by panoramic views of the Jakarta skyline.

“We are proud to be the first Langham hotel in Southeast Asia. Our beautifully-designed property offers the refined British luxury that the Langham brand is known for, and the service and amenities to match,” says Alexander Poindl, General Manager of The Langham, Jakarta.

A Destination Under One Roof

Exploring The Langham, Jakarta is a travel experience in itself. Whether it’s Chuan Spa, inspired by traditional Chinese medicine philosophies, the city’s highest heated indoor sky pool on the 63rd floor or the outdoor pool at The Hampton Garden on the 6th floor, guests will be spoiled for choice when it comes to pampering themselves.

Meanwhile, The Langham, Jakarta is proving to be a haven for food connoisseurs. Each of the hotel’s high-end culinary offerings is an unforgettable gastronomic experience whether it’s modern British-European fare at Tom’s by Tom Aikens on the 62nd floor or the all-day dining treats at the grand café, ALICE, an intimate space inspired by Alice’s Adventures in Wonderland.

Also on offer is T’ang Court, the legendary Cantonese restaurant. Morimoto, a Japanese restaurant helmed by acclaimed Iron Chef Masaharu Morimoto, and a rooftop bar are scheduled to open in early 2023.

“We have partnered with some of the world’s renowned chefs, such as Tom Aikens and Masaharu Morimoto, to bring the best of the culinary world to our guests,” says Poindl.

With 2,100 square meters of flexible event space, the hotel is also ideal for those who wish to host memorable weddings, high-level conferences or other large-scale events. The highlight is the grand pillarless ballroom that can hold some 600 guests for cocktails.

The Langham, Jakarta is set to become a landmark of the ultra-luxury hotel and lifestyle destination in the Indonesian capital as it proudly follows in the tradition of the legendary Langham brand.

www.langhamhotels.com