Quality management in crisis situation

Quality management in crisis situation

Instability and the rupiah's depreciation are difficulties faced by all business sectors. But for publicly listed PT Timah Tbk, these conditions have had a positive effect on its profits because 95 percent of its product is exported, while the remaining 5 percent is sold domestically. Only 15 percent of its production costs are in U.S. dollars.

PT Timah Tbk's marketing operations are handled through its Bangka island head office. It has two marketing subsidiaries in London and New Jersey.

Between January and June 1998, the company earned a net profit of Rp 305.7 billion compared to Rp 57.3 billion in the same period last year.

PT Timah Tbk's President Director Erry Riyana Harja Pamekas said: "The company is taking advantage of the rupiah's depreciation by mining lower grade deposits and lowering its tin prices, which has resulted in higher sales revenues because of the higher dollar value against the rupiah. It has instigated a policy of hedging a proportion of its sales on the LME using futures and options. The sole aim of this hedging is to protect the company against any sudden downturn in tin prices."

Environmental issues surrounding the development of project locations are factors that must be constantly anticipated, which is reflected in the environmentally responsible PT Timah Tbk's corporate mission and its Timah's Vision 2000.

Its environment protection efforts have been internationally recognized by ISO 14001 certification by Aspects Certification Services of London for its Metallurgy Center at Mentok, Bangka island.

Erry said Timah's key to success has been high quality and professional human resources. Erry suggested that decision-making transference, creation of free-flow of information and offering incentives in order to attract investment are some factors that must be addressed in the mining sector.