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.