UT enjoys strong sales amid robust mining sector

Rendi A. Witular, Jakarta

Publicly listed heavy equipment supplier PT United Tractor (UT) said consolidated sales revenue rose by around 21 percent in the first semester of this year, primarily due to higher demand for heavy equipment from mining firms.

UT corporate secretary Tjandrawati Waas said the company recorded sales of around Rp 4 trillion (US$444 million) in the first semester, ending in June, up from Rp 3.3 trillion in the same period last year.

"Demand from natural resources-based firms for heavy equipment is soaring as they are expanding output amid rising prices for almost all commodities. This has encouraged them to buy more vehicles and other heavy plant to boost their output," said Tjandrawati before a seminar at the Jakarta Stock Exchange on Thursday.

He said that sales of Komatsu brand heavy equipment rose by around 62 percent to 650 units in the first half of this year from around 400 units in the same period last year.

According to Tjandrawati, the company had to revise upward for the second time its sales target for Komatsu equipment this year to 1,450 units, from initial targets of 930 and 1,125 units, due to the unexpectedly high demand.

Last year, the company sold 916 items of plant.

"Most of it was supplied to mining companies ... We expect next year sales will be even higher as the country's political and economic situation are expected to improve after the general election," said Tjandrawati.

A UT subsidiary, PT Pamapersada Nusantara, won a $1 billion contract from coal producer PT Kaltim Prima Coal in April to mine coal in East Kalimantan for more than 10 years. Pamapersada will buy mining equipment from UT.

Pamapersada currently holds similar exploration contracts with PT Adaro Indonesia -- the country's largest coal producer -- state-owned PT Tambang Batubara Bukit Asam, PT Indominco Mandiri, PT Multi Harapan Utama and PT Kideco Jaya Agung.

The company produced 27.7 million tons of coal under contract last year.

UT is 54 percent-controlled by the country's largest automotive assembler and distributor, PT Astra International.

Shares in the company rose by Rp 50 to Rp 1,225 on the Jakarta Stock Exchange on Thursday.