Construction Engineering Business Plan

Indonesia EEC

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Company Summary

Indonesia EEC is a subsidiary company of United States Energy Engineering & Construction (U.S. EEC) that provides services including engineering, design, procurement, project management, construction and construction management, environmental consulting, management consulting, quality assurance and quality control, information management, operations and maintenance, and process technology development.

U.S. EEC's management wants Indonesia EEC to deliver a good financial performance. As a subsidiary company of U.S. EEC, Indonesia EEC sets the following objectives for the products and services lines of EPC power generation and power delivery projects:

  1. Expand customer awareness over the planning period.
  2. Reduce competition and risks while lowering price levels by establishing a joint venture with a reputable local company who also has experience in performing EPC power projects.
  3. Pursuing not only EPC prospects, but also BOO, BOT, BLT, B&R, and ECC prospects.
  4. Utilizing the joint venture company as the main entity of EEC to conduct business in Indonesia, and to provide all aspects of energy engineering services.

2.1 Company Ownership

Indonesia EEC was created as an Indonesian "Perseroan Terbatas" (PT.) corporation based in Jakarta, Indonesia, under the Foreign Investment Laws of Republic of Indonesia. The company is owned entirely by the Energy Engineering & Construction company of U.S (U.S. EEC).

2.2 Company History

EEC has been establishing its presence in the Indonesian market since the 1980s by opening and operating a representative office in Jakarta. It recognized the need for establishing a presence as a local company who meets the specific needs of its prospective customers, as well as its larger, long-term U.S. customers who invested in both Indonesia and the Southeast Asia Region.

Indonesia EEC was founded in 1996. Shares in the company are owned entirely by U.S. EEC.

Past Performance
1996 1997 1998
Sales $50,000,000 $65,000,000 $87,500,000
Gross Margin $23,000,000 $29,900,000 $40,250,000
Gross Margin % 46.00% 46.00% 46.00%
Operating Expenses $4,800,000 $4,850,000 $4,645,000
Collection Period (days) 72 63 63
Balance Sheet
1996 1997 1998
Current Assets
Cash $15,000,000 $19,500,000 $26,250,000
Accounts Receivable $6,112,981 $7,946,875 $10,697,716
Other Current Assets $525,931 $683,710 $920,380
Total Current Assets $21,638,912 $28,130,585 $37,868,096
Long-term Assets
Long-term Assets $710,837 $924,089 $1,243,965
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $710,837 $924,089 $1,243,965
Total Assets $22,349,749 $29,054,674 $39,112,061
Current Liabilities
Accounts Payable $2,478,188 $3,221,644 $4,336,828
Current Borrowing $0 $0 $0
Other Current Liabilities (interest free) $0 $0 $0
Total Current Liabilities $2,478,188 $3,221,644 $4,336,828
Long-term Liabilities $0 $0 $0
Total Liabilities $2,478,188 $3,221,644 $4,336,828
Paid-in Capital $1,996,500 $3,295,460 $4,743,900
Retained Earnings $116,967 $952,048 $1,781,333
Earnings $17,758,094 $21,585,522 $28,250,000
Total Capital $19,871,561 $25,833,030 $34,775,233
Total Capital and Liabilities $22,349,749 $29,054,674 $39,112,061
Other Inputs
Payment Days 30 30 30
Sales on Credit $31,098,365 $40,427,875 $54,422,140
Receivables Turnover 5.09 5.09 5.09

2.3 Company Locations and Facilities

The office is located in downton Jakarta, Indonesia. This location provides convenience, being near the airport, but also allows the company room to grow. Currently, Indonesia EEC occupies an 800-square meter space, with offices for each department.

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Past Performance
1996 1997 1998
Sales $50,000,000 $65,000,000 $87,500,000
Gross Margin $23,000,000 $29,900,000 $40,250,000
Gross Margin % 46.00% 46.00% 46.00%
Operating Expenses $4,800,000 $4,850,000 $4,645,000
Collection Period (days) 72 63 63
Balance Sheet
1996 1997 1998
Current Assets
Cash $15,000,000 $19,500,000 $26,250,000
Accounts Receivable $6,112,981 $7,946,875 $10,697,716
Other Current Assets $525,931 $683,710 $920,380
Total Current Assets $21,638,912 $28,130,585 $37,868,096
Long-term Assets
Long-term Assets $710,837 $924,089 $1,243,965
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $710,837 $924,089 $1,243,965
Total Assets $22,349,749 $29,054,674 $39,112,061
Current Liabilities
Accounts Payable $2,478,188 $3,221,644 $4,336,828
Current Borrowing $0 $0 $0
Other Current Liabilities (interest free) $0 $0 $0
Total Current Liabilities $2,478,188 $3,221,644 $4,336,828
Long-term Liabilities $0 $0 $0
Total Liabilities $2,478,188 $3,221,644 $4,336,828
Paid-in Capital $1,996,500 $3,295,460 $4,743,900
Retained Earnings $116,967 $952,048 $1,781,333
Earnings $17,758,094 $21,585,522 $28,250,000
Total Capital $19,871,561 $25,833,030 $34,775,233
Total Capital and Liabilities $22,349,749 $29,054,674 $39,112,061
Other Inputs
Payment Days 30 30 30
Sales on Credit $31,098,365 $40,427,875 $54,422,140
Receivables Turnover 5.09 5.09 5.09