One of the reasons why captive power has become the most important sector in the Indonesian power market is that the customers need the most reliable and efficient power system to reduce the costs. The PLN subsidized electricity tariff is approximately 40% more expensive, and its disturbance rate is high and getting worse.
Furthermore, PLN's inability to pay power and natural gas at the prevailing exchange rate has put both PLN and independent power producer (IPP) developers into a very difficult position to move forward with their project implementation between 1999 and 2003. Meanwhile, in line with the government's export increasing program to strengthen the national reserve funds, many big electricity consumers will face their fast growing demand. This situation will compel many electricity consumers (especially large industrial facilities) to set up their own captive power plants.
As a result of this need, Indonesia EEC will focus its marketing directive on those large, export-oriented, industrial companies.
Indonesia EEC's overall competitive edge in Indonesia is that it brings its parent company's name recognition as a "one-stop" services provider encompassing engineering, procurement, construction, and trade financing services. The parent company is seen as having more than one hundred years' experience in the global industry.
One of the most important key factors in Indonesia EEC's competitive edge is its expertise in providing access to the trade financing, as follows:
The establishment of a joint venture company between Indonesia EEC and a strong, experienced local engineering and construction company is the most strategic step to overcome the competition by reduced production costs as well as to improve flexibility in penetrating the markets in developing countries, especially the Asia Region.
The captive power market in Indonesia will be focused and integrated with the private customers outside the multilateral/bilateral aid programs. To sell to this type of market, Indonesia EEC needs to have these seven important propositions:
We are planning to increase sales substantially in 2001. This is considered reasonable due to the opportunities available in the industry.
January through March 2001 will offer the highest sales, as many clients will begin the implementation of their projects.