Indonesia as an archipelagic country has problems in terms of logistics and supply chain where according to a study by Frost & Sullivan, Indonesia has the most expensive logistics costs in Asia, which is 24%. Therefore, AKR is committed to continuing to develop both in terms of infrastructure and business as shown, one of which is the development of the Java Integrated Industrial & Port Estate Gresik.
AKR has been around since 1960 to provide logistics & supply chain of basic chemicals and since 2005 has been trusted to distribute non-subsidized fuel and continued with subsidized fuel since 2011. AKR continues to grow to provide retail fuel, supply aircraft fuel and industrial estates.
AKR imports petroleum products from global refineries based on customer requirements and supplies petroleum to industrial and retail segments from its network of storage terminals, sea, river and land transport. AKR also provides fuel management services to its customers adding value to them. AKR through AKR retail petrol stations supplies High Speed Diesel and Petrol to cater for the needs of its retail customers including motorists and fishermen. It currently operates 131 petrol stations located across the major islands of Java, Sumatra, Bali, Kalimantan and Sulawesi.
AKR Corporindo is supplying petroleum and basic chemical products supported by its extensive infrastructure facilities including tank terminals and barging facilities to industrial and retail customers in most of the major cities across the country. Today, our market segments are industries such as mining,plantation & other industries, including multinational companies, state-owned enterprises, commercial enterprises and small businesses. AKR’s subsidiaries provide third party logistics services to customers in Indonesia by delivering products and services.
AKR has extensive infrastructure for logistics and supply chain from ships, tanks, warehouses, SPOB (Self propelled Oil Barge), to trucks of various sizes spread across 17 distribution points in Indonesia which are able to reach as far as Eastern Indonesia. AKR also has a sizable land bank at each of its distribution points, which allows AKR to continue to develop its logistics and supply chain infrastructure network and also continue to develop IT technology to reach customers better and deliver customer needs more efficiently.
The company manages its risk associated with volatile petroleum prices and exchange rates by maintaining an adequate spread over its base oil price as well as by hedging its FX exposure
As a major logistics & supply chain network provider, AKR is well aware that the problem of high logistics costs in Indonesia will be reduced if there is an integration of industrial estates with ports. This integration is very helpful in terms of logistics convenience and costs. With extensive knowledge & experience from AKR, which has also operated ports in China, AKR brings the concept of integration of Port Areas and industry supported by one-stop licensing to reduce logistical burdens both in terms of cost and time.
Therefore, AKR with Pelindo III formed a Joint Venture where PT BKMS was formed as the manager of the industrial estate with a 60% share composition of AKR and Pelindo III 40% and PT BMS as the manager of the port area with a composition of 40% AKR and Pelindo III 60%. there is a residential area managed by PT AKRland 100%
The JIIPE industrial area is an industrial area that is integrated with a deep sea port up to a draft of 16 LWS, allowing ships weighing >100,000 tons to dock. This will greatly facilitate tenants to process and distribute their products through JIIPE. JIIPE also connected to other transportation network in East Java such as Highway network & Train Network and because JIIPE located in gresik which only 3 hours from Surabaya,also has easy access to Airport.
In addition, JIIPE has obtained the status of SEZ (Special Economic Zone) through Government Regulation (PP) No. 71 of 2021 dated June 28, 2021 which was signed by the President of the Republic of Indonesia, Joko Widodo in the category of Technology & Manufacturing and entitled to fiscal incentives such as tax holidays, VAT exemptions, import duties to non-fiscal such as ease of employment, immigration, and building use rights for a period of time. longer time. In addition, the existence of an administrator's office will greatly assist in the ease of doing business with 1-door licensing and also the ease of direct investment in construction.
The Gresik SEZ which is located at the front end of the Madura Strait is a very strategic location with a deep sea port which is also supported by a land transportation infrastructure network such as the Trans Java and air toll network with Juanda Airport in Surabaya. has a business license up to 515 MW. The Zero Run Off Water concept also makes JIIPE have other facilities such as large capacity water treatment and waste water treatment besides connectivity facilities such as high speed internet.
SEZ JIIPE Gresik was also developed to have a residential area developed by PT AKRLand, an unaffiliated sister company that developed the Grand Estate Marina City (GEM City) which is a city with a master plan project covering an area of 800 hectares. with complete facilities, ranging from golf courses, educational facilities, to a marina.
With a total project of 1761 Ha and a land bank of >1000 Ha, JIIPE has the potential to increase the contribution of up to 30% of AKR's Gross Profit in the future which is obtained not only from land sales but also from utility fees.
AKR has a policy of maintaining at least 30% in terms of dividend payout ratio and over the last couple of years the company has consistently paid a dividend in excess of 30% to its shareholders.
AKR's management is fully committed to implementing good ESG in every aspect. In the environmental aspect, AKR's management demonstrates with a roadmap for the development of environmentally friendly fuels & cleaner energy as shown in the initiation of fuels with RON> 91, supported solar power plants at JIIPE, zero run off water concept and development of energy-based products. natural gas.
And the Social Aspect where AKR upholds the SHE factor (safety, Health, Environment) and prioritizes the safety and health of employees and the community as shown during the pandemic through vaccination programs and weekly rapid antigen test checks. Also providing scholarships to outstanding sons and daughters of the nation and also fight for equal opportunity as evidenced by 3 out of 7 board of directors are women.
In the aspect of Good governance, management shows such as the initiation of a whistle blower system that goes directly to the AKR President Director's email and responds responsively and gets awards from various parties. AKRA shares in ESG indexes such as SRI-KEHATI index, ESG star listed Company, ESGL index sustainalitics, and ESG LQ 45.