Two decades of active investments in Indonesia and counting.
1997 was a year of economic and political uncertainties in Indonesia. It was also the year of the birth of Saratoga Group. At a time where investors shied away from the turmoil, the co-founders of Saratoga group saw a need to support their country during the difficult time and an opportunity to take the risk to invest in the economy. Based on the conviction, Saratoga group was established in 1997 as an active investment company focused on Indonesia.
During the early years, the group was actively involved in the commodity and infrastructure sectors. The group invested in Adaro group (ADRO) in 2001 with the rationale that the nation would need energy to fuel the economy, and coal was the most accessible energy source. The group worked closely with the company with the goal to shape it into a pit-to-port integrated coal company. In 2008, Adaro’s Initial Public Offering (IPO) became the largest IPO in the Indonesian market. Today, Adaro continues to be the largest coal mining company by market capitalization.
Following the success of Adaro, Saratoga continued to look at other sectors that had growth potential. In 2004, together with Provident Capital, it was offered an opportunity to invest in a small independent tower company that owned a total of seven towers across Indonesia. Saratoga managed to grow the company substantially over time and renamed the company to Tower Bersama Infrastructure Group (TBIG). Today, TBIG has more than 13,000 telecommunication sites serving more than 22,000 tenants and is the leading tower company in Indonesia by market capitalization.
In recent years, Saratoga saw a growing trend in Indonesia’s consumer sector. In 2010, it invested in Mitra Pinasthika Mustika (MPMX), a diversified automotive company with leading market shares in motorcycle retail and distribution, lubricant oil, and motorcycle financing. Post-acquisition, Saratoga guided MPM to strategically restructure their various business pillars. Today MPM is one of the leading smart mobility companies and is ranked as one of the best 50 Indonesian companies by Forbes Indonesia.
In June 2013, Saratoga tapped into the domestic capital market, successfully listed itself on the IDX, and became the first of its kind to be listed in the country. Going forward, the group will continue to focus on its strengths and capabilities to explore investment opportunities, create values, and grow its investment portfolio across the three key pillars of Indonesian economy: Natural Resources, Infrastructure, and Consumer. Saratoga Investama Sedaya SRTG
Adaro
PT Adaro Energy Tbk. (ticker code: ADRO) is an Indonesian mining and energy group that focuses on integrated pit-to- power operations through subsidiaries. Its principal location is at Tabalong district in South Kalimantan, where its subsidiary PT Adaro Indonesia operates the largest single- concession coal mine in the southern hemisphere. PT Adaro Indonesia operates under a first-generation CCA (coal co- operation agreement) with the Indonesian Government valid for 30 years after the start of coal production.
From the South Kalimantan mine’s three pits, Adaro Energy produce one of the world’s cleanest coals, under the trademark Envirocoal. It is a sub-bituminous, moderate calorific value coal producing ultra-low sulphur, ash and NOx emissions. Adaro Energy’s coals are primarily sold to power generating providers, and sales an average of about 20-25% of coal to customers in Indonesia and 75% to overseas customers, predominantly in Asia.
Adaro Energy controls or has options on 12.8 billion tonnes of coal resources reported according to JORC. Of these resources, 1.1 billion tons of coal are proven reservesreporting according to JORC. Saratoga Investama Sedaya SRTG
Tower Bersama Group
From its original portfolio of seven sites in 2004, PT Tower Bersama Infrastructure Tbk. (ticker code: TBIG) has grown into one of the leading independent tower operators in Indonesia. As of 31 December 2014, TBIG has had 11,820 sites with 19,076 tenancies. TBIG’s principal business is the leasing of premises to telecommunication operators to set up antennae and other equipment for wireless signal trans- mission; such leasing of premises is under long-term lease agreements (usually 10 years or more).
As founding shareholders in TBIG, Saratoga and its partner, Provident Capital, have created a robust business model headed by an experienced management team. TBIG’s management team has deep and intimate knowledge of the Indonesian tower industry and has strong relationships with regulators, local governments and telecommunication operators.
TBIG constructs new sites only after obtaining a commitment for a long-term lease for premises from a telecommunications operator. TBIG’s largest customers include Indonesia’s highly rated telecommunication operators such as Telkom, Telkomsel, Indosat and XL, all of which account for 82.6% of the company’s frevenue in 2014. This Telecommunication Infrastructure provides the company with a highly visible recurring revenue stream.
Telecommunication operators in Indonesia continue to make investments in 3G coverage and capacity to meet the growing demand for data communication driven by increasing 3G-subscriber base and rising smartphone penetration. TBIG is well positioned to provide its customers with the site infrastructure they require in order to grow their businesses. Industry experts forecast that the outsourcing of construction of sites and the current trend of leasing premises from independent tower companies will continue as telecommunication operators seek to control their capital expenditure on passive infrastructure and on non-core activities, and at the same time strive to focus management attention on their core telecom business. Saratoga Investama Sedaya SRTG
Nusa Raya Cipta
PT Nusa Raya Cipta Tbk. (ticker code: NRCA) is a leading construction company publicly listed on the Indonesia Stock Exchange. It has been in operations for more than 40 years, serving the construction needs of clients in both the public and private sectors and has contributed to the development of Indonesia. The construction company has specialties in the construction of high-rise hotels and apartments as well as in the construction of infrastructures and large-scale projects including toll roads. Saratoga Investama Sedaya SRTG
Provident Agro
Roughly half of the company’s palm trees are still in their early stage of growth and are yet to enter their most productive years. Palm trees bear fruits starting from on average their fifth or sixth year. However, these early fruits still yield low amounts of oil – referred to in the industry as the oil extraction rate or OER. As trees mature over time, the fruits will grow bigger and consequently yield higher OER. On average, palm trees are at their most productive stage between the 8th and 17th year.
Provident Agro enjoys a relatively young plant age profile, in which the average age of the company’s palm trees is around seven years as of year-end 2014. This provides the company with tremendous growth opportunities within the next decade as the trees mature to peak production age. Saratoga Investama Sedaya SRTG
Interra
gas production, field development and exploration. The company is positioning to become a leading regional independent oil and gas producer.
Since its inception, Interra has grown both organically by developing existing assets and through disciplined acquisitions by seeking attractive targets across Southeast Asia. Its portfolio of production, development and exploration assets comprises five contract areas in Indonesia and Myanmar.
The company holds 60% stakes in the two largest onshore producing oil fields in Myanmar, in addition to 100% stakes in two producing oil fields and a substantial stake in an exploration block in Indonesia.
Total shareable production from its oil platforms reached a total of 787,906 barrels of oil in 2014 compared to 649,473 barrels of oil in 2013.
Interra Resources has gained a strong foothold in the Indonesian oil and gas industry, with assets located in South Sumatera, West Papua and Central Kalimantan, while the two major oil fields in central Myanmar gives the company a significant opportunity to tap into the growing energy markets of an economically vibrant region of Southeast Asia. Saratoga Investama Sedaya SRTG
MGM Bosco
MGM Bosco is a premium cold chain company serving the food and beverage industry. The company provides refrigerated trucking service serving FMCG blue-chip clients in over 20 cities and operates cold storage facilities in North Jakarta. MGM Bosco aims to scale up its business to deliver end-to-end cold chain logistics benefits for its clients. Saratoga Investama Sedaya SRTG
Primaya Hospital
Primaya Hospital is a leading hospital operator group which has an extensive experience in healthcare industry and currently operates 9 hospitals in various cities across Indonesia including Jakarta, Bekasi, Tangerang, Pekanbaru, Batam, and Makasar.Primaya Hospital prioritizes on providing high quality healthcare and follows international standards. As part of its commitment, Primaya Hospital receives JCI accreditation in its 4 hospitals, the highest number of JCI accreditations received in a hospital group in Indonesia.Primaya Hospital is the largest hospital operator for BPJS, which aligns with Saratoga’s commitment to support the government programs in improving healthcare services and infrastructure in Indonesia. Saratoga Investama Sedaya SRTG
Deltomed
Deltomed is one of the leading herbal remedy players in Indonesia. Deltomed’s product, Antangin, is the second largest herbal wind flu remedy brand by market share, while OB Herbal is the market leader for herbal cough medicine in Indonesia. Deltomed is uniquely positioned as one of the few producers with vertically integrated operations and strong distribution network. Saratoga Investama Sedaya SRTG
The First Industrial Gases Company in Indonesia
Aneka Gas Industri was established in 1916 where its main businesses are to supply industrial gases namely air gases (oxygen, nitrogen, argon), synthetic gases, fuel gases, rare gases, sterilization gases, refrigerant gases and electronic gases. AGI also supplies mixed, specialty and medical gases along with complimentary equipment and installation offerings. AGI products have a myriad of applications and serve multiple industries including medical, mettalurgy, energy, infrastructure and others. Saratoga Investama Sedaya SRTG
Corporate Governance
We have launched the Corporate Governance Code (CGC) as well as the Code of Conduct (CoC) on 25 June 2014 and furthermore have introduced both codes to our investee companies during the Saratoga’s 3rd Annual CXO Network gathering on 23 August 2014.
The effective application of the principles of transparency, accountability, responsibility, independency and fairness that are the foundation of Good Corporate Governance (GCG), enhances our corporate governance practices. We have convinced our investee companies to apply the Company’s CGC and CoC across all of their business activities.
The CGC and CoC were the follow-ups of a corporate governance assessment that was conducted by International Finance Corporation in 2013. As a listed company in Indonesia and in response to the intention of the Company and its founders to be recognized in the market as a leader in the implementation of GCG in Indonesia, Saratoga continuously enhances its corporate governance practices. Saratoga Investama Sedaya SRTG