REDEFINING BUSINESS AND CORPORATE STRATEGY OF PT INDONESIA CHEMICAL ALUMINA IN CHEMICAL GRADE ALUMINA BUSINESS

• Main Author: Dharma Putra, Rio
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/53320
• Institution: Institut Teknologi Bandung

Alumina industry is categorized as a pioneer industry in Indonesia, only exists in the last five years. The existence of alumina industry in Indonesia is inseparable from the abundant bauxite reserves in Indonesia as well as domestic minerals downstream policy (added value increase) as mandated by Law Number 4 of 2009 on Mineral and Coal Mining. There are two categories of alumina industry namely Smelter Grade Alumina (SGA) dominating the world alumina industry up to 96% and the other one is Chemical Grade Alumina (CGA). PT Indonesia Chemical Alumina (ICA) is the pioneer of alumina industry in Indonesia and the only CGA industry in Indonesia, starting its commercial operation in the beginning of 2015. As a new entry in CGA business, ICA faced dynamic and very tight competition, ICA Sales performance is still below the target, while from the aspect of production cost it is not competitive yet, all of these contribute to the sales margin that is still far below the target. This study aims to analyze what conditions causing ICA uncompetitive, then evaluate the business model suitable with ICA’s current condition as well as formulate the company's growth strategy that is expected to be able to bring the company to sustainable competitive advantage. This research was conducted using qualitative research design. Semi-structured interviews were conducted with five stakeholders from both internal ICA namely President Director and Finance Director, and from external ICA namely Vice President Corporate Strategic PT ANTAM Tbk, General Manager of West Kalimantan Bauxite Mining Business Unit PT ANTAM Tbk and Development Director of Mineral and Coal Program Directorate General of Mineral and Coal Mining KESDM. Research paper and data from official Institutions complemented the interview result. This research was adopting Analysis, Formulation, and Implementation (AFI) as the conceptual framework. The analysis shows that Indonesia has a good alumina industry prospect for SGA and CGA and ICA needs to build and develop several resources and capabilities toward sustainable competitive advantage. Based on the result, this research formulated business-level and corporate-level strategy for ICA's growth toward sustainable competitive advantage. This research concluded strategy implementation into two programs namely a program toward low-cost CGA production (cost-leadership strategy) and sales and marketing empowerment program, where its implementation time is planned within next five years.