FINANCING STRATEGY TO SUPPORT SIGNALING CONSTRUCTION PROJECT AT PT XYZ

• Main Author: Fawestrialni, Rurin
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/63266
• Institution: Institut Teknologi Bandung

The construction services market in Indonesia has great potential, where government and private sector investment is increasing every year. This is also related to the coverage area and the number of people (public) that will receive the service. Harnessing the potential of the construction services sector in Indonesia can be achieved by engaging domestic contractors in competition through a transparent, fair, efficient, and effective (economical) process. As well as through the application of legislation. In addition, it is necessary to increase the capacity (capacity building) of contractors, and the implementation of policies in favor of national entrepreneurs. The business continuity of construction services requires management with a clear business development orientation that considers market needs and the development of resources and technological advancements. In 2020, the Indonesian government has a budget of Rp 423.3 trillion for infrastructure development. This figure is up 5.9% compared to 2019 of Rp 399.7 trillion. This focus is carried out by the government to improve the competitiveness of investment and exports, support the transformation of industrialization and encourage creative financing schemes (APBN, 2020). Economic activity continues to decrease since the existence of the pandemic, resulting in Indonesia's economic growth in the first quarter of 2020 to fall to 2.97%. Construction, which contributed 10.7% of GDP, decreased to 2.9% in the first quarter of 2020 (Buletin Konstruksi, 2020). Until the middle of the year in 2021, the company's revenue from the project has not significantly increased. The payment of the project in 2020 that has been completed has still not been paid off, causing the company to have difficulty in cash flow. Project revenue cannot be the same as previous years, although the prospects have been explored for a long time because the government budget was diverted to deal with the covid-19 pandemic so that the opportunity was held back affected by relocation of programs and budgets in 2020 of the ministry of PUPR is used for handling Covid-19 and mitigating the impact of Covid-19 (Instruksi Presiden, No.4 2020) PT XYZ was established in 2011 by formidable competency in mechanical, electrical, electronics, and instrumentation fields. PT XYZ constantly grows to strengthen competency as a company with the products/services in mechanical, electrical, electronics and instrumentation fields by pursuing technology development continually. Consequently, the general business of PT XYZ is construction activities that include several of the competencies mentioned above. The impact of Covid-19 is payments for other projects were unclear, and the company ran out of working capital but had to generate income to keep the company continues. PT XYZ is requested to supply goods for the construction project with a value of Rp. 8.777.456.242. This job is relatively short, i.e., 3-6 months with a payment term of 100% paid at the end for 60-90 days after the work is completed; therefore, the problem, however, is strategy financing to complete the project in a short time with limited working capital. The current condition is little working capital because there is no facility loan from the bank, and it is running out of money. Therefore, to complete a project with limited working capital needs financing with the implementation of a disciplined project, with key tasks that must be considered ranging from contract release, receipt of down payment, process manufacturing goods, release PO to Vendor, delivery time, and many more. Order grouping is more efficient because it is based on the delivery date of the goods, the manufacturing process, and the material orders from the supplier. In terms of financial, with strict cash flow must pay attention to account receivables and capital issues to financing strategies. Choosing the best alternative to financing and completing the project is factoring; financial factoring allows work to be completed. Profit of the project is obtained after this financing by 27,33%.