PERTAMINA PATRA NIAGA'S DOWNSTREAM PETROCHEMICAL BUSINESS DEVELOPMENT PROPOSAL THROUGH INORGANIC GROWTH SCENARIO

• Main Author: Ichwan, Muhammad
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/74031
• Institution: Institut Teknologi Bandung

PT Pertamina Patra Niaga, Sub Holding Commercial & Trading PT Pertamina (Persero) has plans to develop its business by entering the downstream petrochemical industry. In realizing this goal, PT Pertamina Patra Niaga is expanding its business through the acquisition strategy of PT XYZ. This company is a petrochemical company that meets the cooperation criteria sought by PT Pertamina Patra Niaga such as having good experience in the downstream petrochemical industry, raw materials supplied by PT Pertamina Patra Niaga and open to receiving investment from PT Pertamina Patra Niaga for business development. In this thesis, there are two expansion scenarios carried out by PT Pertamina Patra Niaga, namely in scenario 1 a common stock investment of 20% of the existing shares in PT XYZ and in scenario 2 a common stock investment of 20% plus preferred shares carried out in years 3 and 5. The feasibility assessment of this business expansion is measured by using PT Pertamina's hurdle rate of 11.76% for the Petrochemical business. Judging from the value of the Internal Rate of Return of the two investment scenarios, it shows that the two scenarios are included in the criteria that can be accepted by the company. However, when viewed from the NPV and payback period, the second scenario is more profitable than the first scenario. This scenario provides an NPV of IDR 1,145,498,289,483.01, an IRR of 23.52%, a Payback Period (PP) of 8 years. Based on the sensitivity analysis performed on the two scenarios, it appears that the COGS/Revenue variable is the variable that has the highest financial influence compared to the other variables. Meanwhile, in the second position is the income growth variable. This shows that production cost efficiency and sales value are directly proportional to the growth of the petrochemical business at PT XYZ. With cheaper raw material prices but high quality, it is expected that PT XYZ can further reduce COGS and increase revenue.