Friday, June 29, 2012

UNTR – INFORMATION UPDATE JUNE 2012

UNTR – INFORMATION UPDATE JUNE 2012

Following previous information related to increasing competition particularly in the small heavy equipment type, herewith is a few updates on the latest condition of heavy equipment market in Indonesia.

As of May 2012 Indonesia heavy equipment market grew 20%, from 6,904 units to 8,327 units (based on internal market research). The increase was driven mainly by plantation and construction sectors which increased by 50% respectively, followed by 13% increase in forestry and 6% in mining.

Increasing demand in non-mining sectors (construction, plantation and forestry) and huge influx of small equipment due to excess supply and demand slowdown in China (which was down 40% y-o-y) creates intensifying competitive landscape particularly in the small-medium heavy equipment market.

The tough competition was reflected on Komatsu’s general market share which has decreased from 52% YTD May 2011 to 45% YTD May 2012. The main reason behind this lowered market share was the declining Komatsu market share of small-medium type (80% of sales volume) from 51% YTD May 2011 to 43% YTD May 2012, while market share of Komatsu big machine remains stable at 55%.

Meanwhile, heavy equipment demand from mining sector has shown signs of slowing down in growth. The slowdown was the result of implementation of mineral (non-coal) export taxes, which caused the demand in nickel sector to drop (average Komatsu sales volume to nickel sector was around 40-50 units per month). In addition, downward trend of coal price also starts to have negative impact to the small miners.

Based on this recent development, UT will revise its target of Komatsu sales volume this year to 8,500 units from the initial target of 9,500 units. However, the Company expects to maintain the traditional Komatsu market share at 44%-45%.

June 2012
Investor Relations Team
PT United Tractors Tbk