Astra Otoparts Anticipates Increase in Electricity Price

TEMPO.CO, Jakarta - Automotive components company Astra Otoparts, aims to improve its efficiency to anticipate a surge in production costs due to an increase in electricity price starting on May 1.

The increase was stipulated in a regulation issued by the energy and mineral resources ministry on April 1. Accordingly, the electricity fee for public companies in the I-3 category consuming more than 200 kilovolt-ampere, will be gradually increased by up to 39.9 percent.

Astra Otoparts Director Robby Sani, said that the internal efficiency option was chosen by the company instead of increasing their prices because that would need the customers’ consent.

"As an example, we will reduce the number of rejects or economize on the use of raw materials," he said on Wednesday, April 23, 2014.

According to Robby, the plan to increase the electricity price will not significantly impact the company because the biggest threat for the components industry is the supply of raw materials, such as aluminum, steel, plastic and rubber.

Robby explained that the biggest burden the company must bear was the cost of raw materials, which made up 70 percent of total costs. He said that there were several ways that could be done to anticipate the increase in electricity fee, one of which converting the fuel to gas.

Last year, because of the depreciating rupiah and an increase in minimum wage, the company's profit went down by 6.8 percent to Rp 1.05 trillion, in 2012 the profit was Rp 1.13 trillion. However, its net income increased by 29.3 percent to Rp 10.7 trillion in 2013.

FAIZ NASHRILLAH