Heavy equipment distributor PT Kobexindo Tractors Tbk (KOBX) has allocated US$ 4 million Capital expenditure (Capex) in 2023 for operations and heavy equipment rejuvenation.
Established in 2002, the company focuses on heavy equipment sales and distributors including spare parts sales and heavy equipment service. Its products include the mining and mineral recovery, material handling and logistics solutions, environmental solutions and construction and agriculture. Currently, it has 3 subsidiaries:
- PT. Kobexindo Equipment and subsidiary (with ownership of 99%)
- PT. Kobexindo Forklift Indonesia (99%)
- PT. Kobexindo Persada Sejahtera (formerly PT. Kobexindo Foton Indonesia) (99%)
Prospect in mining industry
Kobexindo would use the 2023 Capex for operational reasons and rejuvenation of rental heavy equipment, President Director Andry B. Limawan said.
According to Limawan, the 2023 business prospect would be influenced by commodity prices and demand volatility. The commodity demand will face a downward trend, which could affect the sales of the company’s heavy equipment.
“However, the management hopes that the demand for heavy equipment products will remain stable and have a positive impact on the heavy equipment industry,” he told kontan.co.id, on February 13, 2023.
The company will continue to observe the market development and take the necessary steps to ensure the business continues to grow and receive the profits in the long run.
Limawan also said the company saw that the prospect of sales would continue to draw the mining sector. He added that the heavy machinery of the company has faced a demand from the infrastructure sector, logistics and manufacturing for handling equipment and warehousing. However, Kobexindo has also eyed diversification by strengthening and maintaining its heavy equipment portfolio.
As an insight on the company’s products:
- Infrastructure and construction: Dynapac & Doosan Portable Power
- Mining: Doosan, Terex and Mercedes-Benz
- Manufacture and logistics: Jungheinrich, RITE-HITE and Doosan
- Environmental solutions: HAKO & Makro
Risks in heavy equipment business
There are 3 significant problems in the heavy equipment industry, according to Amtiss (2020):
- Lack of human resources: Many projects required authorized operators who are experienced in using these heavy equipment. With different locations, it also affects the company’s to reach the area simultaneously. Experienced human resources are needed to directly fill the specified location.
- High customer expectations: The number of requests is influenced by very high expectations demanded by customers for heavy equipment rental companies. Companies must ensure to show good performance to customers.
- Lack of equipment utilization: A heavy equipment company must have various utilizations as well as heavy equipment variants.
