Ido, a marketer in challenging times

The most noteworthy memory for Ido Hutarabat in his over 20 years of career in mining industry is when he managed to convince buyers to purchase low-rank coal, currently branded as eco-coal, at a time when the market greatly counted on the cheaper high calorific value coal.

It took about three years for Ido, a marketing superintendent of PT Arutmin Indonesia to lobby potential buyers to use the company’s 4,200 kcal/kg (GAR) coal in 2003, competing with the country’s main coal production having the calorific value of above 5,200 kcal/kg (GAR).

With his marketing’s never-give-up strategy, state-owned electricity company PT PLN -- the country’s main buyer of coal -- finally agreed to apply the low rank coal to their new power plant projects starting 2006.

“It is (really) a challenging time in my career. The problem (at that time) was I have to sell product (coal) which has no market yet. The low-rank coal was still ‘unmarketable’ product,” he recalled.

Thus, when PLN opened the first tender for supplying low-rank coal in 2006, Arutmin became a pioneer, securing a larger supply portion of low-rank coal to PLN’s planned 10,000-megawatt power plant projects.

Now, the low-rank coal has been the pride of Indonesian coal companies. The low CV coal has also been the most popular source of fuel used to generate electricity at power plant projects, not only at home, but also across Southeast Asia countries, where demand is also expected to boom.

“The market for eco-coal is now huge as new power plant projects, not only in Indonesia but also in ASEAN favor to use of low-rank coal,” he told CoalAsia in a recent interview at his office.

For Ido, who obtained a Bachelor Degree in Mining Engineering from Bandung Institute of Technology (ITB) in 1990, marketing job played important role to promote the company’s new brand, matching customer’s requirements.

Ido started marketing assignment when he joined IDX-listed tin mining company PT Timah Tbk in 1992. He was named as marketing executive of Indometal (London) Limited, a subsidiary company of PT Timah in London with responsibility to sell tin products in Europe.

“I have to deal with tin buyers in European countries. Accompanied by another one marketing staff, I was responsible to contribute up to 30 percent of PT Timah’s total sales in a year,” Ido, who was based in London until July 1996, said.

Attending frequently networking events and meeting clients, according to Ido had much polished his marketing and negotiation skills and cognizing more on what the buyers’ requirements are.

“I enjoy networking event. I enjoy meeting with clients,” Ido, who likes playing golf, said.

Aside from doing physical marketing of tin in London, Ido also has opportunity to run futures trading at the London Metal Exchange (LME), the world’s center for industrial metals trading with more than three-quarters of all non-ferrous metal futures business is transacted.

“Of course, I am not in the position to influence the market but (with the involvement in the futures trading), I know the trend of tin price, the players and the market mechanism,” he argued.

Before being promoted as marketing executive at PT Timah for Asia Pacific market, Ido did his Master of Science in Management (MSM) at the Arthur D Little School of Management, Cambridge in United States.

In 1998, the father of two children then was named as investor relations officer at PT Timah before joining a cement company, PT Cemex Indonesia as business planning manager in 2001.

Coal

With his over 10 years career in mineral commodity, Ido then decided to enter coal business with PT Arutmin, a subsidiary of one of the country’s biggest coal mining companies, IDX-listed PT Bumi Resources Tbk.

Starting as marketing superintendent in April 2003, his careers continued to rise with several promotions, namely as strategic marketing manager, marketing manager for domestic to general manager.

With such posts, Ido became familiar with both technical and non-technical of mining business activities from exploration to production, and to marketing of coal products.

In the period of May 2010 to December 2014 for example, the-50-year old Ido was promoted as a General Manager of Mineral Resources, Contract and Projects (MRCP) of Arutmin, under which his division managed all aspects of production from preparation pitshell, mine design, choosing mining contractors to building infrastructure both in mining and logistics.

The MRCP division consists of 3 departments of Mine Planning Department, Projects and Contracts.

“MRCP Division manages big responsibilities in the company from long term mine plan for the company, reserve and resource calculation, managing expansion projects and maintenance projects until all contracts from mining contracts, and non-mining contracts, from logistics contracts until small contracts,” he said.

“Thus, we can predict our mineable reserve based on the coal price,” he said.

In December 2014, Ido was appointed as Chief Executive Officer (CEO) of PT Arutmin and Vice President Marketing of PT Bumi Resources Tbk.

“My principle (in working) is just do what we can do. Never to be too ambitious,” he humbly said.

IMA

Aside from his huge tasks in Bumi Resources group, Ido is now challenged to recuperate the tarnished popularity of the Indonesian Mining Association (IMA) following the rise of a number of mining-related associations in the country which previously were part of IMA.

Ido was recently appointed as IMA Chairman, replacing former president director of gold and copper firm PT Newmont Nusa Tenggara, Martiono Hadianto.

The appointment of Ido came at a time when mining commodities including coal and minerals have been in downturn trend, forcing mining companies to take numerous cost-cutting initiatives in order to survive. Many of the small and medium mining companies reportedly have to stop operation due to the low mining commodity price.

Ido recognized it’s a tough tasks to regain the trust of mining companies in Indonesia that the association would stick to its main objective: to fight for the interest all mining companies.

 “The task is tough,” Ido commented on his recent appointment as a new IMA chairman.

Set up in 1975, IMA -- a non-political and non-profit organization -- is the first mining association in the country and the founding member for the ASEAN Federation of Mining Association (AFMA).

However, many of its members then set up new associations which many said because they were unsatisfied with IMA.

Among the associations are the Indonesian Coal Mining Association (ICMA), The Association of Indonesian Mineral Entrepreneurs (Apemindo),  Indonesian Nickel Association (INA),  Indonesia's Association of Bauxite and Iron ore Entrepreneurs (APB3I), Indonesian Smelter & Mineral Processing Association (ISPA) and Processing and Smelting Companies Association (AP3I).

“My first program is to revitalize IMA so that the association could represent the interest all mining companies in Indonesia. It is also my biggest dream as chairman of IMA,” he said.

Ido argued that it is also the right time for mining companies to unite in facing the dwindling mining commodities through among others sharing experiences on how to survive through cost efficiency initiatives.

“In the current hard condition, I see the biggest challenge now is how to survive. The challenge is no longer on how to compete with Indonesian miners but how to compete with other producing countries,” he said.

In coal, for example, Indonesia is now competing with coal producers from Australia, South Africa and Colombia to win the export destination markets of Asia, such as China, India and Japan.

“In the past years, only Indonesia and Australia compete in Asia market, producers from South Africa were focused on Europe, while Columbia prioritized the market in United States, but the current low transportation costs have changed the map. All producers could compete in Asia market,” he said.

In regard to the relationship with the government, Ido insisted that IMA would remain as partner with hope that the government could produce investor-friendly policies to ensure the sustainability of mining operation.

“Mining is not like a factory that could stop production at a time of price decline. Mines should keep on operating since halting operation would be far expensive than keeping operation. Thus, mining companies need certainty in regulations from the government,” he said. -- by By Adianto P. Simamora.

CoalAsia magazine runs Ido's profile on June edition (distributed by today June 27). Edo is one of the confirmed speakers on the 4th coal buyers and producers meeting on August 30-31 in Jakarta. Get the info at https://www.petromindo.com/?table=event&pos=detail&id=662