ANALYSIS OF COMPETITIVENESS OF THE AGRIBUSINESS SECTOR COMPANIES USING PORTER'S FIVE FORCES
M. Hudori
Lecturer
at Citra Widya Edukasi Polytechnic of Palm Oil
Abstract
PT. Astra Agro Lestari
Tbk. is a leading issuer that today, where the business is very interesting
market, but unfortunately the business strength is weak. This was followed by a
decline in profit of 1,8%. However, profits from the company is still the highest
compared to the three main competitors.
From the analysis of
competitiveness by using Porter's Five Forces shows that there are 11 listed
competitors, 15 state-owned and private companies and foreign national.
Opportunities for new competitors to enter the plantation business will be
easier if they have a large capital, and permit large areas and sufficient
labor. Commodity prices are influenced by commodity markets products at home
and abroad so that the bargaining power of suppliers and customers is very low.
The subtitute products of main products (palm oil) quite a lot, but the main
product has the great potential to beat the substitute products.
Keyword: Porter’s Five
Forces, Agribusiness Sector, Industrial Competitiveness
I. Introduction
I.1. Background
Agribusiness sector contribution in
national economy was only
13.70% of the Gross Domestic Product (GDP) in 2011. It was still very small when compared to
workers in the field of agribusiness sector by 42 million of a total population
of 215 million.[1]
Whereas in 2012
accounted for 14.40%, up 5.10%. It is therefore natural that the government put
agriculture as one of the excellent in promoting national development. The
participation and contribution of the agricultural community both domestically
and abroad given the space and ample opportunity to push the pace of national
development. Conditions and the development of community participation in the
development of the agricultural sector through investments in the period since
the post-economic crisis, to date, has shown a good performance and is likely
to increase, especially for capital investment through the Domestic Investment
(DCI) and the Foreign Investment (FDI). Realized investment (BKPM 2013) in this
sector over the last five years (2008-2012), the cumulative reach Rp 32.06
trillion (12% of total national domestic investment). As for the foreign
investment reached USD 3.58 billion (4.17% of total national foreign investment).[2]
According to the
Indonesian Chamber of Commerce (Kadin), the growth of agribusiness exports in
2012 compared to 2011 grew by 10%. Of this sector, the largest contribution is
obtained from the palm oil products.[3]
Based on data
collected from the IDX recorded 12 companies engaged in the
plantation sector and 8 of the other sub-sectors, as shown
in Table 1.
Table 1.
Agribusiness Sector Issuers List [4]
Sub Sektor Perkebunan
|
||
No.
|
Code
|
Name of Issuer
|
1
|
AALI
|
PT. Astra
Agro Lestari, Tbk.
|
2
|
BWPT
|
PT. BW
Plantation, Tbk.
|
3
|
GZCO
|
PT. Gozco
Plantation, Tbk.
|
4
|
JAWA
|
PT. Jaya
Agra Wattie, Tbk.
|
5
|
LSIP
|
PT. PP London Sumatra Indonesia, Tbk.
|
6
|
MAGP
|
PT. Multi
Agro Gemilang Plantation, Tbk.
|
7
|
PALM
|
PT.
Provident Agro, Tbk.
|
8
|
SGRO
|
PT.
Sampoerna Agro, Tbk.
|
9
|
SIMP
|
PT. Salim Ivomas Pratama, Tbk.
|
10
|
SMAR
|
PT. Sinar
Mas Agro Resources & Technology, Tbk.
|
11
|
TBLA
|
PT. Tunas
Baru Lampung, Tbk.
|
12
|
UNSP
|
PT. Bakrie
Sumatera Plantation, Tbk.
|
Sub Sektor Peternakan
|
||
1
|
CPDW
|
PT.
Cipendawa, Tbk.
|
2
|
MBAI
|
PT. Multibreeder Adirama Ind., Tbk.
|
Sub Sektor Perikanan
|
||
1
|
CPRO
|
PT. Central
Proteinaprima, Tbk.
|
2
|
DSFI
|
PT.
Danasupra Erapasific, Tbk.
|
3
|
IIKP
|
PT. Inti
Kapuas Arowana, Tbk.
|
Sub Sektor Lainnya
|
||
1
|
BISI
|
PT. Bisi
International, Tbk.
|
2
|
BTEK
|
PT. Bumi Teknokultural Unggul, Tbk.
|
3
|
CKRA
|
PT. Citra
Kebun Raya Agri, Tbk.
|
Source: http://sahamok.com/pasar-modal/emiten/sektor-pertanian
Based on the results of the mapping, there are 4 companies with a
total percentage of 66.25% of planting area, namely PT. Salim Ivomas Pratama
Tbk. (SIMP), PT. Astra Agro Lestari Tbk. (AALI), PT. London Sumatra Indonesia
Tbk. (LSIP) and PT. Sinar Mas Agro Resources & Technology Tbk. (SMAR).
Based on a comparative analysis of the BCG Matrix method is seen that PT. Astra
Agro Lestari Tbk. is a leading issuer that today, where the business is very
interesting market, but unfortunately the business strength is weak. This was
followed by a decline in earnings by 1.80%.[5]
I.2. Formulation of Problem
From the foregoing, it
is seen that the PT. Astra Agro Lestari Tbk. need to examine how their
competitiveness. Therefore, in this paper will discuss how the model of competitiveness
PT. Astra Agro Lestari Tbk. when analyzed with Porter's Five Forces?
I.3. Aim of Discuss
The purpose of this
paper is:
1.
Provides
an overview of the company's competitiveness plantation sub-sector.
2.
Looking
at the future prospects of the company.
Competitiveness
analysis is done by considering the extent of the problem as follows:
1.
Only
on PT. Astra Agro Lestari Tbk.
2.
Analysis
based on the Company's Annual Report 2012 and other sources from the internet
site.
3.
Competitiveness
analysis using Porter's Five Forces.
II. Company Profile
PT. Astra Agro Lestari Tbk. is a leading oil palm plantation
company in Indonesia which has been established since 32 years ago. Commitment
to always produce palm oil (CPO) of high quality to meet the needs of the
market both at home and abroad. The company has listed its shares on the
Jakarta Stock Exchange (JSX) and the Surabaya Stock Exchange (SSX) which has now been integrated into the
Indonesian Stock Exchange (IDX),
since December 1997.
Shareholding by public
investors currently at 20.30%. AALI stock prices also continued to rise from
the current Rp 1,550 per share initial public offering (InitialPublicOffering /
IPO) in 1997. Currently Rp 19,700 per share at the close of trading on December
31st, 2012 at the Indonesian Stock Exchange (IDX).[6]
II.1. Operating Company Regions
The company's
operational area covers eight provinces, namely Naggroe Aceh Darussalam, Riau,
Jambi, Central Kalimantan, East Kalimantan, South Kalimantan, Central Sulawesi
and West Sulawesi with a total area of 272,994 hectares of planted area. Spread of
plantations in detail can be seen in Table 2.
Table 2. Areal Spread
Plantation PT. Astra Agro Lestari Tbk.
No.
|
Province
|
Plant Produce
(Ha)
|
Plant Before-produce
(Ha)
|
Total
Planted Area
(Ha)
|
1
|
Nanggroe Aceh Darussalam
|
7,928
|
3,754
|
11,682
|
2
|
Riau
|
56,876
|
5,025
|
61,901
|
3
|
Jambi
|
33,178
|
-
|
33,178
|
4
|
Kalimantan Tengah
|
51,755
|
1,252
|
53,007
|
5
|
Kalimantan Timur
|
37,004
|
7,099
|
44,103
|
6
|
Kalimantan Selatan
|
4,440
|
15,309
|
19,749
|
7
|
Sulawesi Barat
|
29,782
|
1,975
|
31,757
|
8
|
Sulawesi Tengah
|
13,467
|
4,150
|
17,617
|
Total
|
234,430
|
38,564
|
272,994
|
Source: Annual Report
PT. Astra Agro Lestari Tbk. 2012
II.2. Composition of Revenues
In 2012 PT. Astra Agro
Lestari Tbk. posted a net profit of Rp. 2.45 trillion, down by 1.80% compared
to the year 2011 amounting to Rp. 2.50 trillion. However, profits from the
company is still the highest compared to the three main competitors, namely PT.
Salim Ivomas Pratama Tbk. of Rp. 1.52 trillion, PT. PP London Sumatra Indonesia
Tbk. of Rp. 1.12 billion and PT. Sinar Mas Agro Resources & Technology Tbk.
of Rp. 2.18 trillion.
The company's revenue
in 2012 is supported from the sale of palm oil (CPO) of 90.20%, palm kernel
(PK) of 9.20% and 0.60% of other commodities. The revenue contribution of palm
oil rose by 2.15% from the previous year, ie 88.30%. While the contribution of revenue
from palm kernel (PK) down 18.58% from the previous year, ie 11.58%. Other
commodities increased contribution of 33.33% from the previous year, which is
0.40%.
In terms of marketing,
pendapapatan is still dominated by revenues from the domestic market, which is
97.10%, up by 1.78%. The rest of 2.90% of the export market that declined from
the previous year amounted to 63.04%.
The composition of
sales revenue is graphically shown in Figure 1.
Figure 1.
Composition of Revenue Sales PT. Astra Agro Lestari Tbk.[7]
II.3. Stock Price Performance During the Period 2011
– 2012
An investor who invested in the
company will receive a return on their shares. The higher the earnings per
share that the company will give you a pretty good returns. This will encourage
investors to invest greater so the company's stock price will rise.
Stock prices also reflect the
value of a company. If the company achieved a good performance, then the shares
of the company will be in great demand by investors. Achieved very good results
can be seen in the company financial statements published by the company
(issuer). Issuer is obliged to publish financial statements on a particular
period. This financial report is useful to investors to assist in making
investment decisions, such as selling, buying, or planting stock.
Most investors before investing,
they do exactly the first analysis of the issuer's financial information. In
conducting the analysis, investors often use information net income, as net
income as an indicator in view of the company's ability to pay dividends.[8]
Similarly,
PT. Astra Agro Lestari Tbk., Decrease in net income earned also affect the
price of its shares on the IDX.
Recorded
bring to closing 2011's first quarter, the company's stock price is valued at Rp.
22,700 per sheet. The prices fluctuate each quarter and closed at Rp. 19,700
per sheet at the end of 2012. Nevertheless, the share price is still much
higher than in the three main competitors who only stands at Rp. 1,400 – Rp.
6,500 per sheet.[9]
Stock
price performance of PT. Astra Agro Lestari Tbk. during the period 2011 – 2012
is graphically shown in Figure 2.
Figure 2. Stock Price Performance PT. Astra Agro Lestari Tbk. During the Period
2011 – 2012[10]
III. Review of Literature
III.1. Competitiveness
Competitiveness
is motivation in a person to be able to win a competition, to do better, try
better than anyone else in the vicinity. Someone who has a high
competitiveness, will always try to work better, withstand the various
conditions, obstacles and can adjust with the environment works.
According
Sumihardjo (2008) states that the term competitiveness with competitiveness or
competitive. While the term competitive advantage with competitive advantage.
Furthermore, the combined term competitiveness of the word "power" in
a meaningful sentence competitiveness strengths, and the word
"competitiveness" means more than the other, or different from the
others in terms of quality, or have certain advantages. That is, the
competitiveness can be significantly strength to strive to excel in certain
things that a person, group or institution.
In
general it can be said that competitiveness is an intrinsic part of the
self-motivated person to work better, faster and more accomplished of the group
members. High competitiveness is an effort one can optimally, to achieve better
and faster when compared with their peers in an organization or group.
Competitive
advantage is a specific activity that was developed by a person, institution,
organization or company that is superior compared to people, institutions and
other organizations or competitors. The word "superior", based on the
opinion Sumihardjo (2008), is the relative position of the organization to
another organization or person's position relative to others. A similar
sentiment was expressed Agus Rahayu (2008) which states, that advantage is the
relative position of an organization against other organizations, both to the
organization, some organizations or entire organization in an industry or a
person's relative position as the leader of the other leaders. On the market
perspective, the relative position generally associated with customer value
(customer value). While the organization's perspective, the relative position
generally associated with better organizational performance or higher.[11]
III.2. Porter’s Five Forces
According to
wikipedia, Porter’s Five Forces analysis is a framework for industry analysis
and business strategy development developed by Michael Porter of the Harvard
University School of Business in 1979.
He said there are five forces that determine the competitive
intensity in an industry, which is:
1.
Threat
of substitute products
2.
Threat
of competitors
3.
Threat
of new entrants
4.
Bargaining
power of suppliers
5.
Bergaining
power of customers[12]
The powers, visually
seen in Figure 3.
Figure 3.
Porter’s Five Forces
IV. Analysis and Discussion
IV.1. Existing Rivalry
Currently
plantation industry is experiencing its heyday. Quite a lot of investors who
invest in this sector. It is a challenge for PT. Astra Agro Lestari Tbk.
Currently there are 11 companies listed there are others that are listed on the
IDX which produces a kind of refined products as shown in Table 3.
Table 3. List of Plantation Companies Listed on the IDX [1]
No.
|
Code
|
Name of
Company
|
1
|
BWPT
|
PT. BW Plantation, Tbk.
|
2
|
GZCO
|
PT. Gozco Plantation, Tbk.
|
3
|
JAWA
|
PT. Jaya Agra Wattie, Tbk.
|
4
|
LSIP
|
PT. PP London
Sumatra Indonesia, Tbk.
|
5
|
MAGP
|
PT. Multi Agro Gemilang Plantation,
Tbk.
|
6
|
PALM
|
PT. Provident Agro, Tbk.
|
7
|
SGRO
|
PT. Sampoerna Agro, Tbk.
|
8
|
SIMP
|
PT.
Salim Ivomas Pratama, Tbk.
|
9
|
SMAR
|
PT.
Sinar Mas Agro Res. & Tech., Tbk.
|
10
|
TBLA
|
PT. Tunas Baru Lampung, Tbk.
|
11
|
UNSP
|
PT. Bakrie Sumatera Plantation,
Tbk.
|
Besides,
there are 16 state-owned companies (BUMN) in the plantation sector as shown in
Table 4.
Table 4. State-owned Plantation Company [14]
No.
|
Code
|
Name of
Company
|
1
|
PTPN I
|
PT. Perkebunan
Nusantara I
|
2
|
PTPN II
|
PT. Perkebunan
Nusantara II
|
3
|
PTPN III
|
PT. Perkebunan
Nusantara III
|
4
|
PTPN IV
|
PT. Perkebunan
Nusantara IV
|
5
|
PTPN V
|
PT. Perkebunan
Nusantara V
|
6
|
PTPN VI
|
PT. Perkebunan
Nusantara VI
|
7
|
PTPN VII
|
PT. Perkebunan
Nusantara VII
|
8
|
PTPN VIII
|
PT. Perkebunan
Nusantara VIII
|
9
|
PTPN IX
|
PT. Perkebunan
Nusantara IX
|
10
|
PTPN X
|
PT. Perkebunan
Nusantara X
|
11
|
PTPN XI
|
PT. Perkebunan
Nusantara XI
|
12
|
PTPN XII
|
PT. Perkebunan
Nusantara XII
|
13
|
PTPN XIII
|
PT. Perkebunan
Nusantara XIII
|
14
|
PTPN XIV
|
PT. Perkebunan
Nusantara XIV
|
15
|
RNI
|
PT. Rajawali
Nusantara Indonesia
|
Not
to forget also foreign companies enliven this business. There are at least 12
foreign companies from seven countries that invest in the plantation industry.
Foreign companies are shown in Table 5.
There
are also private companies are in the business of national estates and
scattered in several large islands such as Sumatra, Kalimantan, Sulawesi and
Papua.
Table 5. Foreign Investors in Plantation Industry [15]
No.
|
Country
|
Name of
Company
|
1
|
Malaysia
|
Guthrie Bhd.
|
2
|
Malaysia
|
Golden Hope
Bhd.
|
3
|
Malaysia
|
KL Kepong Bhd.
|
4
|
Malaysia
|
Sime Darby
Bhd.
|
5
|
Malaysia
|
Kulim Bhd.
|
6
|
Great Britain
|
Rea Holding
|
7
|
Great Britain
|
MP Evans Group
Plc.
|
8
|
Belgie
|
SA Sipef NV
|
9
|
Luxemburg
|
Socfinasia SA Plantation
|
10
|
Singapore
|
Wilmar Holding
|
11
|
USA
|
Hindoli-Cargill
Inc.
|
12
|
Srilangka
|
Carson Cumberbatch & Co. Ltd
|
IV.2. Threats of New Entrants
Companies who want to enter the plantation industry is required to issue a large investment
because of the scale of business in plantations are large and labor-intensive,
so that the palm oil sector provides a huge barrier to entry.
Several factors main barrier to
entry is:
1.
Availability of
vast land.
2.
Labor
requirements are pretty much.
3.
Production of palm oil plantations will be optimal and
efficient when done in the tropics. Therefore, not many areas that can develop
oil palm plantations with a very large scale such as in Indonesia and Malaysia.
4.
Another factor
which a barrier is related land clearing permits, environmental issues and
climate change.
IV.3. Bergaining Power of
Customers and Suppliers
As a commodity product, the palm
oil trade is regulated by the commodity market, both nationally and
internationally. Ministry of Commerce (Ministry) will change its policy
determination Levy (LB) on Crude Palm Oil (CPO). Export Fixing Price (EFP/HPE) portion will take a lot more than the futures commodities exchange in Jakarta which has been referred to the
Rotterdam and Kuala Lumpur.
Deputy Minister of Trade, Bayu Krisnamurthi
said that while the portion going to wear a larger local futures commodities exchange, the government will still use the reference
prices for Kuala Lumpur and Rotterdam CPO prices.
"We recently issued a new
policy on June 20th, 2013. Stipulation EFP (HPE) we change the oil. During the average price
there is no weighting. So starting July 1st, 2013 was 60% using the Jakarta Commodities Exchange Jakarta,
the Kuala Lumpur Commodities Exchange 20% and the Rotterdam Commodities Exchange 20%." Bayu said during the discussion with
the media at the Ministry of Commerce in Jakarta, Friday (06/07/2013).
Through the plan CPO reference
price to the local futures commodities exchange, futures trading volume expected in the CPO market in
the country continues to rise. So will automatically futures commodites exchange in the country could be considered important,
which would eventually shift the physical market Rotterdam. Indonesia is still
referring to the international CPO prices in the physical market Rotterdam
Netherlands.[16]
Therefore the power of buyers is not
enough to influence the market can affect prices. Similarly, suppliers are able
to act too real in influencing the market.
IV.4. Threat of Subtitute Product
Vegetable oils (vegetable oils) and animal oils (oils and fats)
are part of the biological oil (edible oil and fats). Vegetable oil in the
world market traded 13 types of vegetable oil, while the oil in the world
market animal marketed four types of oil. Biological grouping structure chart
of oil in the world market, according to sources such as the oil is presented
in Figure 4.
Figure 4. Grouping of Biological Oil in World Markets
From
these groupings, there are four main types of vegetable oil is palm oil,
soybean oil, rapeseed oil and sunflower seed oil. Share of the world trade
volume of approximately 81% with an upward trend ranges from 1% – 1.5%/year
(Oil World, 2011).
However,
from the aspects of production, palm oil has a competitive advantage in the
form of oil with the highest productivity is ± 3.5 tons/Ha.Year. The three
types of oil competitors who have oil productivity ranged from 0.4 to 0.6
tons/Ha.Year (Buana, 2004).[17]
Thus
seen that palm oil has a high competitiveness against other vegetable oils.
V. Conclusion
From
the discussion Porter's Five Forces on PT. Astra Agro Lestari Tbk. above, some
conclusions can be drawn as follows:
1. There are 11 competitors listed PT. Astra Agro Lestari
Tbk., 15 state-owned (BUMN) and private companies and foreign national.
2. Opportunities for new competitors to enter the plantation
business will be easier if they have a large capital, and permit large areas and
sufficient labor.
3. Commodity prices
are influenced by commodity markets products at home and abroad so that the
bargaining power of suppliers and customers is very low.
4. The subitute products of main products (palm oil) quite a
lot, but the main product has the great potential to beat the substitute
products.
References
[1] http://pphp.deptan.go.id/disp_informasi/1/1/0/160/kontribusi_sektor_pertanian_dalam_perekonomian.html
[2] http://www.setkab.go.id/artikel-8545-.html
[3] http://jaringnews.com/ekonomi/sektor-riil/32302/kadin-dorong-kontribusi-agribisnis-capai-target-pertumbuhan-ekonomi
[4] http://sahamok.com/pasar-modal/emiten/sektor-pertanian
[5] M. Hudori, Amar Sukirno, dkk, (2013), Pemetaan
Strategi Industri dan Daya Saing Pada Sektor Industri Agribisnis, Program
Magister Teknik Industri Universitas
Mercu Buana, Bekasi
[6] Annual
Report PT. Astra Agro Lestari Tbk. 2012
[7] Annual
Report PT. Astra Agro Lestari Tbk. 2012
[9] M. Hudori, Amar Sukirno, dkk, (2013),
Pemetaan Strategi Industri dan Daya Saing Pada Sektor Industri Agribisnis,
Program Magister Teknik Industri
Universitas Mercu Buana, Bekasi
[10]Annual
Report PT. Astra Agro Lestari Tbk. 2012
[11]http://digilib.unila.ac.id/246/9/Bab_II_Tesis.pdf
[12]http://id.wikipedia.org/wiki/Analisis_lima_kekuatan_Porter
[13]http://sahamok.com/pasar-modal/emiten/sektor-pertanian
[14]http://www.bumn.go.id/daftar-bumn
[15]http://www.rmol.co/read/2012/09/22/79005/Perkebunan-Sawit-Indonesia-Dikuasai-Tujuh-Negara-
[16]http://finance.detik.com/read/2013/06/07/143528/2267161/1036/harga-patokan-ekspor-sawit-akan-lebih-banyak-merujuk-ke-jakarta
[17] http://repository.ipb.ac.id/bitstream/handle/123456789/53253/BAB-II-Tinjauan-Umum-Minyak-Nabati-Dunia-dan-MInyak-Kelapa-Sawit-Indonesia.pdf
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