The Titan Group is preparing to take its infrastructure services business entity, PT Titan Infra Sejahtera (TIS), public on the Indonesia Stock Exchange (BEI). TIS plans to conduct an Initial Public Offering (IPO) in 2025.
TIS is an infrastructure service provider operating in South Sumatra Province. TIS has two subsidiaries, namely PT Servo Lintas Raya (SLR) and PT Swarnadwipa Dermaga Jaya (SDJ).
SLR operates 118 kilometers (km) of road for the transportation of commodity materials, also known as hauling. Meanwhile, SDJ operates a port on the Musi River for shipping the commodities that are transported.
President Director of SLR and SDJ, Victor B. Tanuadji, emphasized that the core business of TIS is in infrastructure. Victor is confident that TIS will be well-received by the market when it goes public and will remain attractive to investors who are concerned with environmental issues.
"This is purely infrastructure; there are no mining activities within TIS," Victor stressed in a written statement received by Kontan.co.id on Monday (December 16).
For information, TIS is part of Titan Infra Energy. As a group, Titan Infra Energy has three business lines: energy infrastructure, energy services, and energy resources.
In the energy infrastructure business line, Titan Infra Energy, through TIS, is involved in integrated logistics services via SLR and cargo port services through SDJ.
Director of Operations at Titan Infra Energy, Suryo Suwignjo, is optimistic about the growth prospects for TIS. As an example of its financial performance, last year TIS recorded an EBITDA of US$100 million. "This year, we are optimistic that this figure will increase," said Suryo.
Suryo explained that TIS's revenue is directly related to the volume of key commodities being transported, namely coal, which passes through the hauling road operated by SLR and is shipped via SDJ.
He gave an example that this year, the amount of coal transported and shipped by TIS reached 21 million tons, a 16% increase compared to 18 million tons in 2023. Next year, the volume is projected to rise to 27 million tons.
However, Suryo has not yet disclosed the exact number of shares that TIS will offer to the public in the upcoming IPO. "In accordance with exchange regulations, at a minimum, we will offer 10% of the shares," Suryo explained.
On the other hand, Victor revealed the prospects for TIS going forward. Starting this year, PT Bukit Asam Tbk (PTBA) has begun shipping its coal production through TIS's hauling route and coal port. Victor said this development brings a fresh wind for TIS.
Victor is confident that the amount of PTBA’s coal passing through TIS's roads will continue to increase year by year, especially with coal prices remaining relatively stable at around US$125 per ton.
TIS has also taken steps to anticipate potential bottlenecks in the transportation route due to the surge in transport and shipping volumes. This year, TIS has expanded its port facilities from two to three ports, with five conveyors.
Next year, TIS plans to add one more conveyor. Victor is optimistic about TIS's prospects in the future, in line with Sumatra's position as the second-largest coal producer in Indonesia.
South Sumatra (Sumsel), where TIS operates, is the largest contributor to coal production on the island of Sumatra. The coal reserves in Sumsel amount to 9.3 billion tons, or about 25% of Indonesia's total national coal reserves of 37.6 billion tons.
The concentration of coal mining in Sumsel is located in three regions: Muara Enim, Lahat, and Ogan Komering Ulu. In Muara Enim alone, there are at least 29 mining business licenses issued by the government.
This year, the South Sumatra Energy and Mineral Resources (ESDM) Office targets coal production to reach 131 million tons. This presents a growth opportunity for TIS.
Moreover, as coal reserves in Kalimantan begin to deplete and production costs rise, South Sumatra is expected to gain more attention. "This is the space that will shape the future for TIS," Victor concluded.
