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Interview

with Wantya Sapardan, President Director, Indoturbine

11.02.2008 / Energyboardroom

Indoturbine was created 35 years ago in response to a boom in the Indonesian oil and gas industry. In recent years, there has also been a surge in global oil and gas markets – how has this affected Indoturbine’s activities?

The oil and gas industry is very cyclical, and Indoturbine is proactive in terms of anticipating market changes. Indonesia’s growth tends to be delayed by a year or two compared to the rest of the world, which means that although momentum in global oil and gas sectors started in 2003, Indoturbine began seeing substantial growth from 2005 onward. The upside of this delayed reaction is that by starting late, Indonesia also finishes late, and therefore while global markets may be currently poised for a downturn, Indoturbine foresees strong growth through 2009.

Indoturbine has delivered upwards of 400 gas turbine packages to a variety of companies. Looking at these recent years of growth, which contracts do you highlight as Indoturbine’s greatest successes?

Indoturbine has many projects in Indonesia, and supports major PSCs who require the highest reliability standards. These have included players such as Total E&P Indonesie, Hess, as well as Kangean Energy Indonesia. Additionally, Indoturbine has a long history with Pertamina, which has always been a very important relationship. Pertamina is entering a new era, and it is Indoturbine’s job to help Ari Soemarno make sure oil and gas is continuously flowing during its time of transition.

By carrying Caterpillar’s Solar Turbines brand, Indoturbine must have a close relationship with Caterpillar as well. What is the nature of this relationship, and what are the mutual expectations between a large multinational and its local representative?

Solar Turbines is a wholly-owned subsidiary of Caterpillar, and Indoturbine is the exclusive distributor of Solar Turbines in Indonesia. This relationship extends back to Indoturbine’s inception, and through the years we have worked together to develop our brands domestically. In terms of mutual expectations, contracts are an obvious requirement. Beyond that, we are continuously developing the scope of Solar Turbines in Indonesia, through after-sales service and maintenance support, and investments in inventories and repair facilities. Since 1987, Indoturbine has the capability to perform turbine overhaul and compressor repair and re-staging services in Bandung, in cooperation with PT NTP (formerly IPTN/UMC.) This is an example of our relationship providing an extra advantage to our clients: on-site, high-quality local service offers easier access to equipment, reduced turn-around time, and ultimately cost savings.

What is the biggest source of Indoturbine’s competitive pressures?

In the Oil & Gas sector, Indoturbine and Solar Turbines face the traditional competitors such as Siemens, GE, and Rolls Royce. In addition to Solar Turbines, Indoturbine also represents Skoda Power’s steam turbine system for the power generation sector. In this case, Indoturbine faces rivalry from China, which at this point in time we can not compete with on the basis of price. Indoturbine has been in business since 1973, which gives us the edge over our competitors in terms of local support. We can offer a complete package, from understanding client needs at the outset, through to installation, testing, and after sales support with operations and maintenance. In achieving our vision to be recognized as a valued partner in the energy and industrial development projects throughout Indonesia, Indoturbine strives to become a solution provider that delivers the best product alongside a full range of maintenance and repair operations.

Indoturbine has specialized in gas turbines since its inception. Over the last 35 years, most technologies – whether aircraft, automobiles, or computers – have changed enormously. What technical changes have most impacted Indoturbine’s products?

Solar Turbines as our principal is committed to advancement in the gas turbine’s technology. The most notable advancement is in the materials’ technology which ultimately increases efficiency. Computerization has also become very common in the gas turbine engine package. With computerization, more variable can be controlled, which means a lot more parameters in the gas turbine engine can be controlled, thus ultimately improves efficiency.

With Indoturbine’s advantage in local expertise, in such a specialized area as gas turbines, is it difficult to attract and retain engineering talent?

Recruitment and retention are always difficult issues. If companies in countries like Qatar, for instance, want to pay Indonesian engineers higher salaries, there is no way Indoturbine can match their offer. However, there are factors other than salary when engineers choose where to build their career. Indonesians are loyal to their families, their culture, and country, and moving to Qatar may not always be the most attractive option when all elements are taken into consideration.

In terms of retaining engineers, we have 17 specialists in-field who can carry-on small EPCM projects for installation of compressors. These Indonesian engineers provide the local content mandated by the government, so that while the technology may not be sourced locally, the knowledge that goes into the after-sales support and engineering services is 100% Indonesian.

What are your ambitions for Indoturbine in Indonesia, and how do you see the company in five or 10 years?

Indonesia lacks energy infrastructure, so in addition to continued diversification of our activities toward different services is our goal of becoming a true Energy Solution Provider. Clients do not want to buy a gas turbine compressor or a gas turbine generator per se; they need to move oil or gas from one point to another point, or they need electricity, and Indoturbine can provide it.

In terms of developing Indoturbine in the next five to 10 years, the government and our clients agree with our message, local expertise, and local content, and that we have an excellent understanding of the Indonesian business environment and culture. With a stable base of our products in the market, Indoturbine can continue to focus on after-sales support and service to smooth out the business cycle and realize constantly increasing revenues.

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