A.

Suppliers
1. Potential suppliers, locations, and production capacity
Attached excel file (PKS potential)

2. Estimated buying price (FOB at mill) of each suppliers

Reference buying price from Rp. 225,-/kg - Rp. 325,-/kg,

depend on stock, quality,road condition and distance to
stockpile.

B. Stockpile
1. Potential location for stockpile area.

In Kalimantan Barat (near to Pontianak ) the best area around

Batu layang to Wajok Hilir.

2. Estimated investment cost and time required for construction

of a concrete floor and covering structure with at least 10,000
tons storing capacity.

I dont have the detail construction data, but for reference the
size of building (roof or covering structure) for minimum
needed to stack PKS on the concrete floor at least 3m high
(average 2 ton /m2), so we need covering area min. 5,000 m2
and height of the structure min. 6 m.

Any reference cost of 5,000 m2 concrete floor construction (no

covering structure)?
Warehouse (steel construction, covering structure with concrete floor)

Reference size : 2 set @ 72 m x 36 m with height 6 m,

Covering area around 5,184 m2, estimate cost Rp.1,750,000,-/m2

Total cost = Rp.1,750,000,- /m2 X 5,184 m2 =Rp. 9,072,000,000,-

 Warehouse ( concrete floor only, without covering)

Reference : 5,000 m2 , thickness = 12 cm with m5 steel/ wire mesh

With concrete ready mix K=275.

Estimate total cost Rp. 1,100,000,000,-

3. Existing available warehouse can rent/buy to store the PKS and

how much does it cost (If any)
Close type with roof top , concrete flooring and wall ( general store type and mostly
use for fertilizer), price around Rp. 25,000,-/m2/month. Normal capacity 1,000 to
1,500 ton (refer to fertilizer SG 1.0 -1,2, loaded to 3m high (at least 3 ton /m2), using
steer loader to load and unload (can not use excavator, because the roof structure too
low).

For PKS, the SG around 0,65 ton/m3, using steer loader at this warehouse can load to
average 2 m high (around 1.3 ton/m2) , for cap. 10,000 ton need roof area around
minimum 7,000 m2 (rental cost at least Rp.175,000,000,-/month, exclude Heavy equipment ,
labor,etc).

4. Estimated operating and maintenance cost for stockpile

Operating cost : rent wheel loader / excavator, labor,

electricity, etc.

Rental cost refer to 2015 operation in PT. MAR for :

Wheel Loader Rental Cost Rp.65,000,000,-/month (exclude
Diesel fuel and Labor cost)
Excavator PC 200 series rental cost Rp. 120,000,000,-/month
(200 hours, all in cost).

Please provide estimated electricity, fuel, labor cost per month

 Electricity :
Power needed just for warehouse lighting, small office and
security guard house , installed 5,5 KVA must be enough,
estimate cost Rp.5,000,000,-/month.

For fully operation need 2 unit wheel loader with diesel fuel
consumption @10liter /hour/unit, 12-15 hours/day, 25-30
days/month.
1 unit mobile crane (for transhipment from barge to vessel)
with diesel fuel @20 liter/hour/day, 16 20 hours/day, 10
days/month.
(diesel fuel price Juli 2016 for industry Rp.8,424/liter and
subsidiary diesel fuel Rp.5,150,-/liter)

Estimate labor cost ( excel file attached).

C. Export Location
1. List of potential export location and potential port for PKS
export.

The highest product of PKS in Sumatera and Kalimantan, if our

export target to Thailand, korea and Japan than the best
location (nearest area to export target) around Pontianak and
Kepulauan Riau

2. Port charge/fee, Loading charge/fee.

Wait for this information

(Bu Nova, please help to add more detail if any).

3. Loading equipment and estimated loading time per shipment

 To Load from stockpile to barge and from barge to Vessel need
to rent barge, Mobile Crane and Wheel Loader / Excavator and
dump truck for load / unload activity.

I got info for handling 10,000 ton of PKS need time at least 10
days (transhipment area not in the Pontianak port, but at the
sea in muara Jungkat to Muara Mempawah).

D. Logistic
1. In-land transportation cost, time, loading capacity from
potential mill to stockpile and from stockpile to port.

Reference Transport Cost per Trip (check the cost to distance)

If using truck directly from mill to stock pile,
Truck cap. 7 ton max, from/to Pontianak (Batu Layang / Wajok Hulu) :

Sintang (320 360 km) : Rp. 2,850,000,- Rp.3,200,000,-

Sekadau (250 280 km) : Rp. 1,950,000,- Rp.2,100,000,-

Toba (200 230 km) : Rp. 2,000,000,- Rp.2,250,000,-

Tayan (120-130 km) : Rp. 1,260,000,-

Refer to the data the cost average to distance Rp.10,000,- / km/ trip, if we rent the
truck for PKS transport is very expensive.

2. Barge size, cost, time (if any)

Truck combine with river transportation from mill to stockpile

area with barge cap. : 200 ton - 1,000 ton (new regulation,
under Kapuas Bridge no.1 and no.2 ).

Rental cost for barge cap.1,000 ton around Rp.5,000,000,-/day.

 Barge cap. 2,000 ton 3,000 ton (new regulation, not under
Kapuas bridge, use other way to the sea) with rental cost
Rp.7,000,000,- to Rp.10,000,000,- per day.

Additional Info for combine item D.1 and D.2 :

1. The total transport cost is very high, it is not feasible to rent a truck just
for this purpose, better we buy from the PKS Seller (Collector) because :
The seller also transporter, so they can safe transport cost for PKS
because they have contract to carry other material (consumer good, PK,
cement, steel and etc), after unload the material they can go back with
PKS.

In your opinion, what are the value adds we can provide to PKS export if the
buyer can buy directly from PKS seller (Collector)?

Actually no other value adds from us if the buyer can buy directly from the
PKS seller (collector), I just think about the target of PKS FOB price (US$ 75 /
MT), if we have too many cost to spend is very hard to keep our FOB price still
under US$ 75 (or we can not get profit).

If we can maximized to use barge for transportation from PKS seller to

stockpile then we will save more cost (minimized using the Truck or Dump
truck)

2. We just buy PKS from mill near to Pontianak or with the total cost (PKS
Price + Transport cost + other cost) still feasible.

3. Estimated Rental cost of :

ware house min. Rp.175,000,000,-/month,
wheel loader @ Rp. 70,000,000,-/month,
excavator @ Rp.100,000,000,-/month,
dump truck /truck cost depend on the distance and trip/day
Mobile crane for transshipment
 4. The current condition many Cream Rubber Factory not running smooth
(running slowly), so they just need small quantity of PKS as boiler fuel,
when we start buy PKS and or the Cream Rubber Factory start running
normal is possible the price will rise, because many PKS buyers will
buy directly to the Palm oil mill

5. If Possible do not use vessel because need very high extra cost to handle
(need mobile crane, transshipment, more time, more labor cost),
suggestion : use barge type with size 275 to 300 ft (no need
transshipment, no need mobile crane, faster and saver).

6. If possible no need warehouse for stockpile, just put in the open area just
like Palm Oil mill did before (cost saver in ware house, easy to handling,
more efficiency in stacking with excavator).

7. The newer plantation, they use palm seed with nut size very small
(Tenera type) that mean the PKS will be small and thin, so may be not
effective if we use grading machine to sort the PKS, because we will got
very low quantity in big size PKS.

The grading machine is required by the buyer, in this case, please

provide the specific mills that still be able to provide big size PKS.

I marked with the yellow at the mill list (please check the excel file) for older
plantation, the PKS size bigger than the newer.

If we use grading machine to get the bigger size, can we still export the smaller
size (with lower price) ?

E. Other costs
1. Surveyor cost

SUCOFINDO Surveyor (reference only):

Draft sonding Rp.150,- /ton with min. Rp. 10,000,000,- /
package.
Transport, consumption, etc Rp.5,000,000,- (negotiate).
 We can use other Surveyor for cheaper cost.

2. Lab test cost

SUCOFINDO Lab test :

Lab analysis Rp. 2,000,000,- / sample
Total 10 days for the lab analysis (calorific value)
For 10,000 ton package estimate need 3 sample (minimum).
+ 10% Tax.

Also need SUCOFINDO for Verification for Export for all palm
product (CPO, PK, etc) in Indonesia.

F. Regulation
1. Licenses associated with PKS storing, exporting, and warehouse
construction.

Need license for warehouse construction (IMB)

If we plan to build warehouse in Batu Layang Wajok, we
apply the IMB license in Kabupaten Mempawah (before known
as Kabupaten Pontianak).
Refer to the new regulation estimate time needed to aply IMB
license in Kabupaten Mempawah around 1 2 weeks.
(Bu Nova, please add more detail if any)

Need export license for PKS

Refer to information from friend, estimate time needed around
1 month, apply license in Pontianak city using local company
names .

(Bu Nova, please add more detail if any).

For storing PKS (normally no need license, just need
warehouse/ rent warehouse).
Time required and where to apply each license.
 2. Is it necessary to use local entity (PNDA) for PKS exporter or it
can be PMA? (bu Nova, please help for this info)

G. Tax .
Tax/duty associated with PKS trading. Storing and exporting activities
e.g. export tax, CIT etc.

Refered to Peraturan Menteri Keuangan no. 30 tahun 2016 tentang

perubahan atas peraturan menteri keuangan no. 133 tahun 2015
tentang Badan Layanan Umum Badan Pengelola Dana Perkebunan
Kelapa Sawit (BPDPKS) pada kementrian keuangan .

PKS Export Tax :

19 Pebruari 2016 28 Pebruari 2017 US$ 3/ton
1 Maret 2017 - 28 Pebruari 2018 US$ 5/ton
1 Maret 2018 US$ 10/ton

Please explain whether the number provided are the tax per ton of
PKS or other meaning.

Yes, the number provided are tax in US$/ ton.