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Local Content Development

Vision:

  • World class company having world class local partners
  • Leader in developing local industries and business communities

Mission:

  • Develop national capacity
  • Achieve/exceed committed local content target
  • Synergize BUMN companies (including financial institutions)
  • Implement APDN-based supplier & commodity strategy

 LCD 1

Three (3) basic elements in developing national capacity and local content participation in the company supply chain activities are: Synergy among Pertamina business units; Commodity strategy with a focus on the Appreciation to Domestic Products guidelines; and Supplier & local business development.

Synergy among Pertamina business units

Pertamina as state-owned company has some major roles to becoming a world-class adopting best-in-class practices, maximizing its revenue but also accommodating the optimum synergy on mutual basis relationship with other state-owned companies.

  • To maximize revenue and profit for higher contribution to the state budget;
  • To establish fair-play, accommodative and ethical business environment;
  • To improve performance of procurement;
  • Decree of Minister of State-owned Enterprises (BUMN) No. Kep-117/M-MBU/2002 on Good Corporate Governance business practices of BUMN as a process and structure to enhance business success and accountability to maximize shareholders’ value in the long-term and other stakeholders’ interest (article 1);
  • Regulation of Minister of BUMN No. PER-05/MBU/2008: users of goods and services shall prioritize the synergy among BUMN and/or SBU so long as the goods and services are produced by BUMN and/or SBU and the quality, price and the purpose are justifiable (article 2.4). 

LCD 2

 

Identification of Strategic Commodities with Local Content Opportunities: Appreciation to Domestic Products

Optimization of domestic goods, services, technology and engineering shall be done
if they are available locally and meet the required quality, delivery time and price in accordance to the goods & services procurement guidelines.


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As a reference in operational goods importation and in goods & services procurement, Ditjen Migas published APDN Book, which consists of:

List of Mandatory Items (Daftar Barang Diwajibkan)

Meet quality requirement (supported with product certificate and management system certificate) and having TKDN + BMP ≥ 40% and TKDN of materials ≥ 25%.

List of Maximized Items (Daftar Barang Dimaksimalkan)

Meet quality requirement (supported with product certificate and management system certificate) and having TKDN + BMP < 40% and TKDN of materials ≥ 25%.

List of Empowered Items (Daftar Barang Diberdayakan)

Meet quality requirement (supported with product certificate and management system certificate) and having TKDN of materials < 25%.

 

Identification of Strategic Commodities with Local Content Opportunities: Local Content Prioritization in the Services Procurement

Prioritize the participation of Domestic Companies and/or National Companies:

If the capability of a Local Company is not sufficient, a Consortium among Local Companies or with National Companies is suggested.

Local Companies or Consortium may cooperate with Foreign Companies (in a consortium or sub-contracting) where technology transfer shall be stated:

  • The Local Companies or the Consortium of Local and National Companies shall handle 30% of the total value of the works at minimum.
  • Minimum 50% of the physical works value shall take place in Indonesia.

For procurement value of up to US$100,000.00 or Rp.1 Billion, price evaluation to be done with no price preference. For the higher value (except for EPC/EPCI), bidders shall be committed to achieve 35% local content at minimum or percentage specified by SKK Migas.

Identification of Value Chain Activities within and Collaboration Opportunities with Stakeholders to Enhance Local Participation

LCD 3

 

LCD 4

 

 

 

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