Transkon Jaya, Successful in Car Rental Business, Expands into ISP


21 Jan 2021


Dilansir Oleh


by Sri Niken Handayani – January 21, 2021August 27, 2020, marked a significant milestone for PT Transkon Jaya Tbk., a company from Balikpapan, East Kalimantan, established in 2002. Amid the pandemic, Transkon went public on the Indonesia Stock Exchange through an initial public offering (IPO). “We successfully raised IDR 93.75 billion. The funds were used to acquire new fleet units and strengthen spare parts or logistics,” said Lexi Roland Rompas, President Director of Transkon.

Initially, Transkon operated as a supplier of spare parts and accessories for special vehicles in mining concession areas. Lexi explained that the initial capital for establishing the company was IDR 1 billion, with IDR 250 million being paid-up capital. The initial capital was used for spare part procurement and vehicle purchases. “At the beginning, we only had six rental vehicles and one operational vehicle,” he said.

However, as the business developed, in 2006, Transkon started renting out 4×4 operational vehicles (light vehicles/LV) under the Transkon Rent brand, targeting customers from mining companies in Kalimantan. Additionally, recognizing the potential for expansion, in 2011, Transkon diversified its business by becoming an Internet Service Provider (ISP) in the Kalimantan region. Currently, Transkon’s business includes providing LV rental services, internet services, and selling vehicle spare parts and accessories.

For the rented vehicles, Transkon now operates around 2,100 vehicles, reaching remote areas, and its distribution covers the entire Indonesia. Besides Kalimantan, Transkon’s customers are also present in Sumatra, Java, Sulawesi, Maluku, and Papua.

The challenge Lexi faced when starting the business was convincing players in the mining industry to use their services. Mining companies were accustomed to using foreign products, but they were costly. “From the beginning, we had connections with several mining companies. We penetrated them and explained the benefits of using our products or services,” he said.

The differentiation that his company carries, according to Lexi, firstly lies in specializing in 4×4 fleet (double cabin) vehicles. Secondly, their market share is in the mining sector. “This differentiation is also supported by the company’s advantages, namely the provision of quality service for rented vehicles, repair facilities at each customer’s mining location, the ability to reach remote areas, and the company’s reliable financial capabilities,” he claimed.

Therefore, Lexi mentioned that despite the variety of vehicles and rental prices being lower than competitors, Transkon has a superior position because it offers added value to customers. This added value includes modifying vehicles to meet the specific needs of their business activities.

Lexi said that the growth momentum for Transkon occurred in 2015-2016. During that time, there was a commodity crisis in the coal mining industry, which affected the demand for vehicle rental services. Consequently, some vehicle rental companies withdrew from the mining industry, and Transkon received many requests from the customers of these companies.

As the business volume continued to increase, Lexi explained that the organizational structuring of Transkon has been gradually carried out since 2017. He mentioned that internal data and operational management are arranged as systematically as possible, following the applicable laws referring to the company’s projections as a public corporation. “In the process, the company applies the principles of Good Corporate Governance for management to maximize the company’s value, improve performance and contributions, and maintain the company’s sustainability in the long run,” Lexi explained.

In the period from 2017 to 2019, the average annual growth of Transkon’s business was 31.5%. The highest growth occurred in 2018, reaching 40% compared to the previous year. The increase in 2018, according to Lexi, was due to the higher demand from customers, both old and new, with an average annual rental price increase of 5.5%, supported by a 37% increase in internet service provider revenue. “Currently, our monthly revenue is around IDR 34 billion,” he said. Meanwhile, the number of employees is currently 530 people.

Lexi emphasized that Transkon’s success is due to two factors. First, its human resources have high competence. Second, innovation by entering new industries. “So, finding the right people for the right industry, then innovating by adjusting products to future needs, is the key to Transkon’s success,” he said.

Now, Transkon is adding new points on the map of Indonesia, expanding its reach even further. It aims not only to be in coal but also to enter the gold and nickel mining industries. “We also want to enter new industries being developed by the government, such as the 35 thousand-megawatt electricity project, renewable energy, and there is the new capital city planned in East Kalimantan. We see the business potential in these areas,” Lexi revealed. (*) Sri Niken Handayani

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