Mining brands in Indonesia yielded much harvest in their brand values[1] as demand for energy and oil increased due to fallout from the Ukraine conflict. All mining brands posted brand value increases of at least 5%, with all but one either seeing improvements to or maintaining their rank positions, according to Brand Finance’s Indonesia 100 2023 report which ranks the nation’s 100 most valuable and strongest brands.
Higher coal prices drove financial performances, and consequently brand value increases, of several mining brands such as Bayan Resources (brand value up 34% to US$178.76 million), which jumped eight places to 44th position, Adaro Energy (brand value up 32% to US$177.07 million), which gained six positions to reach 45th position, Indika Energy (brand value up 10% to US$101.65 million), which maintained its ranking at 64th place, Indo Tambangraya Megah (ITM) (brand value up 7% to US$73.83 million) which saw its ranking decrease by one position to 73rd and Bukit Asam (brand value up 10% to US$71.08 million) which posted a two-place rank improvement to 76th position. Meanwhile, United Tractors (brand value up 5% to US$93.48 million) retained 67th position through growth attributed to stronger revenue, in turn supported by higher contracting revenues and sales of construction machinery.
BRI inched a place forward to claim the title of Indonesia’s most valuable brand this year. The banking brand saw its brand value increase by 15% to US$4.3 billion while retaining a brand strength rating of AAA. The increase in brand value was mainly attributed to an improvement in financial performance. BRI had reported a net profit of Rp39.31 trillion (US$2.5 billion) in the third quarter of 2022, representing a significant year-on-year growth of 106.14%.
BRI remains dedicated in its pledge to sustainability with the close alignment of its business practices with environmental, social and governance (ESG) principles. The brand implemented financing policies for various sub sectors, encouraging customers to adopt sustainability-based business processes. By December 2022, the brand had pumped Rp78.8 trillion (US$5.26 billion) into the green sector. To minimise carbon footprint, BRI also opened its own Public Electric Vehicle Charging Station (SPKLU) and provided electric vehicles for its offices throughout the nation.
BCA retained its title of being Indonesia’s strongest brand[2] with an outstanding brand strength rating of AAA+, although its brand value dipped by 3% to US$2.9 billion. However, this decline in brand value was mainly due to the depreciation of the Indonesian Rupiah against the US Dollar. The banking brand had made enormous gains in 2022, achieving a total loan growth of 11.7% year-on-year, driven by recovery in all of its loan segments.
On the ESG front, BCA ramped up its sustainability efforts with increasing participation in sustainable financing and management of waste from business operations. By December 2022, the brand saw credit disbursements to sustainable sectors increase by 14.9% year-on-year to reach Rp183.2 trillion (US$12.3 billion), contributing 25.4% to BCA’s total financing portfolio. The brand has also introduced a waste management programme to significantly reduce its carbon footprint where it has processed 518 tonnes of waste in total, potentially minimising 348.9 tonnes of CO2 emissions. The programme also helped generate funds to finance scholarships for the underprivileged local community.
Indah Kiat Pulp & Paper is the fastest growing brand in Indonesia in our rankings as its brand value surged by 48% to US$367 million, propelling it 11 places to 23rd place. The engineering & construction brand garnered a brand strength rating of AA, decreasing slightly from AA+ last year. Its brand performance was driven by impressive financial performance, with a consolidated net profit increase of 62.9% to US$857.5 million in 2022. This increase was due to higher selling price of the brand’s products, which include cultural paper and pulp products, industrial paper and tissue.
The brand is resolute in its commitment to sustainability with the implementation of energy efficiency programmes in its production processes. Overall, it aims to reduce greenhouse gas emissions through energy efficiency processes in both paper production processes and power plant operations. In the past three years, it has reduced energy usage by 2.9% for electricity and 3% for steam. The brand has also actively incorporated ESG principles into its business practices. As such, Indah Kiat Pulp & Paper was presented with the Indonesia Green and Sustainable Companies Award (IGSCA) 2023 in the Natural Resource-based Industry category to recognise its sustainability efforts.
Alex Haigh, Managing Director – Asia Pacific of Brand Finance, commented:
“Fuelled by the nation's energy and oil demand, mining brands have shown outstanding growth in Brand Finance’s Top 100 Indonesian brands rankings this year. This growth in brand value parallels optimistic financial performance as the economy resumes post-pandemic activity. We also see strong performance for brands from other sectors in our report, such as BRI and Indah Kiat Pulp & Paper, which have been committed to improving their sustainable efforts while growing their brand value.”
[1] Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. The full ranking, additional insights, charts, more information about the methodology and definitions of key terms are available in the Brand Finance Indonesia 100 2023 report.
[2] Brand Finance determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity and business performance. Compliant with ISO 20671, Brand Finance’s assessment of stakeholder equity incorporates original market research data from over 150,000 respondents in 38 countries and across 31 sectors.