PT Multi Nitrotama Kimia (MNK), one of the largest producers of Ammonium Nitrate in Indonesia. PT. MNK supplies Ammonium Nitrate (an essential ingredient for explosive materials) and provide explosive services to various mining companies.

The demand in the AN is supplied from the two sources, one is from their own manufacturing plant and another is from the direct import. The product cost per tonne from its own manufacturing facility is lower than product cost per tonnes of direct import. One of the sector in Indonesia that grow rapidly an one of the user for MNK product is coal mining sector, with production of marketable coal 300 million ton in 2010, it is expected to grow to 500 million ton in 2016.

This report analyses through the different supply and demand history data and provides some insight about the future demand. Manufacturing product is more sensible choice to pursue however the capacity of existing plant (37,000 ton) cannot meet the total demand, so direct import become the main portion (even though the construction of new plant is almost completed, total new plant production capacity is 90,000 ton so the total production capacity is around 127,000 ton per annum. using the time series forecasting method, we concuded that the Forecasted volume is around 180,000 - 188,600 ton per annum, the remaining volume should still be served by importing AN directly from overseas. We also discussed briefly about the supply chain management for the same. Also discusses about the seasonality of order, inventory turnover and cash conversion cycle, warehouse location, lead time, and out of stock and raw material sourcing.

We also take the consideration of global market trend and macro, micro economical consideration for this mining industry since it plays a major role in the decision making process.

We conclude here in our report that PT. MNK should consider expanding their production facility in order to address the growing local demands mean while continue to import to address the sales orders. However, opening a new plant, close to distributor point could not feasible since the raw material for the AN plant is by-product from Urea manufacturing plant.


Supervisor : Antarikso Abdulrahman
Research Location : PT Multi Nitrotama Kimia (MNK)



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