Many of you are probably aware that companies are classified according to their activities, such as manufacturing, agricultural, service, trading, and extractive companies. On this occasion, we will focus on extractive companies. What exactly is an extractive company? In a nutshell, this type of company is a commercial entity that engages in natural resource management activities. The company’s activities begin with exploration and extraction and end with completing a process to meet human needs.
Extractive companies, such as mining companies, open-sea fishing, legal logging, seaweed extraction, and so on, are other types of company that deals directly with taking and utilizing the results of natural resources. Continue reading this article to learn more about the purpose, characteristics, and examples of extractive companies.
The Purpose of Extractive Company
The formation of an extractive company serves several purposes. The most important thing, however, is to process natural resources to create goods that benefit humans to create a variety of products that humans can use.
Meanwhile, another goal of extractive companies is to create jobs, profit and provide various alternative options to help meet human needs. To this point, we can all agree that extractive companies serve various valuable purposes for producers and all parties.
An increase in a country’s income or foreign exchange will promote the development of a country that can meet its people’s needs. Furthermore, the availability of unique employment opportunities improves the community’s standard of living and economy.
Characteristics of Extractive Companies
Taking from nature
Looking for profit is a natural thing in the activities of a company. The first characteristic of this extractive company is to seek profit from natural products, such as forestry products, agriculture, mining, to marine products.
Seeking profit from natural products
The second distinguishing feature is the use of natural products derived directly from nature by the company. Furthermore, this type of extractive business will handle the processing stage until the finished goods are ready for distribution to consumers.
Do you know what the goal is? Of course, the presence of this extractive company can be sufficient clothing, food, and other human needs.
Examples Extractive Companies
Some of extractive business example :
Agriculture is an industry that focuses on processing and producing commodities that support the agricultural sector. This region can be considered the main backbone of the Indonesian nation. You can find this a lot in Indonesian people who work as farmers.
Indonesia’s fertile and supportive nature has greatly facilitated the development of agricultural activities in Indonesia. This sector is claimed as one way to alleviate poverty in Indonesia.
However, currently, only activities on land are considered essential and developed, such as procuring materials and culture. Because of this, we can see that there is a part that has an essential role in helping the agricultural sector develop, namely the agricultural industry.
The plantation is any activity that utilizes certain plants on the soil or other growing media in an appropriate ecosystem. The goal is to be able to process and market goods and services from these crops. This activity is carried out using the help of science and technology, capital and management to create prosperity for plantation business people.
Next is forestry; business people practice creating, managing, using and conserving forests for the benefit of humans. This forestry product industry is an extractive industry because the raw material in wood is obtained directly from nature.
Fourth, aquaculture is an industry or activity that captures, cultivates, preserves, processes, stores, distributes, and markets fish products. FAO define this term directly, which includes the activities of recreational anglers, traditional fishers, and commercial fishing.
In this business, it requires good management to bring the business to the success it can achieve. Supply Chain Mansgement Software can help your business to meet customer demands, control inventory, and much more. You can also use the Planning & Forecasting Management feature to estimate the stock of goods available by analyzing previously available data.
Livestock is an activity of breeding and cultivating livestock to get the benefits and results of these activities. This activity, in this case, is not only maintenance because maintaining and breeding have differences, namely in their goals.
The purpose of animal husbandry is to make a profit by applying different management principles to the different factors of production that become one. Due to many livestock, the livestock sector can be divided into horses, buffaloes, cows, and other large livestock. The same is true for farms of small animals such as rabbits and chickens.
Mining is a stage of management, research, and mineral or coal exploitation, which includes general investigations, feasibility studies, exploration, construction, processing, and others.
The smooth running of a mining project also depends on transportation and logistics, so both should always work well. ERP Software provides features that help ensure smooth transportation and logistics such as driver management, transportation route planning, cargo management, cargo capacity management, transportation bookings, and others.
Based on this explanation, we can conclude that the extraction company will benefit the country if it operates efficiently. However, if not properly managed, this company can be a nightmare for business owners. We hope that reading this article will help you expand your industry knowledge, particularly about the extractive company industry. I want to expand my knowledge in the field of industry, particularly in the mining industry.
Then, in building and developing a company, you must prepare good financial reports because it will significantly affect its development. If you have difficulties in preparing financial statements, there are solutions to assist you in managing financial reports or managing flows or finances by using Accounting Software from HashMicro.This system or software can monitor the overall financial condition of your business, including income, cash balance, accounts receivable, accounts payable, and others. What are you waiting for? Try now!