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Indonesia Economy Forum

PT Semen Bosowa builds
new factory in S. Sulawesi


Andi Hajramurni, The Jakarta Post, Maros | Archipelago | Mon, November 19 2012, 9:24 PM

Cement producer PT Semen Bosowa Maros kicked off construction on a cement clinker factory, Kiln Plant Line 2, in Maros regency, South Sulawesi, on Monday, aiming to start operations in 2014.

Construction of the plant with a production capacity of 5.2 million tons per year is predicted to cost up to US$310 million and is expected to be completed within 20 months.

The company also plans to build three cement grinding factories in Cilegon, Banten, with production capacities of 1.8 million tons per year; in Sorong, West Papua and in Amurang, North Sulawesi, with each having a production capacity of 700,000 tons per year.

PT Semen Bosowa is also completing a cement factory in Banyuwangi, East Java, which is aiming to be completed next year. The company has set aside up to Rp 6.5 trillion ($674.97 million)—70 percent of which came from bank loans, while the rest came from the company’s internal cash flow--to build the five factories.

The factories—targeted to fully operate in 2015—are expected to boost the company’s cement production to 12 million tons of cement per year.

“Our current production capacity stands at only 3.2 million tons per year, only six percent of the national cement consumption,” company CEO Erwin Aksa said Monday during the groundbreaking of Kiln Plant Line 2 in Maros.

The Indonesia Cement Association recorded that the demand for cement grew by 12.8 percent from 48 million tons in 2010 to 49.2 million tons in 2011. (swd)

PT Semen Bosowa builds new factory in S. Sulawesi | The Jakarta Post

old news, but still no mention here. I hope this will be okay though

Epson opens new factory
in Cikarang


The Jakarta Post, Jakarta | Business | Fri, February 25 2011, 3:13 PM

PT Indonesia Epson Industry, a subsidiary of Japan-based Seiko Epson Group (SEG), launched its new plant at EJIP industrial estate in Cikarang, Bekasi, West Java, on Friday.

SEG director Hagata Tadoaki said that the company wanted to boost its production capacity to more than double by 2012 by opening the new facility.

“Currently, our Indonesian plant produces 6 million printers per year. With the new plant, we expect to start producing 13 million units annually by 2012,” he said during the opening ceremony of the new plant in Cikarang.

He said that in line with the expanding production capacity, Indonesian plants would contribute more than 50 percent to Epson’s total sales.

Currently, Epson’s only Indonesian plant makes up 40 percent of Epson's global sales, which reaches 15 million units.

Hagata said the new plant would absorb 5,000 new workers, adding to around the 10,000 people already employed. (lnd)

http://www.thejakartapost.com/news/2011/02/25/epson-opens-new-factory-cikarang.html
 
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Sharp to multiply home-appliance
production with Karawang
plant

The Jakarta Post | Business | Thu, June 07 2012, 5:12 PM

Home-appliance manufacturer, PT Sharp Electronics Indonesia, expects to boost its sales by setting up a new factory in Karawang, West Java, producing refrigerators and washing machines, an executive said.

The new factory is expected to double refrigerator production to 2.64 million per year, while washing machine production will be boosted more than twofold to 1.68 million annually.

"Sales in Indonesia dominated almost 40 percent of our business in the ASEAN market. The establishment of this plant is of great importance to Sharp worldwide. The plant will leverage our production capacity and enhance our business in Indonesia," said Sharp Corporation vice president, Toshio Adachi, during a ground breaking ceremony at the plant’s site in Karawang International Industrial City (KIIC).

The 31-hectare plant, worth Rp 1.2 trillion (US$126.86 million), is expected to commence production in 2013 and is expected to reach total production capacity by 2014.

Sharp will allocate 80 percent of the plant's production for the domestic market, and the remainder for overseas markets.

Sharp Electronics Indonesia’s president director, Fumihiro Irie, said the company is Indonesia's leading refrigerator and washing-machine producer, with 36 percent and 32 percent market share, respectively.

"In Indonesia, the market penetration by home appliances is still low, with 35 percent for refrigerators and only 10 percent for washing machines. Looking at the huge penetration potential, we expect to remain as No. 1 in the coming years," he said.

Industry Minister M.S. Hidayat hoped that the company would collaborate more with local companies and build a research and development (R&D) center in Indonesia.

"Looking at such large-scale production capacity, we consider that it is time for Sharp to have an R&D center here," Hidayat said.

Sharp Indonesia uses 40 percent of local materials in its products, and collaborates with 15 local companies in its manufacturing. Besides the Karawang plant, the firm produces televisions, refrigerators and washing machines at its first plant in Pulogadung, East Jakarta.

So far, Sharp has invested Rp 1.1 trillion and employs 3,773 people around the country. (yps/nvn)

Sharp to multiply home-appliance production with Karawang plant | The Jakarta Post

Six more foreign carriers
to fly to Indonesia


Nurfika Osman, The Jakarta Post, Jakarta | Headlines | Sat, July 27 2013, 10:30 AM

A least six more airlines from foreign countries — mostly from the Middle East — will begin their direct flights to Jakarta later this year to tap into the growing air traffic from Indonesia and there respective countries.

Transportation Ministry air transportation director Djoko Murjatmodjo said in Jakarta on Friday that the carriers would include Egypt Air (Egypt), Jordan Aviation (Jordan), RAK (United Arab Emirates), Oman Air (Oman), Air Niugini (Papua New Guinea), and British Airways (UK).

“They are currently processing their air slots to fly to Indonesia, and most of them will begin their flight service to our country in November,” Djoko told The Jakarta Post.

The route permits that are being processed are Cairo–Jakarta, Amman–Jakarta, Abu Dhabi–Jakarta, Muscat–Jakarta, Port Moresby–Jakarta and London–Jakarta.

He said that the carriers have been calculating the routes for the past four months. Each carrier is requested to fly between the routes three times a week to once per day.

“New service from these carriers will better connect Indonesia to international destinations and not only to their hubs. As well as provide more choices for passengers, both domestic and international, when they want to travel. This will bring more advantage for us and them,” he said.

He also said that competition among the Middle Eastern airlines to serve the Indonesian route was growing due to the sharp increase in the number of minor haj pilgrims (umrah) to Mecca and other people wanting to travel to Jerusalem and Alexandria.

Recently two gulf carriers, Qatar Airways and Kuwait Airways, announced their plans to add more flights to Jakarta in September and October, respectively.

In addition, he said that several non Middle Eastern airlines that have entered the country are applying for more flight frequency. Thai Airways is one such airline that plans to increase its Jakarta–Bangkok route.

The number of air travelers in Indonesia has increased significantly in the last few years thanks to the solid growth in the economy.

The ministry said that the number of air travelers reached 72.6 million throughout 2012, a rise of almost 15 percent from the previous year. This year, the figure is projected to hit 83.4 million passengers.

Meanwhile, the Indonesian National Air Carriers Association (INACA)’s scheduled airline division chairman Syafril Nasution said that the new flight connections would help boost the tourism sector, trade, and investment in Indonesia.

“The carriers will provide more international seat capacity to and from Indonesia; this will surely impact our tourism sector and other businesses. From a business perspective, this gives Indonesia more opportunity to invite tourists and investors and vice versa,” Syafril told the Post.

However, he said that the government should immediately accelerate aviation infrastructure in the country otherwise the growth would decline in the future.

“We are facing the ASEAN single market in 2015 that will open the flow of goods and people across Southeast Asian countries. If we want to be competitive and maintain our healthy growth, we need to fix the infrastructure,” he continued.

Infrastructure bottlenecks remain a huge problem to help sustain the country’s economic development.

In Soekarno-Hatta, for instance, the number of passenger passing through the airport has reached 54.7 million last year while it was originally only designed to accommodate 22 million passengers annually.

State run airport firm Angkasa Pura II is working on a “facelift” project to triple the capacity of the airport to 66 million and build a new apron to handle 33 wide body planes. The 7.8 trillion project is expected to finish by the end of 2014.

http://www.thejakartapost.com/news/2013/07/27/six-more-foreign-carriers-fly-indonesia.html
 
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Confusion reigns on Kuala
Namu’s first day


Apriadi Gunawan, The Jakarta Post, Medan | Headlines | Fri, July 26 2013, 9:46 AM
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Say hello to Kuala Namu Airport: Airliners park at the Kuala Namu International Airport in Deli Serdang, North Sumatra, on its first day of operations on Thursday. The 1,365 hectare facility is substitute to the Polonia Airport in the provincial capital of Medan. (Antara/Irsan Mulyadi)


The Kuala Namu International Airport (KNIA)’s first operational day was still marred with confusion while it was smooth flying all in all.

Many passengers were confused while others still went to the Polonia Airport which stopped serving commercial flights on Wednesday evening.

The passengers said they went to Polonia because they did not know how to get to KNIA which is located in Deli Serdang regency.

Ero Sitepu and his wife Lily had been looking for the airport bus everywhere but did not find one so they decided to go to Polonia, which is located inside Medan.

“Luckily there is this gentleman here so we can take the Damri bus to Kuala Namu,” Ero said while pointing to the bus driver.

State bus operator PT Damri is deploying its buses at Polonia to anticipate passengers who keep coming to Polonia which has been returned to the Indonesian Air Force.

Most passengers also found it difficult to get to the departure terminal after passing the main gate due to lack of traffic signs and lighting.

Some of them ended up at the arrival terminal, such as Heru Gani, who was bound for Bali via Jakarta using the first flight taking off from KNIA, flag carrier Garuda Indonesia’s flight GA 181. He said there was no direction at all toward the departure terminal.

Inside the airport, Heru suffered another glitch when he could not get through the boarding gate after scanning his Medan-Jakarta boarding pass.

An official could not help Heru open the gate with his own boarding pass. Heru could get through after, by chance, scanning his Jakarta-Bali ticket.

“This is very confusing. The official should have been able to open the gate instead of me scanning the Jakarta-Bali ticket,” he told The Jakarta Post in the early hours of Thursday.

Carrying 120 passengers, flight GA 181 took off at 5:22 a.m., some 20 minutes behind schedule.

Many passengers of flight GA 181 came much earlier but on-duty officials prevented them from entering the waiting lounge because there had been no officials inside.

“The officials should have been there earlier than us,” said Ria Novida Telambuana who had been there at KNIA since 4 a.m.

Garuda president director Emirsyah Satar and president director of state airport operator PT Angkasa Pura II, which manages KNIA, Tri S. Sunoko, saw the first take off from KNIA.

Meanwhile, State-Owned Enterprises Minister Dahlan Iskan, Transportation Deputy Minister Bambang Susantono and North Sumatra Vice Governor T Erry Nuradi welcomed the last airplane to land at Polonia, an AirAsia aircraft.

Dahlan and his entourage then went to KNIA on board a Garuda airplane to be the first plane to land at the new airport at 1:05 a.m.

Dahlan admitted that there were many passengers still confused on the first day claiming that he met a passenger from North Tapanuli who had asked for directions 10 times.

“This is good feedback and we will provide the signage,” he told the Post, while asking Erry to coordinate with North Sumatra Transportation Agency.

He added the shift from Polonia to KNIA was a great achievement because it meant moving some 20,000 passengers daily from Polonia.

How to get to Kuala Namu International Airport

1. Train

The KNIA train is the fastest mean to get to the airport with a travel time of some 45 minutes. Passengers can get to the Medan Main Train Station besides the Merdeka Square on Jl. Balai Kota. There are 10 trips per day in each direction.

Fare: Rp 85,000 (US$8.50)

Time table: First trip from Medan at 3:55 a.m., last trip from KNIA at 00:15 a.m.

2.Bus

PT Damri provides two bus shelters in Medan: on Jl. Gatot Subroto next to Carrefour and at Amplas bus terminal. Meanwhile, private bus operator PO ALS provides a shelter in Binjai city to serve passengers from Binjai mayoralty and Langkat regency.

Fare: Rp 10,000 (US$1) from Amplas, Rp 15,000 from Jl. Gatot Subroto and Rp 30,000 from Binjai

3. Taxi

Taking taxi needs some 60 minutes to 90 minutes to reach KNIA from Medan in a 39-kilometer trip, depending on traffic. The trip could be lengthened to some 120 minutes if there is a traffic jam.

Fare: Average Rp 145,000 (US$14.50).

Confusion reigns on Kuala Namu

President calls on lawyers
to provide justice for
the poor


The Jakarta Post, Jakarta | National | Fri, July 26 2013, 5:56 PM

President Susilo Bambang Yudhoyono has called on Indonesian lawyers to provide adequate legal assistance for the poor who, he acknowledges, to have limited access to justice.

Yudhoyono made the remark as he opened a national working meeting on legal aid held by the Law and Human Rights Ministry at the State Palace in Jakarta on Friday.

“Hopefully this national working meeting will establish policy and strategic measures to provide legal assistance to Indonesian people especially the poor,” Yudhoyono said as quoted by Kontan.co.id.

He acknowledged that justice in the country was sometimes enjoyed by particular groups of people only, not the poor who had little understanding of legal matters.

The President also reminded the lawyers about Article 28 of the Constitution, which stipulates that, “Every person shall have the right to recognition, guarantees, protection and certainty before a just court, and of equal treatment before the law”, as a mandate to provide justice for all.

The government has decided on Law No. 16/2011 on the provision of legal aid as the legal basis for the country to guarantee justice for all, especially for the poor.

To implement the law, the government has issued Regulation No. 42/2013 on procedures for the provision of legal assistance and legal aid fund distribution. (hrl)

http://www.thejakartapost.com/news/2013/07/26/president-calls-lawyers-provide-justice-poor.html

That will help so many peoples out here to face unjustice trials in this country
 
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NU Germany praises RI's
role in tourism fair, criticizes
SBY on other issues


The Jakarta Post, Jakarta | World | Fri, March 01 2013, 7:00 PM

The German branch of Nahdlatul Ulama, Indonesia’s largest Muslim mass organization, has welcomed President Susilo Bambang Yudhoyono’s plan to visit to the International Tourism exhibition in Berlin, which will be organized from March 6 to 10 and which Indonesia will be co-hosting.

In a press release sent to The Jakarta Post on Friday, It expressed the hope that Indonesia’s leading role in the exhibition could be followed by fruitful cooperation between the two countries.

However, as well as praising the President’s visit, NU Germany, which mostly consists of NU intellectuals who are pursuing degrees in Germany, also criticized some of the President latest moves. It criticized, for example, Yudhoyono’s preference for tackling internal party matters instead of addressing the entire nation’s problems.

This decision, it added, could be a political blunder for the President whose tenure will end next year.

Yudhoyono was also criticized for the rising tide of religious-based violence mostly perpetrated by religious radicals against minority groups like the Ahmadiyah, the Shiah and non-Muslims. NU
Germany also questioned Yudhoyono’s economic development success story claiming it was not supported by improvements in people’s purchasing power or public services.(dic)

NU Germany praises RI's role in tourism fair, criticizes SBY on other issues | The Jakarta Post
Indonesia was the largest partner for 2013 Germany Touristm Fair

Expatriates to get property
ownership rights in Indonesia


The Jakarta Post, Jakarta | Business | Fri, July 26 2013, 12:11 PM

The government is currently revising a regulation that would enable foreigners to own property in Indonesia, says an official.

The regulation, Government Regulation No. 41/1996 on residential property ownership by foreigners, as of now only enables a non-national to occupy a building or land for 25 years.

“The decision on the draft bill will have to wait for approval from the House of Representatives and the Coordinating Economic Ministry,” Deputy for area development at the Public Housing Ministry Agus Sumargiarto said on Thursday, as quoted by Kontan.co.id.

To acquire property ownership rights, however, according to Agus, foreigners will have to comply with tough requirements. For example, they would have to own a

business in Indonesia and should they want to sell their property, they would only be allowed to sell it to the government.

The government expects the bill to boost economic growth when the ASEAN single market is implemented in 2015.

Agus added that the kind of property that could be owned by foreigners, according to the draft bill, would be premium housing with a maximum of 50 to 60 years occupancy.

The draft bill, however, has the potential of breaking Law No. 5/1960 on agrarian issues. Therefore, Agus said that the government would let the National Land Agency

(BPN) and the House handle the matter as the two institutions were currently revising the law.

Association of Housing Development in Indonesia (Apersi) chairman Eddy Ganefo said the decision to allow foreigners to own property clearly violated the Agrarian Law as it states that land in Indonesia can only be owned by Indonesian nationals. (hrl)

http://www.thejakartapost.com/news/2013/07/26/expatriates-get-property-ownership-rights-indonesia.html

China slowdown implications
on RI spook policymakers

Satria Sambijantoro, The Jakarta Post, Jakarta | Headlines | Sat, July 27 2013, 11:03 AM


A recent slowdown in the Chinese economy could persist in the long-run, affect global demand and depress commodity prices down even further, eventually hurting its trade partners, including Indonesia.

The Indonesian government earlier targeted its economy to grow 6.3 percent this year, but the slowdown in China may force Indonesia to face the reality of less than 6 percent growth for the first time in almost three years.

“Economic slowdown in China is one of the reasons why we cut our economic growth forecast to between 5.8 percent and 6.2 percent this year,” Bank Indonesia (BI) Deputy Governor Perry Warjiyo said on Friday, citing the fact that China accounted for around 15 percent of Indonesia’s exports.

China posted economic growth of only 7.5 percent in the second quarter, its slowest pace since the 2009 global recession, with a further slowdown expected.

A slower growth of China would consequently drag down Indonesia’s growth, according to Eugene Leow, a regional economist with the Singapore-based DBS Bank.

“If China’s growth faces a slowdown, then commodity prices will become more lackluster,” he told reporters in a press briefing in Jakarta on Friday.

“This has important implications for Indonesia.”

In addition, low commodity prices would weigh on Indonesia’s export earnings. This would consequently put pressure on its current account deficit and ultimately the rupiah, Leow said.

China is Indonesia’s biggest export destination, absorbing US$21 billion of exported goods — mostly commodities, such as coal or palm oil — from the archipelago throughout last year, according to data from the Central Statistics Agency.

A 1 percent deduction of economic growth in China could decelerate Indonesia’s economy by up to half a percent, attributed to strong linkage between the Asian giant and Southeast Asia’s largest economy, noted the International Monetary Fund (IMF).

Responding to the recent slowdown, Chinese Premier Li Keqiang has stated that his government viewed a 7 percent growth as the bottom line for tolerance of an economic slowdown, and that he would not tolerate anything below that.

China, now the world’s second-largest economy, once grew by 10.4 percent in 2010.

“[China] once had double-digit economic growth, demanding a lot of commodities to support it, and Indonesia was more than able to supply,” Leow said.

“The situation for the next three to five years will be very different for China, and very different for Indonesia.”

Besides hurting Indonesia’s economic growth from the export side, a deceleration in the Chinese economy would also hurt the archipelago from investment channel, which is Indonesia’s second-biggest growth driver after household consumption.

A gloomy economic outlook in China would prompt local, commodity-reliant companies in Indonesia to hold back from increasing their investments, Leow said.

“I don’t think there will be huge demand for investments in commodity-related sectors because the prices of commodities are likely to remain low as China is moderating.”

In its report released earlier this month, the Asian Development Bank (ADB) also warned that slower economic growth in China was “weighing on the outlook for developing Asia”.

“The drop in trade and scaling back of investments are part of a more balanced growth path for the People’s Republic of China, and the knock-on effect of its slower pace is definitely a concern for the region,” ADB chief economist Changyong Rhee said in a statement.

http://www.thejakartapost.com/news/2013/07/27/china-slowdown-implications-ri-spook-policymakers.html
 
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Infrastructure ‘ready’
ahead of massive annual
exodus


Nurfika Osman and Slamet Susanto, The Jakarta Post, Jakarta/Yogyakarta | Headlines | Sat, July 27 2013, 11:16 AM

Infrastructure and transportation are “ready” to accommodate the surge of people willing to travel ahead of and return after Idul Fitri, the government says.

Public Works Minister Djoko Kirmanto says the country’s busiest national road network, Java’s northern coastal highway (Pantura), is in good shape and major problems such as holes and uneven roads between Merak, Banten and Surabaya, East Java, have been repaired.

“We started the repair work on Pantura since early 2013 [...] the work is also aimed at maintaining its shape because average daily traffic in Pantura is high and it keeps increasing every year,” he said on Friday.

He added that the ministry had spent 40 percent of the Rp 1.28 trillion (US$124.16 million) allocated this year on the repair work, which was carried out every year ahead of the Idul Fitri holiday.

Djoko also said that 229 out of 1,316 kilometers (km) of the road had been constructed with rigid surfacing instead of asphalt and another 106 km with high quality asphalt to better handle traffic.

The ministry has predicted that the average daily traffic would increase by 6 percent to 46,640 vehicles during the exodus.

Around 70 percent of 11.5 million vehicles traveling in this year’s Idul Fitri holiday would pass through the highway, according to data from the Transportation Ministry.

In addition, Djoko said three overpass projects worth Rp 309 billion along the highway had been finished. The projects are located in Kali Banteng in Semarang, Central Java; Jombor in Yogyakarta; and Peterongan in Jombang, East Java.

The Pantura repair works seemed to be very repetitive so the Supreme Audit Agency (BPK) is carrying out an investigation.

“We’re collecting data and making the mapping. It will be completed soon,” BPK chairman Hadi Poernomo earlier said, adding the focus of the investigation was on why the road needed repairs every year and vehicle tonnage regulations, among other things.

The Corruption Eradication Commission (KPK) is also verifying reports by the public about alleged corruption in the Pantura roadwork projects.

“We’ve just received reports and we’re verifying them,” KPK chairman Abraham Samad earlier said.

Meanwhile, Transportation Ministry spokesman Bambang S. Ervan said the Rp 9.8 trillion Trans-Java double-track railway project would be ready by the end of this year “so that the burden of the dense highway will decrease in next year’s Idul Fitri holiday”.

Separately, state railway operator PT KAI’s Operational Region (Daop) VI Yogyakarta would operate six additional trains to anticipate the growing number of passengers that could reach 157,000 — a 7 percent increase from last year — during the annual exodus, said Daop VI’s spokesperson Sumarsono.

Riau Transportation Agency head Surya Maulana said 19 ships and 80 flights had been prepared to handle travelers this year.

The ships will help transport people who want to travel between the Sumatran province and the islands in the Malacca Straits while the flights will connect them to destinations across Sumatra and Java.

Budget allocation for repair work on Java’s northern highway

Year Total budget

2010 Rp 1.47 trillion
2011 Rp 1.22 trillion
2012 Rp 1.03 trillion
2013 Rp 1.02 trillion

Rizal Harahap contributed to this story.

Infrastructure

Cikarang Dry Port ghost
town despite crowded Tanjung
Priok Port


The Jakarta Post, Cikarang, West Java | Headlines | Thu, July 11 2013, 9:53 AM


With increasing inefficiency at Tanjung Priok, the country’s main port, Cikarang Dry Port in West Java remains under utilized by both exporters and importers.

The privately controlled dry port recorded 9,869 20-foot equivalent units (TEUs) of volume realization during the first half this year, well below its total capacity of 400,000 TEUs.

Containers can access the dry port by road, which is located around 65 kilometers from Tanjung Priok Port in North Jakarta. The port has an integrated port service system, including customs, clearances and quarantine, according to Cikarang Dry Port managing director Benny Woenardi.

“A [recent] survey from the World Bank stated that total costs for imported goods [using the dry port] were 50 percent lower than [those using the Tanjung Priok Port],” he told journalists invited to the site, adding that the time needed to process goods at the dry port also was 50 percent faster than at Tanjung Priok.

The 200-hectare dry port — operated by PT Cikarang Inland Port, a subsidiary of publicly listed PT Jababeka — is near several industrial areas like Bekasi and Karawang. Jababeka also owns an industrial area of around 2,500 factories in Cikarang.

According to Benny, Cikarang Dry Port is targeting a utilization level of 30,000 TEUs for 2013 and expects to get a total of 100 customers by the end of this year, from 19 customers last year.

“We already have 70 customers,” said Benny, adding some of the new customers were from the automotive, electronics and fast moving consumer goods sectors.

Among those using the dry port’s services are consumer goods producer Unilever, food producer Kraft, motorcycle maker Yamaha and milk producer Ultrajaya.

Benny said Jababeka also cooperated with state logistics firm PT Kereta Api Logistik to get goods delivered from Cikarang to Surabaya, East Java.

The dry port operator also cooperates with Iron Bird for transportation of goods from the dry port to
Tanjung Priok and from the dry port to factories.

Businesspeople have been blaming Pelindo II, state operator of Tanjung Priok Port, and the government for “lengthy” dwelling time and “high” yard occupancy ratio — both are port efficiency measurements — at the port.

The dwelling time at Tanjung Priok Port has continued to increase — for example from six-and-a-half days last year to eight days this year — in line with its economy that has annually expanded to more than 6 percent since 2010 despite President Susilo Bambang Yudhoyono’s order to stakeholders to reduce the dwelling time at the port to three days.

The dwelling time begins from the time a carrier moors at a port to the time its cargo is unloaded and the cargo leaves the port, or vice versa.

The Indonesian Chamber of Commerce and Industry said Tanjung Priok Port’s yard occupancy ratio (YOR) had shot up to over 100 percent. The lower the YOR, the less space containers take up at port, thus, the faster the containers move.

Kadin Jakarta deputy head Sjafrizal BK earlier said businessmen could lose up to Rp 4.8 billion (US$480,000) per day due to the inefficiency at the port.

Indonesia’s logistics performance is one of the poorest among Southeast Asian countries, ranked 59th out of 155 developing and high-income economies included in the World Bank’s 2012 logistics performance index, far behind the Philippines and Vietnam.

According to the Indonesia Logistics and Forwarder Association (ILFA), Indonesia sits at the bottom with an average of 8.7 days dwelling time, compared to Thailand with five days and Singapore with 1.2 days.

http://www.thejakartapost.com/news/2013/07/11/cikarang-dry-port-ghost-town-despite-crowded-tanjung-priok-port.html

Just built the rail transport to make a connection between those two ports, and make a better regulation and please catch those ******* rats who made money in this messy situations
 
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Pelindo III to build gas-fired
power plant


Nurfika Osman, The Jakarta Post, Jakarta | Business | Thu, July 25 2013, 11:32 AM

State-run port operator PT Pelindo III will team up with state engineering company PT Rekayasa Industri (Rekind) to build a gas-powered electricity plant to support the operation of the Teluk Lamong Multipurpose Terminal near Surabaya, East Java, once it is operational.

Pelindo III president director Djarwo Surjanto said that the power plant, which would have a capacity of 2 by 25 megawatts (MW), would be built with an investment of about Rp 1 trillion (US$99 million).

He said the power plant would be vital to the operation of the US$336 million terminal, which would need a large amount of electricity.

“Teluk Lamong is going to be the first semi-automatic port terminal in Indonesia, since much of its supporting equipment will be fueled by electricity. The plant will help smooth the operation of the terminal,” Djarwo said.

Equipment that will require electric power include automated container transporters and automated stacking cranes. A gas-fired power plant was chosen because the firm wanted to reduce the usage of fossil fuel, creating an eco-friendly terminal, he said.

At full capacity, the multipurpose terminal alone will need 120 megawatts of energy. “We will need 120 megawatts of energy by 2020, but in the first phase of [Teluk Lamong] operation, we will need around 16 megawatts. So, this plant is a long-term solution,” he said, adding that state electricity company PT PLN would be the main source of energy for the terminal.

Teluk Lamong is being developed to help support the nearby Tanjung Perak Port in Surabaya, East Java, which has been running at overcapacity.

According to recent Pelindo III data, the port is overcrowded, forcing ships to wait for up to three days, which increases cargo costs.

The port has a capacity to accommodate only 3.57 million tons of general cargo annually, while traffic reached some 7 million tons throughout 2012.

In the first phase, the terminal will comprise a 500-square-meter international yard, 450-square-
meter domestic yard, a 10-hectare dry bulk yard and a 15.86-hectare container storage yard to help ease congestion at Tanjung Perak.

According to spokesman Edi Priyanto, the construction of almost all yards will be completed by November. “We just need to prepare the office building and its facilities. We plan to commence operation of the terminal between April and May next year,” he said. He said that the company had also prepared another 250 hectares for future expansion because container traffic was projected to continue increasing in East Java, the main gate for trade to the eastern parts of Indonesia.

Pelindo III to build gas-fired power plant | The Jakarta Post
 
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Farmers demand better infrastructure
after fuel hike


Nana Rukmana, The Jakarta Post, Cirebon | Archipelago | Thu, July 04 2013, 7:35 AM

Farmers in Cirebon regency, West Java, have demanded that the central government develop and renovate agricultural infrastructure following the fuel-price hike, as it had previously promised.

“The development and renovation of agricultural infrastructure is part of the government’s promise to offset the rise in fuel prices,” chairman of the Cirebon branch of the Andalan Farmers and Fishermen’s Group (KTNA), Sa’adi, said.

“It is imperative the government does this immediately because a large part of the agricultural infrastructure in Cirebon is not functioning due to damage and old age.”

He added that the damaged facilities included irrigation networks and water retention sites, such as reservoirs.

“Farmers also expect other forms of compensation following the subsidized-fuel increase, such as a supply of fertilizers at affordable prices. Farmers need this more than the BLSM [temporary direct cash assistance] payments,” he said.

The Cirebon regency administration also agreed that the development and improvement of agricultural infrastructure was important.

Cirebon Livestock and Agriculture Agency head, Ali Effendi, said a large number of infrastructural facilities was not functioning optimally due to damage.

“About 60 percent of the 60-kilometer irrigation network in Cirebon is severely damaged, while the rest is not functioning at its best due to old age, so it is very hard to increase productivity,” he said.

Ali added that at least 20,000 hectares of rice fields in the north of the regency were prone to drought during the dry season. He was upbeat, however, that water shortages would be remedied when the Jatigede Dam in Sumedang regency began operating in 2014.

The dam, whose construction was started in 2008, will hold back water from the Cimanuk River. It is estimated the collected water will be able to irrigate 90,000 hectares of rice fields in northern areas of Cirebon and Indramayu regencies.

In Cirebon regency, drought-prone farmland covers 11 districts, namely Kapetakan; Suranenggala; Gunung Jati; Arjawinangun; Susukan; Gegesik; Pabedilan; Panguragan; Ciwaringin; Mundu, and Kecamatan Gebang.

Overcoming drought, added Ali, would further strengthen Cirebon regency as one of West Java’s prime rice producers. The regency has 50,000 hectares of paddies that produce 570,000 tons of unhusked rice or 350,000 tons of rice.

Tasiman, a farmer in Mundu, said every dry season he had to rent a pump to draw water, costing between Rp 20,000 (US$2) and Rp 30,000 per hour, so his 1-hectare rice field could be irrigated.

“We have to rent a pump for at least six hours a day to water the rice field to prevent harvest failure. For farmers, renting a pump adds to their financial burden, with cultivation costs of between Rp 4 million and
Rp 5 million per hectare,” he said.

Farmers demand better infrastructure after fuel hike | The Jakarta Post

RI braces for high inflation
era


Satria Sambijantoro, The Jakarta Post, Jakarta | Headlines | Fri, July 26 2013, 10:30 AM


After years of enjoying a period of high growth and low inflation, Indonesia is entering a high inflation era following the government’s recent move to raise prices of subsidized fuel.

The central bank has forecast annual inflation in July to breach 8 percent, the highest in four years, a situation that may weigh on economic growth and drive up the government’s bond yields and debt payments.

“Bank Indonesia conducts a price level survey in 20 cities every week to monitor inflation; we see that inflation in the third week [this month] may reach 8 percent,” Governor Agus Martowardojo said Thursday after his meeting with top officials from Trade Ministry, Agriculture Ministry, Finance Ministry and Industry Ministry at BI’s headquarters in Jakarta.

The last time that Indonesia posted such high level of inflation was in February 2009, when it hit 8.6 percent, according to BI data. The government targeted annual inflation to reach 7.2 percent in the revised 2013 State Budget, while the central bank forecast inflation to stay below 7.8 percent this year.

Agus estimated that the monthly inflation would rise by 2.77 percent in July, bringing the year on year inflation to more than 8 percent due to the surge in subsidized fuel prices last month.

The consumer price index rose 5.9 percent in June from a year earlier, the fastest pace since May 2011.

Inflation overshot when the government hiked fuel prices in 2005 and 2008, but analysts said that the situation this time might be different, given additional imported inflation pressure from the weak rupiah and high consumption during the Ramadhan fasting month.

The fuel price hike may drive up inflation to as high as 9 percent between July and September this year, the World Bank said in its recent report, titled “Adjusting to Pressures”.

“The impact is likely to be more significant this time compared to 2008 and 2005,” Gundy Cahyadi, an economist with OCBC Bank in Singapore, said on Thursday.

“The fact that the rupiah has been weak and that last year’s inflation was excessively low; we are likely to see annual inflation staying around the 8 percent level for a little longer, relative to the past two episodes,” he explained

In addition, high inflation would theoretically erode returns in the bond market, driving up yields and triggering capital outflow, which ultimately would exert further pressure on the rupiah. “We must monitor inflation because it would affect our exchange rate,” Agus said.

Having seen steep depreciation over the last few days, the rupiah was relatively stable on Thursday, weakening by only 1 basis point to hit 10,263 per US dollar, according to the Jakarta Interbank Spot Dollar Rate (JISDOR).

The rupiah is now in the process of “converging until it meets its new equilibrium rate”, according to the BI governor.

The rupiah rate of around 10,200 per dollar has lured foreign investors to enter the bond market, Finance Minister Chatib Basri told reporters, citing the recent downward trend in bond yields, which stood at around 7.8 percent at the moment, from 8.3 percent only days ago.

The minister explained that the high inflation in July — which stemmed from the government’s moves in hiking fuel prices, coupled with higher consumption during Ramadhan — would be temporary.

Price levels would return to “relatively small” figures in September, before the country experienced deflation in the following months, Chatib said. “With lower inflation expectations ahead, the bonds yields will decline,” he reassured.

The Finance Ministry’s debt management office raked Rp 5.27 trillion from a sukuk bond auction this week, more than three times its indicative target of Rp 1.5 trillion. The government tolerated high yields, with weighted average yields from the 30 year Islamic debt papers offered during the auction topping 8.55 percent.

In response to the high inflation, Agus — who has jacked up both BI rate and overnight deposit facility rate (Fasbi) by 75 basis points since he took office in May — hinted over implementing more monetary tightening in the future.

http://www.thejakartapost.com/news/2013/07/26/ri-braces-high-inflation-era.html

I hope this situations just happen For a while
 
.
Analysis: Smarter phones
and dumber people


Debnath Guharoy, Roy Morgan | Business | Tue, July 02 2013, 11:25 AM


The quarter ending March was in a way a milestone. The trend-line tracing the growth of mobile phone penetration hit another all time high, 84 percent. That’s where the percentage number will most likely hover around in the future, even while the total number of users continues to climb in keeping with population growth. This signals a coming of age for the country, the economy, the people.

A small percentage of the population, 10 percent, has more than one handset. That number isn’t likely to change much either. The replacement market is getting bigger each year, as prices drop and technologies improve. Now it’s the “smartphone” that’s all the rage, a “must-have” for tens of millions chasing the dream. An amazing 24 percent of adult Indonesians already own a smartphone, another statistic that is expected to cross 33 percent by the end of the year.

These hand-sized computers are capable of much more than they are being tasked to do, but it is early days. Most of the users are tuning into the Internet, with much of that time spent on Facebook and Twitter. As the weeks and months go by, we can expect more and more people to take to e-commerce and mobile banking, encouraged by the sheer convenience of doing things on-the-go. It is a game-changer. More women are shopping online, more men are getting their news off the web. In so many other ways, we are changing the way we used to behave. The smartphone is making it all so easy.

This smart new instrument will help make people smarter. If we are all doing more, much faster, from anywhere at anytime, that’s smart. Who can argue with that, do I hear you say? Edward Snowden certainly could. Whichever side of the argument you are on, whether you think he is a villain or a hero, the inescapable truth is simply this: you are being spied on. From the spy’s perspective, the smarter your phone the dumber you get. I’m no technology wizard, far from it. But I would urge you to talk with one. Or go online and do some serious reading. Here’s what I have concluded, as a consequence of the time spent and effort made, thanks to the ongoing Snowden drama.

First, I am going to switch off my computer and my smartphone, before I go to sleep. Not just the browsers, but the instruments as well. Power off. That’s because I do not want to be “harvested”, I do not want my identity to be used or my files spied on. Is that happening? The answer is I don’t know. Can it happen? The answer to that is a resounding yes. I do not want anyone to go through my drawers. I do not want my privacy to be invaded. Not by anyone. Not the bad guys or the good guys. What is increasingly troubling is that I’m no longer able to tell who’s who.

Just days before the American president was scheduled to accuse his visiting Chinese counterpart of cyber-attacks, Snowden let the world know the truth. By revealing some of the evidence, not all that he has in his posession, a young man has ignited an important debate right around the world. Whether he was right or wrong, only a court should decide. Except for the fact that he is a “whistle-blower”, not an enemy combatant.

Have you wondered why the authorities, supported by the media, are so focused on debating the pros and cons of an individual’s actions, without aiming the halogen lamps at the National Security Agency of the United States? Why are we so eager to know why he did what he did but show little interest in asking the champions of democracy, human rights and all the other good stuff, to explain their violations of privacy right around the globe? As one European parliamentarian put it, “you do not spy on your friends”.

I am not an American. If I were, I’d be very angry, disappointed and worried, all at the same time. I understand the need for the state to keep its people safe. I respect the law and the people who are elected to make them. If the world we live in requires our security agencies to inspect our rubbish bins every night, then the necessary laws needs to be enacted, protocols and procedures put in place, and only then enforced. If I cannot accept the law of the land, then the two choices before me are plain. Protest, till the law is suitably amended to the satisfaction of all concerned. The abuse of an ancient law that was written well before the internet had even been imagined is an abuse of power, by my reckoning. The second option is to leave the country and make life difficult for the authorities bending the rules at home.

Fortunately, I don’t have to do either. Not yet, anyhow. That does not mean I, or you, have nothing to fear. The debate on basic rights, freedoms and responsibilities will intensify in the months and years ahead. It is a discussion we need to engage in, for the sake of humanity. We must remember that the internet has no geography, no borders, and very few rules.

We should think again about the fact that Google, Facebook, Twitter and Yahoo are all American corporations. If the CIA went to the trouble to ask for a US court order to search your account, these corporations would be obliged to open their vaults. I cannot imagine any US court writing search warrants for Indonesia’s BIN or Australia’s ASIO for that matter.

No one, no body, no country is above the law. If the law required does not exist, it is now time for the debate, to write the law that’s appropriate at least for today if not tomorrow. What will vex most lawmakers is the need for international law to govern what is a borderless world, the Internet. The Americans are not exactly famous for their support of the International Criminal Court, the Kyoto Protocol or other such global initiatives. And so, we will continue to live in a new Wild West, for some time to come. For your own sake, and the health of your business, be careful of the companies you keep. Do you really have to tweet? Though I have nothing to hide, I would rather be faceless now than be on Facebook.

The writer can be contacted at debnath.guharoy@roymorgan.com

Analysis: Smarter phones and dumber people | The Jakarta Post

US-ASEAN businessmen lobby
Indonesia on TPP


The Jakarta Post, Jakarta | Business | Tue, June 25 2013, 11:35 AM
TPP.jpg


Business ties: President Susilo Bambang Yudhoyono (right) welcomes US-ASEAN Business Council chairman Evan Greenberg to the presidential office in Jakarta on Monday. Greenberg came with delegates from the American Chamber of Commerce. JP/Jerry Adiguna
US businessmen grouped under the United States-ASEAN Business Council are seeking ways to access the Southeast Asian market, which has a population 620 million, through a Trans-Pacific Partnership (TPP).

Feeling a great need to capitalize on the regional market that has a gross domestic product totaling US$2.2 trillion, the council released a policy paper last Wednesday to provide a number of policy recommendations, including calls for the completion of TPP negotiations by late this year, and for US and ASEAN governments and business sectors to develop two-way trade and investment.

During their three-day visit to Jakarta, council members and executives met with President Susilo Bambang Yudhoyono in a likely attempt to lobby the Indonesian government to join the TPP.

The Indonesian government, which previously showed little interest in the US-led TPP, said in April that it would likely join TPP negotiations, if negotiations on the regional comprehensive economic partnership (RCEP) between ASEAN members and Australia, China, India, Japan, South Korea, New Zealand as well as Indonesia’s talks on a comprehensive partnership agreement with South Korea went well.

“With the growing middle-class and a more robust public sector in ASEAN, the US needs to focus on actions that can tackle the challenges of market competition in ASEAN,” said council chairman Evan Greenberg at a press meeting in Jakarta on Monday.

“We also support the idea of a US-ASEAN free trade agreement. Although it will take time, we think that is an aspiration our government and other governments in ASEAN should work on.”

Yudhoyono said separately as quoted by Antara news agency that the council’s visit was expected to help “further strengthen and expand our cooperation and partnership”.

Greenberg was accompanied by senior advisor to the US-ASEAN Business Council Ambassador John Negroponte and US-ASEAN Business Council President Alexander C. Feldman. The council will complete its visit on Tuesday and depart for Kuala Lumpur, Malaysia.

According to Malaysia’s International Trade and Industry Ministry’s website, although Malaysia has free trade agreements (FTAs) with most TPP members, it is considered a positive step toward deeper integration within the Asia-Pacific region.

The TPP accounts for a third of Malaysia’s global trade.

The paper states that completing TPP negotiations provides a strong basis for a subsequent US-ASEAN FTA, as it would pave the way for “all ASEAN countries to join the TPP, an eventual APEC-wide free trade region, or alternatively, a US-ASEAN FTA”.

ASEAN members are the market for $75 billion and $25 billion in American goods and services exports, respectively, as well as nearly $170 billion in US foreign direct investment.

The paper, however, also highlighted challenges that could “deter investment”, like enforcement of localization of data, intellectual property and manufacturing.

Greenberg also said challenges related to investment in ASEAN varied from one country to another, with different cultural and historical backgrounds as well as economic development. “Each country, depending on the economic sector, will either be more open or more closed to foreign investment and foreign business, and it really varies quite a bit. Ownership rules vary, local content rules vary and the legal environment varies,” Greenberg. (asw)

http://www.thejakartapost.com/news/2013/06/25/us-asean-businessmen-lobby-indonesia-tpp.html

Those Jews finally found Indonesia and Asean is important for their macroeconomics business future
 
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Foreign investors reflect
a stable economy: Minister


The Jakarta Post, Jakarta | Business | Thu, July 25 2013, 8:43 PM

Finance Minister Chatib Basri said the growing presence of foreign investors in Indonesia indicates that the condition of the economy is relatively stable.

“Foreign investors have started to come to the country again. I’ve seen the symptoms. Pak Governor [Bank Indonesia] said exporters had also begun to supply their dollars. The foreign currency markets have also started to sell their dollars. This shows we are more stable now,” said Chatib after a coordination meeting at Bank Indonesia (BI) in Jakarta on Thursday, as quoted by Antara news agency.

Chatib said the stabilizing of the economy could be seen in the decline of yield from 8.3 percent to 7.8 percent.

The minister also said national economic growth, which was within a range of 6 percent, would remain the highest in Asia after China whose economy grew 7.7 percent.

Chatib said the stock index, which stood at 9.8 percent, remained in the positive area unlike Singapore and Thailand.

He said that he was optimistic that inflation, due to volatile food prices, would decrease in September. “In September, inflation will be relatively low. After that, we even hope that there will be a deflation,” said Chatib. (ebf)

Foreign investors reflect a stable economy: Minister | The Jakarta Post

We are doing better in economic sector than several ASEAN countries right now

Kalla Group signs MOU with
PLN


The Jakarta Post, Jakarta | Business | Thu, July 25 2013, 4:54 PM

A business group belonging to former vice president Jusuf Kalla, PT Kerinci Merangin Hidro, has signed a memorandum of understanding (MOU) with state-owned State Electricity Company (PLN) for the purchase of electricity from the Merangin hydropower plant (PLTA) in Jambi.

The power plant is designed to have a capacity of 350 MegaWatts (MW) and is located in the Kerinci regency in Jambi. The power source will come from the nearby Kerinci Lake and will operated by PT Kerinci Merangin Hidro.

The project was initially planned to commence in 2010.

PLN president director Nur Pamudji said that his company had utilized a new approach to guarantee electricity supplies provided by private parties by inviting banks get involved from the initial phase of negotiations.

“With this new approach, private electricity projects are expected to achieve the financial close phase sooner,” Nur Pamudji said as quoted by Kontan.co.id.

http://www.thejakartapost.com/news/2013/07/25/kalla-group-signs-mou-with-pln.html

Fitch revises IMT's outlook
to positive


The Jakarta Post, Jakarta | Business | Thu, July 25 2013, 4:50 PM

Ratings agency Fitch Ratings has revised Indonesia-based PT Ivo Mas Tunggal's (IMT) outlook to positive from stable, while its national long-term rating has been affirmed at “AA (idn)”.

“The outlook revision reflects the improved access of majority shareholder Golden Agri Resources (GAR) to debt and capital markets, following successful issuance in 2012 by GAR and subsidiaries of close to US$1 billion of debt,” Fitch said in an official release.

“This suggests that bond investors are no longer averse to the group due to its history of debt restructuring, which had in the past constrained its ability to raise borrowings. Fitch views GAR's improved funding access as a direct benefit to its subsidiaries, including IMT, as they mostly rely on intercompany loans for expansion plans.”

According to Fitch, the ratings continue to reflect IMT's strong strategic and operational linkages with GAR.

“IMT contributes about 25 percent of the group's annual crude palm oil (CPO) production and planted area. IMT also channels export sales through the group's trading arm, Golden Agri International while GAR extends intercompany loans and seconds key executives to IMT,” Fitch said.

IMT has completed the acquisition of three new plantations in Kalimantan, adding 23,460 hectares to its existing plantation portfolio. Given its average plantation age of about 4 to 5 years, management expects these new plantations to start contributing materially in the next 24 months, and to improve the overall plantation age to 15.9 years from 17.4 years previously.

“This acquisition will also provide IMT with medium-term growth stability, especially in light of increasingly limited acquisition opportunities,” Fitch said.

IMT will start commercial operation of its refinery in 2015, with about a 900,000 ton/year production capacity. Management estimates that up to 70 percent of internally-produced CPO will be further processed into refined products, which will significantly alter the company's product mix from mostly upstream palm oil products such as CPO and palm kernel oil.

“Fitch views this change as positive as it will enhance the group's operational integration and result in reduced costs due to lower export taxes on refined products,” Fitch said.

The ratings are constrained by the inherent cyclicality of CPO as a commodity, according to Fitch.

http://www.thejakartapost.com/news/2013/07/25/fitch-revises-imts-outlook-positive.html
 
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Puradelta hopes to raise
over Rp 2t from IPO


Raras Cahyafitri, The Jakarta Post, Jakarta | Business | Thu, July 25 2013, 12:29 PM

Property developer PT Puradelta Lestari, which is known for its industrial township Kota Deltamas, aims to raise Rp 2.7 trillion (US$270 million) through its initial public offering (IPO) to finance its development.

Puradelta announced on Wednesday that it would offload 10.84 billion new shares, which will be equal to 20 percent of its enlarged capital, in the IPO.

The share price has been set between Rp 205 to Rp 255, with the possibility of returning up to Rp 2.7 trillion.

Puradelta has appointed PT Macquarie Capital Securities Indonesia and PT Sinarmas Sekuritas as underwriters for the offering.

The company will start offering on Aug. 16 and plans to list its shares on the Indonesia Stock Exchange (IDX) on Aug. 26.

Puradelta will use 60 percent of the funds raised from the offering to finance the development of infrastructure and other supporting facilities for Kota Deltamas. Twenty percent from the IPO will be used as working capital and the remaining 20 percent will finance land acquisition near Kota Deltamas in Bekasi, West Java.

Puradelta currently has 2,989 hectares (ha) land in total, of which 1,406 ha are allocated to industrial estate, 826 ha for residential and 757 ha for commercial development.

Puradelta director Hermawan Wijaya said the company expected to acquire around 200 ha near its existing land bank in the next two years.

“We will use the funds from IPO and will look for funding from other sources if necessary,” Hermawan said.

Puradelta is targeting to sell a combined 100 ha of industrial estate, residential and commercial land this year. According to Hermawan, the company sold around 50 ha in the first half of the year.

One of Puradelta’s clients was Japanese retailer AEON Group, which bought 20 ha to build a shopping mall.

Among Puradelta’s tenants on Kota Deltamas, are muffler manufacturer Futaba Industrial Co. Ltd., window regulator manufacturer Shiroki Corporation, plastic component manufacturer Daiho, Suzuki and Astra Otoparts.

Prior to the offering, Puradelta was 45.97 percent owned by AFP International Capital Pte. Ltd., 2.74 percent owned by Jermina Ltd., and 1.29 percent owned by PT Sumber Arusmulia.

The three companies are currently under conglomerate Sinarmas Land.

Puradelta hopes to raise over Rp 2t from IPO | The Jakarta Post

Never heard Puradelta before

Analysis: Banks: Flight
to safety


Teguh Hartanto, Bahana Securities | Business | Thu, July 25 2013, 12:15 PM

The expected spike in inflation — due to the subsidized fuel price hike — has caused changes in banks’ business strategies, shifting attention away from growth to liquidity and quality.

Bank Indonesia (BI) rate increases — by 75 basis points (bps) to reach 6.50 percent since February 2012 — has meant banks have reviewed their pricing accordingly.

Consequently, this has triggered a new equilibrium: With banks balancing between loan growth and quality, suggesting lower risk tolerance. Based on our regression model, these changes in macro-economic indicators (i.e. interest rates, GDP growth and foreign exchange volatility), yield to lower loan growth expectation of around 19-20 percent compared to 22-23 percent previously.

Additionally, new loan underwritings will be apportioned toward selective debtors and specific market segments. In mortgage, for example, the potential bubble in the property market has discouraged banks from aggressive lending. On the regulation front, the central bank, sharing the same perspective on this potential risk in property, plans to alter the regulations regarding Loan-to-Value for mortgages, helping to prevent the ballooning of non-performing loans going forward.

Apart from loan growth outlook, recent interest rate hikes have also resulted in higher bond yields. This drop in bond values translates to potential losses on the value of marketable securities within banks’ earnings assets portfolio, as bonds that fall under trading and available-for-sale categories must be recorded after taking into account value differentials against their profitability and equity. Note that 10-year government bond yields have increased 270 bps since end 2012 to reach 7.8 percent, bringing down bond pricing by around 18 percent.

Hence, banks’ future profitability will depend on the ability of banks to depend on several issues: 1) liquidity management as banks’ industry average Loan-to-Deposit Ratio reaches 87 percent, 2) ability to pass on incremental funding costs to debtors without affecting loan quality and 3) careful expansion plans ahead to keep operating cost at bay.

Although the industry’s gross non performing loans (NPL) indicated a historical low level of around 1.9 percent (excluding channeling), loans that fall under the special mentioned category are on an uptrend.

On a more positive note, the overall outlook for Indonesia’s banking sector remains promising, supporting GDP growth at 6-7 percent. At this stage of the cycle, the sector has in fact turned out to be more prudent and responsive, providing positive sentiment compared to historical performance.

However, slowdown in banks’ earnings appears inevitable, growing at an average of 12-13 percent versus our earlier estimates of 17-18 percent. That said, we believe that the industry will continue to move in line with market performance (year-to-date: 2.1 percent market outperformance).

Among the listed banks on the Indonesian Stock Exchange, we prefer investors to remain invested in the safety of banks with a strong deposit franchise and sound-quality assets, providing a shield against downturn in macro-economic outlook.

p14-bitab2.img_assist_custom-512x543.jpg


p14-bitab2.img_assist_custom-512x543.jpg



The writer is associate director/deputy head of research at PT Bahana Securities

Toyota to spend Rp 2.3
trillion on new engine
plant



The Jakarta Post, Jakarta | Business | Thu, July 25 2013, 11:38 AM

Toyota Motor Company (TMC), the world’s top selling automotive manufacturer, announced on Wednesday that it would spend another Rp 2.3 trillion (US$230 million) on constructing a new engine plant in Karawang, West Java.

The new plant will be built by the company’s subsidiary PT Toyota Motor Manufacturing Indonesia (TMMIN) on a 150-hectare plot located near the company’s existing plant in Karawang. The plant will have a production capacity of 216,000 units a year, the company said in a statement.

The new plant will produce engines for cars other than the Innovative International Multi-purpose Vehicle (IMV) series including Hilux, Kijang Innova and Fortuner, which are already produced in Toyota’s plants in Sunter, Jakarta and Karawang. Operations are slated for the first semester of 2016. About 50 percent of the total production will be exported.

At present, Toyota produces 195,000 car engines a year for IMV series at the company’s plant in Sunter, North Jakarta.

Indonesia is the second largest production base for Toyota, after Thailand, which is still Southeast Asia’s biggest automobile market, with an annual production capacity of over 600,000 vehicles.

In its plans to develop Indonesia as an export base, in March this year Toyota started the operations of its Rp 3.3 trillion auto plant in Karawang, which has a production capacity of 70,000 units per year, boosting overall car capacity production to 180,000 units.

Toyota aims to reach an output of 250,000 units per year by 2014. In its initial phase the plant will make Toyota’s Etios Valco, and plans to increase production capacity to 120,000 units per year in 2014.

Toyota currently exports vehicles, engines and other components from Indonesia to countries in Asia, the Middle East and South America.

The industry’s sales expectation this year is lower than last year partly due to new government policies, including the increase in the lending rate and the rise in the minimum down-payment for car purchases.

Auto sales in Indonesia, Southeast Asia’s largest economy, reached 1.12 million units last year, up 24.83 percent from 2011, higher growth than other Asian countries, including China, India and Thailand.

Between January-June, car sales expanded by 12.46 percent to 601,952, slightly exceeding previous market expectations, an industry report by the Indonesian Automotive Industry Association (Gaikindo) said.

The sales target this year is expected to rise 10 percent to 1.2 million units while the increase in 2012 was 24.8 percent.

Gaikindo deputy chairman Johnny Darmawan said recently that sales might slow down in the second half of the year due to the fuel price hike and higher lending rates following Bank Indonesia’s move to increase its benchmark rates.

These factors, he said, will affect consumer purchasing power and possibly hurt sales, adding that sales might only reach 500,000 units, bringing whole-year sales to around 1.1 million units.

Honda, Toyota’s closest competitor, has a new Honda car factory in Mitrakarawang Industrial Estate, Karawang, in the pipeline. The plant is scheduled to operate in the first quarter of 2014, with a capacity of 120,000 units per year.

Honda Prospect Motor, a joint venture between Japan’s Honda Motor Co and Indonesia’s Prospect Motor, invested Rp 3.1 trillion in the construction of a new auto plant in Indonesia, tripling its current production capacity. (asw)

http://www.thejakartapost.com/news/2013/07/25/toyota-spend-rp-23-trillion-new-engine-plant.html
 
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Toyota plans Rp 13t investment
in RI


Linda Yulisman, The Jakarta Post, Jakarta | Business | Mon, November 12 2012, 10:09 AM

Japan’s top automaker Toyota Motor Corporation (TMC) has re-affirmed its commitment to Indonesia, saying it will invest up to Rp 13 trillion (US$1.35 billion) in the next five years for a number of expansion activities in Southeast Asia’s largest automobile market.

The largest amount of the investment will be used to more than double its production capacity and build a new engine factory to meet the fast-surging vehicle demand in the country of 240 million inhabitants. The sizeable investment will be spent to enhance the capacity of its first Karawang plant in West Java, to 130,000 units per year beginning September next year, from the present 110,000.

Toyota will also upgrade the capacity of its second Karawang plant, which is currently under construction, to 120,000 units by early 2014 from 70,000 units upon initial operations by March next year.

The two plants, to be operated by Toyota Motor Manufacturing Indonesia (TMMIN), its joint venture with Indonesia’s Astra International, will have a combined production capacity of 250,000 units by early 2014, the firm said in a statement. It means Toyota will double the capacity from the current 110,000 to 250,000 by 2014.

In line with the higher capacity, it will also increase its employment to around 41,000 workers in 2015 from roughly 32,000 workers at present, it said.

TMC president Akio Toyoda said on Saturday that this additional investment reaffirmed the group’s commitment to Indonesia’s prospective automotive industry.

“We’re glad to see the response from the Indonesian people and the government toward the achievement of Toyota in the past 40 years,” he said during a press conference in Jakarta.

Earlier in the day, Toyoda, who came along with executives of TMC and its related companies, met President Susilo Bambang Yudhoyono, who requested the firm’s support for the government’s move to develop low-cost and eco-friendly vehicles.

The multi-year investment of Rp 13 trillion planned by Toyota will also cover, among others, the expansion of Toyota Auto Body Corporation Ltd, which aims to create new models of vehicles for the Indonesian market, and Denso Corporation, which will build its third factory in Bekasi, West Java, to make high-technology components such as engine control units for local sales as well as exports, according to the firm’s statement.

Johnny Darmawan, TMMIN vice president and president director of Toyota Astra Motor (TAM), which tackles distribution and after-sale service for TMMIN cars, said that Toyota was currently finalizing the purchase of land totaling 150 hectares in Karawang, where a new engine factory was planned.

Apart from the Rp 13 trillion investment that had been approved, Toyota would likely pour another Rp 13 trillion to anticipate the fast-expanding automarket in Indonesia until 2020, Johnny said, but declined to elaborate details.

“The planned investment of Rp 13 trillion, and the Rp 13 trillion that will be soon realized, will be equal to Toyota’s overall investment for 40 years,” he told The Jakarta Post over the phone.

Toyota plans Rp 13t investment in RI | The Jakarta Post

Bosch to invest more than
10 million euro in Indonesia


The Jakarta Post, Jakarta | Business | Thu, June 27 2013, 5:06 PM

Bosch, a global supplier of technology and services, has announced its plan to invest more than 10 million euro to establish its first manufacturing facility in Indonesia.

Scheduled to commence production by 2014, the facility located in the greater Jakarta area will initially manufacture automotive products mainly for Japanese automotive manufacturers located in
Indonesia.

The firm plans to employ over 120 staff in the next three years.

“The planned production facility will be a much-anticipated milestone for our operations in Indonesia, and for the expansion of our footprint in Southeast Asia,” president of Bosch in Southeast Asia Martin Hayes
said in a press release on Thursday.

“Southeast Asia is the fastest-growing region for Bosch, and expanding our manufacturing capabilities in this region underscores the growth potential that we see in this part of the world.”

Bosch estimates that by 2016, the total production volume by Japanese carmakers in emerging economies will surpass production volume in developed countries, with the highest growth occurring in Southeast Asia.

http://www.thejakartapost.com/news/2013/06/27/bosch-invest-more-10-million-euro-indonesia.html

Astratel eyes power plants,
new plantations


Raras Cahyafitri and Tassia Sipahutar, The Jakarta Post, Jakarta | Business | Thu, July 25 2013, 11:36 AM

Conglomerate PT Astra International (ASII) subsidiaries, PT Astratel Nusantara and Jakarta listed PT Astra Agro Lestari (AALI), are preparing to expand their businesses by bidding for new projects and assessing acquisition possibilities.

At the moment, Astratel was expecting to complete agreements on joint ventures with European companies to bid for power plant projects, Astra International chief group treasury and investor relations officer Iwan Hadiantoro said on Wednesday.

“We are looking at a hydropower plant project in Sulawesi and a coal-fired power plant project in Kalimantan. Each of the power plants will have a capacity of 150 megawatts,” Iwan said.

“The hydropower plant project will cost roughly US$250 million while the coal-fired power plant will need around $200 million,” he added.

As a 100 percent owned subsidiary, Astratel is currently Astra’s arm on infrastructure and its related business. Earlier in January, Astratel along with fellow subsidiary PT Intertel Nusaperdana acquired a 100 percent stake in PT Pelabuhan Penajam Banua Taka, which runs a port operation business in East Kalimantan. Astratel also operates in toll roads.

In 2011, Astratel acquired a 95 percent stake in PT Marga Hanurata Intrinsic (MHI), which holds a license to develop a 40.5-kilometer highway connecting Kertosono and Mojokerto in East Java.

The toll road development requires Rp 3.5 trillion (US$339 million) in total investment.

“The toll road construction has reached about 70 percent and land clearance about 80 percent. We hope to complete the toll road later this year and have it in operation next year,” Iwan said.

Meanwhile, Astra’s subsidiary in the crude palm oil (CPO) business, Astra Agro, has expanded by acquiring a plantation area in the first half of the year, Astra Agro head of investor relations, Rudy Lumardjo, said.

He, however, declined to reveal the size of the land.

“When looking for a new land, we prioritize areas close to one of our existing plantations. If it is far [from existing plantations], the size must be big enough for us to see the economic value, which is about 5,000 hectares, so we can build a factory with a processing capacity of 20 tons of fresh palm fruit per hour,” Rudy said.

Rudy added that the company’s expansion team was assessing opportunities for acquisitions, including a plantation area owned by PT Bakrie Sumatera Plantations (UNSP).

“We see all offerings and evaluate them. If the price is a match, we can consider them,” Rudy said, adding that Astra Agro, which is 79.68 percent owned by Astra International, expects to see a 5 to 10 percent increase in CPO production this year.

Meanwhile, Bakrie Sumatera is in the process of selling the assets of six subsidiaries, which are PT Jambi Agrowijaya, PT Eramitra Agrolestari, PT Trimitra Sumberperkasa, PT Multrada Multi Maju, PT Padang Bolak Jaya and PT Perjapin Prima, according to its financial report.

The companies signed sales agreements with third parties on Dec. 18, 2012, but have yet to close the deals. Bakrie Sumatra’s financial report for the first quarter also showed that the subsidiaries had received payment of $29.61 million for the assets.

http://www.thejakartapost.com/news/2013/07/25/astratel-eyes-power-plants-new-plantations.html
 
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Govt to seize ‘neglected’
land from plantations

Anggi M. Lubis, The Jakarta Post, Jakarta | Business | Fri, May 10 2013, 1:43 PM

Plantation companies will have to relinquish any land that has not been cultivated within three years of the company obtaining the land-use permits (HGUs) from the government, a senior official at the Agriculture Ministry has said.

The Agriculture Ministry’s director general for plantations Gamal Nasir said in Jakarta on Wednesday that the government would have the right to seize sites if the plantation companies had not cultivated them within three years of the issuance of the HGU permits.

He said that seizure of the undeveloped land would be part of the revision of the 2007 regulation, which limits the total plantation area a company can own to 100,000 hectares to forestall land monopolies.

The content of the revision had been agreed by the Presidential Work Unit on Monitoring and Controlling of Development (UKP4) and would be signed by the President by the end of this month at the latest, Ministry Suswono said.

Existing companies who already owned more than 100,000 hectares would not be affected by the revision, but Gamal said if they neglected their land they could lose their HGU permits. The HGU permit issued for the commercial use of land is valid for 25 years and is extendable for up to 25 years.

Gamal said the government would evaluate the use of the land concessions regularly to ensure that the holders did not neglect
them. “We will issue a warning to those who are found to be not using their land optimally,” he told The Jakarta Post over the phone on Thursday. “We will take over the land if they don’t heed the warning,” he added.

Gamal said that the government had to take such action given that many companies — including those that owned more than 100,000 hectares of land — had yet to optimize planting on their allotted sites.

The regulation will likely affect many plantation companies operating in the palm oil, rubber and cocoa sectors — of which the country is the world’s largest, second and third largest supplier respectively.

Data from the Agriculture Ministry and Central Statistics Agency shows that Indonesia has 9.07 million hectares of oil palm plantation, with 59.58 percent or 5.41 million hectares already planted.

The data also shows that the country currently has a total of 3.48 million hectares of rubber plantation and a total of 1.73 million hectares of cocoa plantation. Only 15.06 percent, or 525,600 hectares, of total rubber plantation area and 5 percent, or 92,100 hectares, of total cocoa plantation are planted.

Indonesian Palm Oil Association (GAPKI) executive director Fadhil Hasan explained that the uncultivated areas in the data might be areas that had been planted but yet to yield output, as oil palm trees needed around four years before being ready to harvest.

He, however, said that even if there were unplanted areas, the government had first to confirm why the plots of lands were left vacant before seizing them.

“There are various reasons why a plantation company might not have fully cultivated its land. It might, for example, still be in the planning stage,” Fadhil told the Post.

He added that some companies might have left the areas unplanted to conserve forest or they might still be negotiating with residents on the release of the land. The association has recently criticized the regulation warning that it could affect the expansion plans of a number of major oil palm plantation companies.

Among the palm oil companies with more than 100,000 hectares of plantation are Sinar Mas Group (320,463 hectares), Singapore-based Wilmar International Ltd. (210,000 hectares), PT Astra Agro Lestari (192,372 hectares), PT London Sumatra (245,629 hectares) and Raja Garuda Mas (259,075 hectares).

Govt to seize

Anggi M. Lubis, M for Maria? i think she was my old friend in university if this true

TOM FORD to open in Singapore,
Indonesia


Associated Press, Singapore | Business | Wed, July 24 2013, 11:05 PM

Tom Ford brings his vision of modern luxury to Singapore with the opening of the new TOM FORD store at the Marina Bay Sands in January 2014, followed by a flagship store in Jakarta, Indonesia in 2015.

Modeled after the brand’s Madison Avenue flagship store in New York, the Singapore boutique will carry the complete range of men’s and women’s ready-to- wear and accessories, eyewear, fragrance, beauty and fine jewellery.

The Singapore store opening is part of a newly formed partnership with F J Benjamin, Singapore’s leading lifestyle and fashion company. F J Benjamin will open the Indonesian flagship store in Jakarta’s luxury mall, Plaza Indonesia, in the second half of 2015.

“The Singapore opening is very significant because there is a very sophisticated client who wants the finest accessories and clothing for all aspects of their life, and they want it presented in a modern way that resonates with the new world that is fast emerging in Asia,” Tom Ford said in an official release.

The Singapore store will invite clients to experience the complete world of TOM FORD. The elegant and private environment, beautifully outfitted in the signature TOM FORD palette of greys and deep browns with chrome and glass accents, surrounds the visitor in an atmosphere of exclusivity and refined comfort.

The Marina Bay store will introduce the Private Blend Atelier D’orient Collection, a new quartet of TOM FORD fragrances inspired by the sublime beauty and exquisite luxury of Asia. This prestigious fragrance offering is Tom Ford’s newest innovation from his Private Blend Collection of artisanal scents.

“This is a major development for the F J Benjamin Group. Tom Ford is one of the most celebrated fashion designers today, and his dedication to aesthetics comes through in all his designs. We look forward to fulfilling the expectations and demands of Tom Ford’s ardent fans in the region.” F J Benjamin Group Chief Executive Officer Nash Benjamin said.

http://www.thejakartapost.com/news/2013/07/24/tom-ford-open-singapore-indonesia.html

I think we need this kind of things rather than Wahhabi style
 
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Consumer confidence in
Indonesia stable


The Jakarta Post, Jakarta | Business | Wed, July 24 2013, 4:20 PM

Indonesian consumers have been, once again, included in a list of countries with a high consumer confidence level.

Obtaining a score of 81 index points, Indonesia is among five countries with the highest consumer confidence level in the Asia Pacific. Other emerging countries included India, China, the Philippines and Myanmar, according to the latest MasterCard IndexTM of Consumer Confidence.

This survey shows that Indonesian consumer confidence is still categorized among the countries with a high consumer confidence level, despite a slight decline from the previous consumer confidence survey.

According to the index, Indonesian consumer confidence has only declined by 6.5 index points, from 87.5.

From a survey conducted in second semester in 2012, Indonesia recorded the biggest jump in consumer confidence in the Asia Pacific region, increasing by 30.1 index points year on year, from 57.4.

According to the survey, economic level, employment prospects, the local stock market, regular income prospects and quality of life are still rated highly optimistic.

Meanwhile, the other three indicators; regular income, local stock market and the quality of life dropped slightly in the first semester.

Regular income declined by 3.5 index points to 92.5 index points, whereas the local stock market declined by 6.7 index points to 74.7 index points and quality of life declined by 9.6 index points to 78.9 index points.

“Consumer confidence is a good signal for businesses and this also results from stable economic growth, which ranges around six percent every year. After experienced a

significant increase in consumer confidence level in the second half of 2012, Indonesians continue to be optimistic with a high consumer confidence levels for the next six months.” MasterCard Indonesia Irni Palar said in an official release.

Indonesia’s latest results from MasterCard Worldwide Index of Consumer Confidence which reached 81 index points is the second highest recorded level for the country since the survey was first conducted.

In the second semester of 2012, consumer confidence in Indonesia has successfully gained the highest score in the last five years with 87.5 index points. Meanwhile, the lowest consumer confidence level was recorded in 2007, when consumer confidence reached 36.7 index points.

Consumer confidence in Indonesia stable | The Jakarta Post

Indonesian middle class
most optimistic in the
world: Nielsen


The Jakarta Post, Jakarta | Business | Wed, July 24 2013, 4:05 PM

Nielsen Indonesia on Wednesday said the Indonesian middle class topped the global consumer index in the second quarter of 2013, making them the most optimistic group in the world.

Catherine Eddy, Nielsen Indonesia managing director, said Indonesia topped the Nielsen Global Survey of Consumer Confidence and Spending Intentions index with 124 points — the country's highest level since 2009 — followed by the Philippines with 121 points and India with 118 points.

"The average global consumer index is 94 points. In Asia Pacific it is 105 points," she said at her office in Jakarta as quoted by kontan.co.id.

According to Catherine, the index is based on consumer confidence indicators, such as local employment prospects, consumerism and personal finance. In Indonesia the index level was boosted by consumer credence in facing the 2014 presidential election.

"If we take a look at previous data, the index usually went up between six to 12 months before the elections," she said.

Catherine said the research was conducted between May 13 and 31, via an online survey that had 29,000 respondents in 58 countries.

"We select the respondents randomly. There were 500 people surveyed in Indonesia," she said. (fan)

http://www.thejakartapost.com/news/2013/07/24/indonesian-middle-class-most-optimistic-world-nielsen.html

Indonesia becoming core
Japanese investment destination


The Jakarta Post, Jakarta | Business | Tue, July 23 2013, 10:18 PM

Institute for Development of Economics and Finance (INDEF) economist Enny Sri Hartati said Tuesday that Indonesia is now becoming an attractive investment destination for Japan.

"It is because they are in stiff competition with China. They have to become more aggressive in finding new investment destination places," she said in Jakarta as quoted by Tempo.co.

According to Enny, to date, Japan is putting more money to Foreign Direct Investment which is benefiting Indonesia, even though, the Japanese economic has weakened.

"That is due to our long-term partnership with Japan," she said.

The government, she added, had to immediately improve its economic policies to unleash investment flow.

"They also need to make sure policies aren't going to change near election times," she said, referring to the 2014 presidential election.

Investment Coordinating Board data indicates that Japan has dominated foreign direct investment so far this year.

They contributed US$2.3 billion (Rp23.23 trillion) or 17.39 percent of the total foreign direct investment of Rp 132.2 trillion in the first six-month of 2013.

Japanese investment is up 16.2 percent from the same period last year. (fan)

http://www.thejakartapost.com/news/2013/07/23/indonesia-becoming-core-japanese-investment-destination.html
 
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Govt mulls special banks
to finance industry


Linda Yulisman, The Jakarta Post, Jakarta | Business | Tue, July 23 2013, 9:41 PM

The government is deliberating establishing a financing institution that channels special credits to local firms in a bid to spur industrial growth in the country.

Industry Ministry secretary-general Ansari Bukhari said on Tuesday in Jakarta that the banks would be necessary to accelerate the growth of domestic industry.

“This is one of the incentives that the government can provide for the industry. Presently, our industry cannot expand by more than 10 percent due to the absence of such special banks catering to the needs of the industry,” he said.

The proposal for the banks to finance industry needs has been designated in the industry bill currently under deliberation at the House of Representatives.

Indonesia's industry has begun to recover in past years after a collapse following a financial crisis at the end of the 1990s, going up beyond 6 percent in the first half of this year.

Between 1990 and 1996 before the crisis, the domestic manufacturing industry enjoyed its heyday, expanding by 12 percent each year and contributing one-third of the country's gross domestic product (GDP), partly supported by state-owned Bank Pembangunan Indonesia (Bapindo).

Govt mulls special banks to finance industry | The Jakarta Post

Imported cattle to have
onboard inspections


Anggi M. Lubis, The Jakarta Post, Jakarta | Business | Tue, July 23 2013, 12:00 PM

Part of the additional live cattle the government has pledged to import to meet domestic needs in the second half of 2013 will be shipped today (Tuesday) from Darwin, Australia, an official has said.

The Agriculture Ministry’s quarantine agency chief Banun Harpini said if things went according to plan, 1,600 heads of live cattle would be transported by sea freight on Tuesday evening.

A team of veterinarians deployed by the agency would inspect the cattle for pre-shipment quarantine. The veterinarians would also accompany the cattle onboard, according to Banun.

“Other necessary quarantine procedures will be performed onboard the ship. By doing pre-shipment inspections we hope the cattle can go straight to the slaughterhouse and not undergo further quarantine in Indonesia,” Banun told reporters on Monday.

Such a measure was taken to ensure additional imported cattle could quickly enter the market, she said. “The next scheduled shipment will be on Aug. 5,” she said.

The 1,600 heads of live cattle – with a live weight between 500 to 550 kilograms each — is part of the additional 25,000 ready-to-slaughter live cattle that the government has pledged to bring in to cope with rising demands and to curb skyrocketing prices.

The government has allocated an 80,000 ton quota for beef import this year, including 267,000 heads of live cattle that must be fattened in feedlots for around three months.

The government, however, has scrapped import quotas for prime cuts and granted the State Logistic Agency (Bulog) a permit to import an additional 3,000 tons of beef to anticipate rising prices, just like in Ramadhan and Idul Fitri last year when rising demands and declining stock saw prices reach around Rp 80,000 a kilogram.

This move is expected to deflate prices at around Rp 75,000 a kilogram.

The price of beef, however, keeps rising during this year’s Islamic festivities, reaching around Rp 93,000 a kilogram, while several areas in Jakarta see beef marketed at around Rp 120,000 a kilogram.

The government decided last week to remove import quotas for beef and live cattle to stabilize domestic prices and curtail inflation, to bring in 25,000 heads of live cattle to help meet rising needs for the rest of the year, and to grant the Trade Ministry the right to set a beef import quota due to red tape.

Previously, the import was made after a recommendation from the Agriculture Ministry.

Meat Producers and Feedlot Association (Apfindo) executive director Joni Liano said currently only one company had secured a permit to import the additional cattle, with another 10 companies awaiting approval.

Joni said the company granted an import permit was expected to bring in 6,500 heads of live cattle.

He said the biggest obstacle to bringing in the cattle was finding ships to transport the cattle from Australia.

“According to reports from our members, there are only a few ships to carry the cattle. The ships are scheduled to sail on July 24 and 26,” he said.

http://www.thejakartapost.com/news/2013/07/23/imported-cattle-have-onboard-inspections.html

Holcim sustains sales on
APEC construction projects


The Jakarta Post, Jakarta | Business | Tue, July 23 2013, 11:53 AM

Cement producer PT Holcim Indonesia has been boosted by construction growth in Bali, where the Asia Pacific Economic Cooperation (APEC) conference will be held later this year.

With only one franchise in Bali, the company sold 14,000 tons a month, a 15 percent rise from the previous year, says Holcim vice president Juhans Suryantan.

“Nationally, this year’s cement sales growth has tended to slow down but we have been able to take advantage of construction growth in Bali,” he said on Saturday as quoted by Antara news agency.

He said the company would continue to take the opportunity offered by hotel development growth ahead of the APEC conference.

“Even sales growth in Bali this year is far above other regions. More infrastructure development projects have been carried out ahead of the APEC summit,” Juhans said.

He said Holcim’s sales nationally grew by 7.5 percent, or 4.01 million tons, in the first semester of 2013 compared to the same period last year.

“Next year we are predicting the growth will not be as good as this year, because the infrastructure projects will all have finished,” he said.

Figures from the Indonesian Cement Association (ASI) showed that the national cement sales volume reached 27.83 million tons from January to June, a 7.5 percent increase from the 25.89 million tons in the same period last year.

The increase was smaller than the 15 percent surge in January to June 2012 from the same period in 2011.

A trend of slowing domestic cement sales is likely to continue over the next six months due to a decline in infrastructure development.

Reasons for slower national growth include fewer infrastructure projects in the first half of the year, plunging commodity prices that have affected development in resource-rich provinces and more frequent rain, ASI chairman Widodo Santoso said recently.

Until now, Holcim’s national market share is around 15 percent, according to figures from ASI.

In Indonesia, Holcim operates two cement plants in Narogong, West Java, and Cilacap, Central Java, with a total production capacity reaching 9.1 million tons a year.

Holcim Indonesia’s shares are mostly controlled by Netherlands-based Holderfin BV, with 5 percent of shares owned by the public.

Holcim Indonesia’s shares, traded under the code SMCB at the Indonesia Stock Exchange (IDX), traded at Rp 2,700 apiece on Monday, unchanged from the previous closing. (asw)

http://www.thejakartapost.com/news/2013/07/23/holcim-sustains-sales-apec-construction-projects.html
 
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Antam, DNi work on nickel
processing plants


Raras Cahyafitri, The Jakarta Post, Jakarta | Business | Tue, July 23 2013, 11:52 AM

Jakarta-listed diversified miner PT Aneka Tambang (Antam) and Australian Direct Nickel Pty Ltd (DNi) have agreed to continue their cooperation on the construction of nickel laterite processing plants.

Under the deal signed on Monday – which is a follow-up to an agreement in May 2012 – Antam and DNi will continue cooperation for a test-plant project in Perth, Australia.

The two companies will progress on a definitive agreement to develop the first nickel laterite processing plant in Indonesia pending the outcome of the test-plant project.

“The size of the first plant is something yet to talk about. But my guess is it will be somewhere between 10,000 to 5,000 tons in production per annum. We’re not looking at billions of dollars of capital expenditure [...] it will still be probably US$400 million to $500 million,” DNi chief executive officer Russell Debney told reporters here on Monday.

Antam agreed last year to send 200 tons of laterite nickel to DNi to be used for a test plant in Perth. In a statement released last Friday, DNi announced that its test plant had produced the first marketable nickel cobalt concentrate in the form of a mixed hydroxide product (MHP).

The company is working on the second stage of the test plant, which is expected to be completed in November. Following the completion of the test-plant project, a joint venture with Antam would be established and a feasibility study would be performed next year, according to Eko Taufik Wibowo, a director with DNi’s unit PT Direct Nickel.

“Construction is expected to start in 2015 and commercial operations in 2017,” Eko said.

The nickel laterite processing plant will produce nickel cobalt along with its derivatives, which are the main products for the stainless steel industry.

DNi and Antam have not decided where the processing plant will be located. “Monday’s agreement is for research cooperation. The material needed is low-grade nickel, which is located in Pulau Gag [West Papua] and in East Halmahera. However, we haven’t discussed the location,” Antam corporate secretary Tri Hartono said.

According to Tri, Antam’s total nickel resources and reserves amount to 825 million wet tons as of the end of 2012. Most of the reserves are low-grade nickel, he said. The planned processing plant development is part of Antam’s move to process raw material in the country, in anticipation of the ban on raw material exports starting on Jan. 1, 2014.

Antam finance director Djaja Tambunan has said that the company was focusing on three projects. The projects are the expansion of the Pomalaa ferronickel plant in Southeast Sulawesi, the East Halmahera FeNi project in North Maluku and Tayan Chemical Grade Alumina (CGA) in West Kalimantan.

“We have been told the export credit agency of Finland and Denmark will support the East Halmahera FeNi project. The Finnish agency will likely support the power plant [at the East Halmahera project] while the Danish agency will support the smelter,” Djaja said.

Antam, which is 65 percent owned by the government, has set aside Rp 5.3 trillion (US$526 million) in capital expenditure this year for all of its development projects. Djaja said the company had spent 34 percent of the total allocation, or around Rp 1.8 trillion, in the first six months of the year.

According to Djaja, Antam will likely cut its expenditure spending this year as the company will have to maintain its cash flow amid declining nickel prices.

Mining companies have been suffering from plunging commodity prices since last year on the back of a weak global economy.

Antam, DNi work on nickel processing plants | The Jakarta Post

Hutama Karya to focus on
highways


The Jakarta Post, Jakarta | Business | Mon, July 22 2013, 7:48 PM

The State-Owned Enterprises Ministry will change the status of state construction company PT Hutama Karya as a highway management company to enable it to carry out the planned Trans-Sumatra toll road project.

"Hutama Karya’s focus will be as a highway company. The process of the status change is being handled by the ministry and it will not be too difficult as it will deal only with the change in the notary issue. So in August 2013 it [the process] will be completed," State-Owned Enterprises Minister Dahlan Iskan said in Jakarta on Monday as quoted by Antara news agency.

Hutama Karya has been assigned by the government to be in charge of building the Trans-Sumatra toll road project, spanning 2,700 kilometers linking Bandar Lampung in the south to Banda Aceh in the north under a Presidential Decree.

However, the issuance of the decree has been hindered by a regulation that requires the status of Hutama Karya to be changed into a company specializing in managing toll roads.

Dahlan said after becoming a highway company, Hutama Karya could acquire two other state-owned enterprises, including the Istaka Karya company.

Hutama Karya could develop large-scale projects through Istaka Karya or other subsidiaries, he added. (apt)

http://www.thejakartapost.com/news/2013/07/22/hutama-karya-focus-highways.html

Honda gears up for lucrative
MPV market


The Jakarta Post, Jakarta | Business | Mon, July 22 2013, 11:58 AM

After achieving success with its Honda Jazz in the hatchback market, the Indonesian unit of Japan’s Honda Motor is currently preparing a new model to enter the low multi-purpose vehicle (LMPV) market, the largest but also tightest car market segment in the country.

Jonfis Fandy, the marketing and after-sales service director of Honda Prospect Motor, Honda’s joint venture in Indonesia, said that the LMPV car was specifically designed for the Indonesian market.

“We have done the research beforehand to figure out what the consumers need,” said Jonfis on Thursday during the presentation of the car’s sketch.

The new car will have a 1,500cc capacity engine with seven seats. The price for the car has not yet been specified, but “it is under Rp 200 million [US$19,800] for sure”, he said.

Honda will showcase the prototype of the new LMPV at the Indonesia International Motor Show 2013 next September. Production will start next year at the new Honda factory in Karawang, West Java, he added. The new plant is scheduled to operate in the first quarter of 2014, with a capacity of 120,000 units per year.

Jonfis said that the LMPV car would use 80 percent local components, while the other 20 percent would come from Japan and Thailand.

Honda is leading the market in the sedan segment, with Honda City and Honda Civic sales dominating more than 60 percent of market share. Besides the two sedans, Honda’s growth is also driven by its hatchback Honda Jazz. In the first semester of 2013, Jazz contributed the most sales with 16,056 cars being sold or about 41 percent of the country’s hatchback car market. In June alone, about 2,510 were sold.

Jonfis said that Honda targeted the sale of 100,000 cars this year, an increase of 30,000 cars from the sales recorded last year. In the first semester, this year, total sales already reached 49,342 cars, a 109 percent increase from the same period, last year.

Jonfis said the company decided to enter the LMPV market because it was the largest and most lucrative market segment. More than 70 percent of passenger cars sold in the country are LMPV cars with prices below Rp 200 million, he added.

In 2012, the sales in this market segment reached 342,000 cars.

“This year we predict it will reach between 380,000 and 400,000 cars. Next year it could be more than that,” said Jonfis. In the new market, Honda will not only compete with market leaders Toyota Avanza and Daihatsu Xenia, but also several new comers, which have promised to be more affordable, as well as being more comfortable and safe.

In May PT Mazda Motor Indonesia (MMI) introduced Mazda VX-1, which was similar to Suzuki Ertiga in terms of engine, capacity and body. The price for this car ranges between Rp 178 million to Rp 191 million.

In April, General Motors’ Chevrolet launched its 7-seater MPV named Spin with a starting price of Rp 139.7 million.

Chevrolet Spin, which was designed for Southeast Asia and South Africa, comes in three types of engines, gasoline-based 1,200cc and 1,500cc, also 1,300cc diesel engine.

Japan-based automaker PT Nissan Motor Indonesia also launched Nissan Evalia, which is set to cost Rp 145 million and Rp 185 million in June 2012. Similar to most LMPV cars, Evalia also uses 1,500cc engines.

The Indonesian car producers association (Gaikindo) estimates total car sales will reach between 1 million to 1.05 million cars this year, down from1.12 million sales in 2012. (nai)

http://www.thejakartapost.com/news/2013/07/22/honda-gears-lucrative-mpv-market.html
 
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