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Indonesia Economy Forum

Economy in brief: Braun
to invest $100m in RI factory


The Jakarta Post | Business | Mon, July 22 2013, 11:54 AM

JAKARTA: Germany-based pharmaceutical company PT B. Braun Medical Indonesia will spend US$100 million to build a factory that will produce infusion and injection liquids in Cikampek, Karawang regency, West Java, to fulfill the needs of infusion in Indonesia and Asia-Pacific.

The company’s president director Manogaran said on Friday that for the first phase, B. Braun would spend $70 million to build the factory on 4 hectare site within 19 hectares of land at Indotaisei Industrial Estate.

The factory, he added, would produce 75 million bottles of infusion and medication for injections per year for the first phase. He said that about 50 million out of 75 million would be for the domestic market and the other 25 would be exported.

In the second phase, the company will build new production facilities with a capacity of 75 million bottles raising the total production capacity to 150 million bottles. The production from the second phase will be exported to Europe, Japan and Australia.

He added that the factory, which is scheduled to begin operating in 2015, would import the raw material, as it was not available in Indonesia.

PT B. Braun Medical Indonesia is a subsidiary of B. Braun Melsungen AG. It produces hospital care products, surgical instruments and out-patient care products, like blood glucose test kits and ear thermometer.

Economy in brief: Braun to invest $100m in RI factory | The Jakarta Post

APLN eyes Rp 50 trillion
flagship project in Java
Sea


The Jakarta Post | Business | Mon, July 22 2013, 11:43 AM

Publicly listed developer PT Agung Podomoro Land (APLN) is planning to develop mini cities worth billions of dollars on reclaimed land in northern Jakarta.

President director Trihatma Kusuma Haliman said the company had obtained the principal permit for the project — Pluit City — and was currently assessing the environmental impact of the project.

“We will apply for a reclamation permit once the assessment is completed,” Trihatma told The Jakarta Post in an interview last Friday.

“We hope to start the project soon.”

APLN intends to create three islands in the Java Sea waters and connect each with bridges and a highway to mainland Jakarta.

Thousands of houses, apartment units and other supporting facilities will be built on the three islands, which will be able to host around 700,000 people, according to Trihatma.

APLN will also develop dikes and brick walls to protect Jakarta’s mainland from the sea as well as preserve the mangrove forests, according to Trihatma.

The revitalization of a fishing kampong in Muara Angke may also be undertaken.

“The total investment for the three islands may reach Rp 50 trillion [US$4.95 billion],” Trihatma said.

“The project may take 10 years for development.”

Given the amount of investment and the project’s length, APLN will need to allocate at least Rp 5 trillion every year.

Trihatma said that as a listed public company, APLN would face no significant problems in raising the funds for the project.

APLN recently sold Rp 1.2 trillion in debt papers — the first part of its Rp 2.5 trillion continuous bonds issuances.

APLN shares were traded at Rp 345 apiece on Friday, unchanged from the previous closing.

The company reaped Rp 272 billion in net profit in the first quarter of the year, a slight 3 percent increase from the same period last year.

Its cash and cash equivalent stood at Rp 2.6 trillion as of the end of March.

“This will be APLN’s flagship project. In Jakarta’s [mainland] we can only develop a complex rather than a complete zone,” Trihatma said.

“On this reclamation area, we can develop what we want perfectly based on our own concept,” he said, adding the company had covered swamps in Sunter, North Jakarta, for the project and would now cover the sea.

Green Lake, another of the company’s projects, is a superblock development on 4 hectares of land in Sunter.

APLN is also now developing a superblock called Green Bay Pluit on a 12-hectare site on the North Jakarta coastline that will be close to the Pluit City project.

APLN’s Pluit City project is part of the Jakarta administration’s plan to develop the northern territory as the mainland area is close to residential saturation.

Jakarta — the country’s 740-square-kilometer capital city — is currently home to more than 10 million people.

The administration is planning to reclaim more land and create 17 new islands.

The creation of the landfill islands was first proposed by former Jakarta governor Fauzi Bowo as the first step in building a Rp 280 trillion giant sea wall.

A number of developers are reportedly seeking to take part in the reclamation project.

The reclamation project has drawn criticism from environmental activists and experts who argue it will damage sea resources and hamper the flow of water from rivers running through the capital, which in turn will make the annual Jakarta flooding even worse.

http://www.thejakartapost.com/news/2013/07/22/apln-eyes-rp-50-trillion-flagship-project-java-sea.html

Premium electronics enjoy
steady growth


The Jakarta Post | Business | Mon, July 22 2013, 11:38 AM

Electronics manufacturers are all excited about the market response to their premium products as more wealthy individuals choose to buy high-priced refrigerators and televisions for their homes.

The premium home electronics segment is estimated to grow 40 percent annually, according to Andi Irawan, LG Electronics Indonesia branch manager for hyper channel.

“We see big potential in this premium segment given that consumers in Indonesia have increasingly embraced digital lifestyles,” he said.

Samsung Electronics Indonesia consumer electronics head Bernard Ang, meanwhile, said that in the television segment alone, the pricier smart TV market had grown 52.1 percent, outpacing the 27.8 percent increase registered by regular flat panel televisions.

“Samsung has been driving the growth for smart TVs and that is why more than half of the market for this segment is ours,” he told The Jakarta Post.

Smart televisions, unlike regular flat panel units, are embedded with richer technology such as motion and voice sensors.

Ang said the entry of smart TVs into the market had formed a new segment — the “super premium” — in which each unit cost Rp 100 million (US$9,900) and above.

“We are just seeing the beginning of the super premium segment as sales steadily increase,” he told the Post.

The trend has not been lost on major electronics brands, which have started churning out products for this elite consumer group — high net worth individuals (HNWI) — that asset management firm Julius Baer predicts will number 104,000 Indonesians by 2015.

Samsung, for example, has released its 85-inch ultra-high definition (UHD) smart TV for roughly Rp 400 million while Sony markets its 84-inch Bravia 4K for about Rp 300 million.

Meanwhile, LG’s 84-inch UHD television carries a price tag of approximately Rp 200 million.

Ang said a particular buyer had even bought six 65-inch and 75-inch televisions, the prices of which start from Rp 50 million each.

According to Ang, purchases of premium televisions were on the rise because high-income customers see home electronics as statements of their lifestyle.

“Super high-end buyers want not only good quality products but also those that offer good aesthetics,” he said, adding that this elite group consisted of entrepreneurs and senior professionals who had “made it”.

He added that such customers also bought Samsung multi-door refrigerators worth around Rp 40 million to install in the family kitchen as show-and-tell pieces during house parties.

LG is also offering side-by-side refrigerators for approximately Rp 45 million.

“They like to have the latest things in their houses to talk about,” Ang pointed out.

He added that although Jakarta was still the sales locus of premium products, the Korean electronics manufacturer also saw sales in Surabaya, East Java, and Medan, North Sumatra, as wealth distribution spread outward from the
capital.

“We have also seen growth in Palembang [South Sumatra], Banjarmasin [South Kalimantan], Samarinda [East Kalimantan] and Makassar [South Sulawesi] for our 46-inch televisions,” he said.

Andi of LG Electronics Indonesia added that the mushrooming of modern electronics retail centers had helped the distribution of premium products.

“We are supported by a nationwide distribution system,” he said, adding that the manufacturer drove sales through appealing store displays and offering special promotions to would-be buyers.

Sony Indonesia spokesperson Peggy Anastasia said that as Indonesia’s economy marched forward, so would the premium consumer electronics market.

“We feel confident of this segment as the economy grows,” she said.

The World Bank expects the Indonesian economy to grow 5.9 percent this year.

—JP/Mariel Grazella

http://www.thejakartapost.com/news/2013/07/22/premium-electronics-enjoy-steady-growth.html
 
Economy in brief: Ford
opens largest dealership
in ASEAN


The Jakarta Post | Business | Mon, July 22 2013, 11:53 AM

JAKARTA: PT Ford Motor Indonesia (FMI) officially launched a new sales and distribution facility in Bekasi, West Java, last week as part of the company’s plan to expand further into the car market in the country.

Built on a 4,700-square-meter plot, the new outlet, which consists of showroom facilities and service pits for 14 to 16 vehicles, is the company’s largest dealership within ASEAN.

Ford ASEAN president Matt Bradley said with the new dealership network, people around Bekasi would have more access to the company’s new cars such as the Fiesta.

Meanwhile, managing director of PT Ford Motor Indonesia Bekasi Bagus Susanto said Bekasi is one of the most important markets in the Greater Jakarta area. He explained that since opening in April 2013, Nusantara Bekasi Ford dealership had sold 70 cars, and serviced over 200 vehicles.

By the end of the year, FMI will open as many as nine dealerships in Greater Jakarta and outside. “For the opening of the dealership, our average investment is between Rp 10 billion – Rp 20 billion,” said Bagus.

Ford Motor Indonesia (FMI) is focusing on launching their global products such as the Fiesta in Indonesia. The New Fiesta will be introduced at the upcoming Motor Show, which will be held in Jakarta in September.

Economy in brief: Ford opens largest dealership in ASEAN | The Jakarta Post

Indofood to adjust prices
if rupiah continues to
fall


The Jakarta Post, Jakarta | Business | Sat, July 20 2013, 5:13 PM

Publicly listed instant noodle manufacturer PT Indofood Sukses Makmur has announced that it will adjust its prices if the rupiah continues to weaken against the US dollar.

“We will continue to pay attention to the weakening of the rupiah to see whether it is a short- or long-term condition. If it is a long-term weakening, there will be price adjustments,” said Indofood director Franky Welirang in Jakarta on Friday evening as quoted by Antara news agency.

Franky said the weakening of the rupiah had affected the price of wheat, which was the main ingredient of many of its products.

“Wheat is mostly imported from Australia, Canada, India, the United States and Ukraine. If the rupiah continues to weaken, wheat flour will be more expensive. Wheat flour accounts for 70 percent of the cost of the company’s products,” Franky said.

Normally demand increases for raw materials such as wheat flour by up to 20 percent ahead of Idul Fitri, Franky said.

“Two weeks before Idul Fitri, the price of flour usually rises up to 20 percent because there is increased production of bread, cakes, cookies and other snacks,” he said. (ebf)

http://www.thejakartapost.com/news/2013/07/20/indofood-adjust-prices-if-rupiah-continues-fall.html

Telkom‘s H1 profits exceed
Rp 7 trillion


Raras Cahyafitri, The Jakarta Post, Jakarta | Business | Sat, July 20 2013, 3:21 PM

Telecommunications giant PT Telekomunikasi Indonesia (Telkom) reported net profits of Rp 7.13 trillion (US$703 million) in the first six months of the year, an increase of 10.8 percent year-on-year, thanks to growing cellular and data business.

According to a financial report submitted to the Indonesia Stock Exchange (IDX) on Friday, the company’s total revenues rose by 9.4 percent to Rp 40.16 trillion during the January-to-June period of the year from Rp 36.72 trillion in the same period last year.

“The increase in revenue was primarily backed by increased earnings from data service, internet and information technology [IT] as well as income from cellular,” Telkom president director Arief Yahya said in a written statement.

The company reaped Rp 15.4 trillion in revenue from the cellular business in the first half, a 4.9 percent rise compared to a year earlier, and contributed about 38 percent to the company’s total revenues.

Telkom, the fifth-biggest firm by market capitalization listed on the bourse, runs its cellular telephone business through its 65 percent stake in PT Telekomunikasi Selular (Telkomsel).

Telkom said Telkomsel recorded 12 percent growth in revenue to Rp 28.5 trillion in the first half of the year, which was partly supported by a 6.7 percent increase in the number of subscribers; 125.1 million compared to 120.61 million in the same period last year.

A significant increase was seen in the company’s income from data, internet and IT services of Rp 15.04 trillion in the first six months of the year, 18 percent higher than the Rp 12.74 trillion in the previous year. The data, internet and information technology business contributed about 37 percent of Telkom’s total revenues in the first half.

The growing number of broadband users contributed to the increase in the data business. Telkom’s fixed broadband clients, who use the Speedy internet service, rose by 42 percent to 2.78 million users as of the end of June this year compared to 1.96 million last year.

The number of mobile broadband users – those who use the Flash modem product – rose to 11.11 million people as of the end of June this year, a massive 91.4 percent surge compared to 5.81 million at the end of the previous June.

BlackBerry users also increased by 56 percent to 6.33 million compared to 4.06 million in the same
period last year.

Despite the increase in the number of broadband users, Telkom said its average revenue per user (ARPU) for broadband plunged by 23.6 percent in the first half of the year due to increasing users of prepaid services with lower ARPU such as Speedy.

The ARPU for the cellular business remained stable at Rp 36,000.

Telkom finance director Honesti Basyir said that the company expected its business would continue to grow at 8 to 9 percent by year-end despite challenging issues related to surging inflation and interest rates.

“We will see a higher financial burden due to increasing interest rates. Meanwhile, if inflation rises, people will cut back spending. However, there are usually additional earnings during Ramadhan, which can compensate,” Honesti said by telephone.

According to Honesti, Telkom usually enjoys higher earnings of around Rp 200 billion to Rp 300
billion during Ramadhan and Idul Fitri as people make more use of voice calls, text messages and other services such as mobile messaging to greet friends and family.

Shares in Telkom, which trade on the IDX under the code TLKM, closed at Rp 11,650 on Friday, up 2.19 percent. Telkom, whose market capitalization is Rp 235 trillion, helped the benchmark index avoid ending in the red zone on Friday. The Jakarta Composite Index closed a slight 0.08 percent higher at 4,724.41.

http://www.thejakartapost.com/news/2013/07/20/telkom-s-h1-profits-exceed-rp-7-trillion.html
 
Antam says sales target
on track, gold leads


The Jakarta Post | Business | Fri, June 14 2013, 10:38 AM

State-owned diversified miner PT Aneka Tambang (Antam) will likely meet its sales target by year’s end, particularly on gold.

In an announcement submitted to the Indonesia Stock Exchange (IDX) on Thursday, Antam said gold sales reached 5,152 kilograms during the January to May period of the year, which translates to 68 percent of its full-year target of selling to around 7,000 kilograms.

Also, the company’s sales of ferronickel reached 7,028 tons of nickel (TNi) in the same period this year, or 39 percent of its full year target of 18,000 TNi. Meanwhile, nickel ore sales volume reached 4 million wet metric tons (wmt), or 35 percent of its full-year target of 11.5 million wmt by year’s end.

The company also said that it was on track to commence operations at its Chemical Grade Alumina, which will process bauxite, this October.

“The commissioning is three months ahead of our contractual schedule of January 2014,” president director Tato Miraza said.

Shares in Antam (ANTM) closed at Rp 1,110 on Thursday, declining by 1.76 percent compared to a day earlier.

Antam says sales target on track, gold leads | The Jakarta Post

Tanjung Perak, Banjarmasin
post 5% growth


The Jakarta Post, Jakarta | Business | Sat, July 20 2013, 7:25 AM

Tanjung Perak Port in East Java and Banjarmasin Port in South Kalimantan posted 5 percent growth in the first half this year compared to the same period last year, an operator says.

Edi Priyanto, spokesman of state-run Pelindo III, which operates the ports, said growth was supported by increasing trade activities there, thanks to the country's healthy economy.

Container traffic passing through Tanjung Perak reaches 1.46 million TEUs (20-foot equivalent units) while in Banjarmasin the figure stands at 218,436 TEUs, according to Edi.

"We predict the growth will exceed 5 percent by the end of this year as we keep developing the ports to accommodate market demand," he told The Jakarta Post on Friday.

He said the firm was set to further grow Tanjung Perak, which is the country's second largest port after Tanjung Priok port in Jakarta, by connecting it to three other ports, namely Ende and Kalabahi ports in East Nusa Tenggara and Badas port in West Nusa Tenggara, later this year.

In addition, he said Pelindo III had allocated Rp 460 billion (US$46 million) to expand the capacity and operate new cranes in Banjarmasin to smooth loading and unloading activities at the port.

"We are extending the berth from an existing 240 meters to 505 meters so that more ships can berth at the port. We expect to finish this project by the end of this year because business cannot wait," he continued, adding that they planned to add four new container cranes in Banjarmasin.

http://www.thejakartapost.com/news/2013/07/20/tanjung-perak-banjarmasin-post-5-growth.html

200 fuel tankers to serve
Idul Fitri exodus routes


The Jakarta Post, Jakarta | Business | Sat, July 20 2013, 12:17 PM

State-owned oil and gas company PT Pertamina will prepare more than 200 fuel tankers to serve areas prone to gridlock along Idul Fitri exodus routes in Java.

Pertamina corporate communication vice president Ali Mundakir said the company would ensure a stable supply of fuel during the Idul Fitri holiday.

“Our main focus is to mobilize fuel tankers during severe gridlock along exodus routes. We have anticipated this by increasing the number of fuel tankers or ‘pockets of fuel’ to serve gas stations along exodus routes,” said Mundakir after an event to draw the winners of Pertamax-Fastron Goes to Monza in Jakarta on Friday evening, as quoted by Antara news agency.

The tankers will serve areas primarily along the Cikampek-Cirebon, Cirebon-Pekalongan, Semarang-Yogyakarta, Surabaya-Kediri-Madiun and Nagrek routes.

Ali said Pertamina would also cooperate with the police to prioritize fuel tankers in traffic congestion. It will also open 24-hour posts to secure and monitor fuel distribution at gas stations.

Premium sales are expected to increase 13 percent from the normal level of 80,000 kiloliters per day.

Pertamina estimates that Premium consumption at the peaks of the exodus, or six days before Idul Fitri and five days after the holiday, will reach 107,000 kiloliters. (ebf)

http://www.thejakartapost.com/news/2013/07/20/200-fuel-tankers-serve-idul-fitri-exodus-routes.html

RI to import more than
3,000 beef cattle: Minister


The Jakarta Post, Jakarta | Business | Fri, July 19 2013, 5:31 PM

Trade Minister Gita Wirjawan said the number of beef cattle to be imported in the near future would be more than 3,000.

The government, through the Agriculture and Trade ministries, has decided to import the beef cattle without a specific quota to stabilize soaring beef prices.

“I think it would be more than that number [3,000 head]. We will import as many as possible so that the beef price will go down,” said Gita on Friday as quoted by Antara news agency.

It is expected that the imported cattle will arrive before the end of July. With such a large import, the price of beef could be pushed down to Rp 76,000 (US$7.52) per kilogram as happened in Ramadhan last year.

“Hopefully, ahead of the Idul Fitri festivities, we’ll see a significant decline in the price of beef, currently sold at Rp 95,000 per kilogram, and even higher in several areas,” said Gita.

Sharp increases in beef prices have triggered suspicions of cartel activity.

Commenting on the issue, Gita said it was too early to conclude that the sharp price hikes were the result of the actions of a cartel. According to the minister, the current national supply of beef is insufficient to meet consumer demand, which has drastically increased during Ramadhan.

“Nationally, it can be ascertained that there is a lack of beef. So, if the supply is not sufficient, there will still be a price increase no matter whether there is a cartel or not,” said Gita. (ebf)

http://www.thejakartapost.com/news/2013/07/19/ri-import-more-3000-beef-cattle-minister.html
 
Kuwait, Qatar add flights
to Jakarta


Nurfika Osman, The Jakarta Post, Jakarta | Business | Fri, July 19 2013, 11:27 AM

Gulf carriers Kuwait Airways and Qatar Airways intend on increasing flight frequencies to Jakarta in the fourth quarter this year to benefit from the rising number of travelers from Indonesia to the Middle East.

Kuwait Airways manager at Soekarno-Hatta International Airport Jeanete M. Gerung said the carrier planned to add one more flight connecting Kuwait city and Jakarta in October this year.

“Demand is rising from Indonesia, both from travel agencies and individuals who want to visit Kuwait and other destinations across the Middle East, Europe and North America,” Jeanete told The Jakarta Post.

“Our passenger load factor is very healthy and sometimes we don’t have enough slots to accommodate the demand, particularly from travel agencies who want to bring travelers to Mecca, Jerusalem and Alexandria.”

She said that the firm was preparing a new direct service as they wanted to better serve customers in Indonesia as well as its global customers who wanted to go to Indonesia.

The full-service carrier entered Indonesia on Dec. 1, 1993 and it is currently connecting the capital city to Kuwait three times a week: Mondays, Thursdays, and Fridays with an Airbus A340-300 plane outfitted with 18 and 254 seats for business and economy class, respectively.

Meanwhile, Qatar Airways announced that the airline would add three more flights for its Doha–Jakarta route from its current 11 weekly flights. “After almost 12 successful years of operations in Jakarta, we are absolutely delighted to be able to continuously increase our capacity to and from Indonesia,” country manager Chan Cheong Eu said.

All flights on this route will feature a modern mix fleet of Boeing B777-300 and A330 aircraft featuring two-class configuration.

He said the airline had recently increased its capacity to Soekarno-Hatta International Airport by 29 percent earlier this year and decided to increase capacity again only months later due to strong demand from the local market as well as from their global network.

Qatar Airways was one of the few airlines in the world awarded 5-star status by UK-based Skytrax, a consultancy firm that routinely ranks the world’s best airlines and airports.

It has seen rapid growth in just 16 years of operation, currently flying a modern fleet of 127 aircraft to 128 key business and leisure destinations in Europe, Middle East, Africa, Asia Pacific and the Americas.

Before Kuwait and Qatar, another premium gulf carrier, Emirates, increased its non stop Jakarta–Dubai service from twice to three times daily in March this year.

Data from the Tourism and Creative Economy Ministry’s Information Center said more connections between Indonesia and the Middle East had resulted in strong tourist arrival growth, particularly from the United Arab Emirates (UAE), Saudi Arabia, Egypt and Bahrain. This year, the UAE had the highest growth both in monthly and tri-annual bases with 159.59 percent and 86 percent, respectively.

Kuwait, Qatar add flights to Jakarta | The Jakarta Post

CPO sales surge despite
global decline in prices


Raras Cahyafitri, The Jakarta Post, Jakarta | Business | Fri, July 19 2013, 11:24 AM

Two major crude palm oil (CPO) producers have reported significant increases in their sales volumes in the first half of this year despite a decline in the commodity’s price.

According to a file submitted to the Indonesia Stock Exchange (IDX) on Thursday, PT Astra Agro Lestari (AALI), a subsidiary of diversified conglomerate PT Astra International, said it sold 752,202 tons of CPO during the January to June period of this year, a 16.7 percent increase on the 644,439 tons in the same period last year.

Most of the CPO products were sold on the domestic market, which accounted for 97.9 percent of total sales volume.

Despite the increase in sales volume, AALI may report a drop in net profits as it suffered declines in the average selling price (ASP) in the first half of the year.

Its CPO sold for Rp 6,638 (65 US cents) per kilogram during the period, a 15.8 percent drop compared to Rp 7,886 per kilogram in the same period last year.

Another CPO producer PT BW Plantations (BWPT) also reported rising sales despite falling prices. The company sold 76,994 tons of CPO in the first six months of the year, increasing by around 22 percent from 63,084 tons in the same period last year.

However, its selling price dropped 16.8 percent to Rp 6,351 per kilogram in the first half of the year from Rp 7,636 per kilogram in the same period last year.

“The company is aiming for a 25 percent increase in CPO sales by year-end,” BWPT corporate
secretary Kelik Irwantoro said in an email.

CPO prices have declined due to lower demand as a result of the weakening global economy. According to figures from the Bursa Malaysia Derivatives as quoted by Bloomberg on Monday, CPO contracts for September delivery stood at 2,278 ringgit ($714) per ton, which is the lowest level since May 7.

Despite the declining prices, AALI said it was optimistic about the business in the long term due to increasing vegetable oil consumption particularly in Europe.

The company, citing figures from trade publication Oil World, said the global consumption level of major vegetable oil including soya oil, palm oil, sunflower oil and rapeseed oil had been increasing over the past 10 years.

“Moreover, CPO is the second most consumed vegetable oil in the EU [European Union] after rapeseed oil. The consumption level of CPO in EU countries has been increasing each year, which indicates greater dependency of EU countries on the CPO commodity,” AALI said in a report.

Sampoerna Agro’s head of investor relations Michael Kesuma said that CPO consumption in Indonesia had also increased.

“The increase was particularly evident in the last two months, ahead of Ramadhan,” he said.

Sampoerna Agro sells 90 percent of its CPO on the domestic market, according to Michael. The company has not released its production or sales volume for the first half of the year. However, Michael said the company would likely see flat production for the period.

“Our plants remain affected by unfavorable weather over the last 24 months, affecting our production,” Michael said.

http://www.thejakartapost.com/news/2013/07/19/cpo-sales-surge-despite-global-decline-prices.html

Ferrostaal, Chandra Asri
join forces on $1.89b factory


Raras Cahyafitri, The Jakarta Post, Jakarta | Business | Fri, July 19 2013, 11:07 AM

German petrochemical company Ferrostaal Industrial Projects GmbH and Jakarta-listed PT Chandra Asri Petrochemical have agreed to work on studies for the development of a petrochemical plant.

Under an agreement signed on Thursday, Ferrostaal and Chandra Asri will develop a methanol-based olefin production complex in Teluk Bintuni in West Papua, with a total investment amounting to US$1.89 billion.

The complex is expected to produce up to 400,000 tons of polypropylene and 175,000 tons of ethylene annually.

However, the project is dependant on feasibility studies as well as gas allocation and prices from the Energy and Mineral Resources Ministry.

Ferrostaal and Chandra Asri will cooperate with the Industry Ministry on the feasibility studies.

“We are still on the agreement on feasibility studies. [What comes next] will depend on whether we will get the gas allocation,” Chandra Asri president director Erwin Ciputra said after the agreement signing at the Industry Ministry.

Gas supply for the complex is expected to be provided by the Tangguh liquefied natural gas (LNG) plant also in West Papua.

Both Ferrostaal and Chandra Asri have not determined the allocation of their relative share-holdings in the putative joint venture that would work on the planned project.

Ferrostaal senior executive manager for petrochemical development Asia Pacific Soenke Gloede said there would be preparation procedures following the feasibility studies — if successful — before the project kicked off.

“The detailed schedule will now be worked out together with our partner,” Gloede said. “A factory complex like this may require three years of construction.”

The production complex is expected to be ready for operation by 2019.

Petrochemicals is one of the country’s focuses in terms of industrial development. The development of this particular industry is expected to reduce imports of materials, such as propylene, ethylene, methanol, polypropylene and polyethylene from a number of countries, including neighboring Thailand and Singapore.

Figures from the Industry Ministry show that imports of petrochemical products reached $8.5 billion last year.

Industry Ministry director for manufacturing-based industry Panggah Susanto said the planned complex was in line with the government’s plan to develop eastern Indonesia.

Ferrostaal has previously built a methanol factory complex in Trinidad & Tobago with a production capacity of 4.1 million tons per year and another one in Oman with an annual capacity of 1 million tons.

Chandra Asri, Indonesia’s largest petrochemical company, expects to start operations at its butadiene plant in Cilegon, Banten, the first of its kind in the country, later this year.

In its latest move, Chandra Asri agreed with French tire maker Compagnie Financière Groupe Michelin to develop a $435 million synthetic rubber plant that is also expected to be built in Cilegon.

Chandra Asri recently terminated an agreement with state-owned energy firm PT Pertamina on their plan announced late last year to establish and operate a $200 million polypropylene factory in Balongan, Indramayu, West Java.

Shares in Chandra Asri, which trade on the Indonesia Stock Exchange under the code TPIA, were unchanged at Rp 2,700 (26 US cents) on Thursday.

http://www.thejakartapost.com/news/2013/07/19/ferrostaal-chandra-asri-join-forces-189b-factory.html
 
Wijaya Karya team up with
UMG to explore Myanmar


Nurfika Osman, The Jakarta Post, Jakarta | Business | Fri, July 19 2013, 11:02 AM

Indonesian publicly listed construction company PT Wijaya Karya will set up a joint venture company with Myanmar’s United Mercury Group (UMG) to help expand its business overseas.

Wijaya Karya foreign affairs department manager Destiawan Soewarjono said on Thursday they would construct a precast factory and work on big infrastructure projects in Myanmar through the joint venture firm.

“We plan to start the construction of our factory on a 5-hectare area in Myanmar this year. In the first phase of its operation, it is expected to produce 27,000 tons annually,” Destiawan said after the signing of a memorandum of understanding (MoU), with State-Owned Enterprises Minister Dahlan Iskan, Public Works Minister Djoko Kirmanto and Myanmar Construction Minister Kyaw Lwin among the witnesses.

“We are hoping to work in potential infrastructure projects in Myanmar as soon as this firm is established.”

He said Rp 200 billion (US$20 million) had been spent for the factory project, with another Rp 80 billion in the near future.

Destiawan said Wijaya Karya, which now controlled 10 percent shares, would increase its ownership to 40 percent over the next three years as agreed.

Djoko said the collaboration between the two companies showed Indonesia’s strong commitment to helping develop Myanmar and support the 2015 ASEAN Economic Community.

He said he hoped to see more infrastructure companies follow in Wijaya Karya’s footstep by entering Myanmar or any other Southeast Asian countries.

In addition, Dahlan said this was the perfect time for Indonesia to enter Myanmar as the country was in an early development stage, giving huge room for more local firms to work on projects.

He also urged Indonesian private companies to explore business opportunities there to strengthen Indonesia’s presence in foreign countries.

Besides Wijaya Karya, oil and gas firm PT Pertamina and publicly listed lender PT Bank Negara Indonesia had been running operations in Yangon since the end of 2012.

Indonesia’s total investment in Myanmar currently stands at $241.5 million, with the figure expected to increase significantly when the ASEAN single market officially kicked off in 2015.

During the Forum for East Asia-Latin America Cooperation (FEALAC) foreign ministers meeting in Nusa Dua, Bali, last month, both nations have reiterated their bilateral commitment to boost efforts in achieving the target of $1 billion in trade volume by 2016.

Indonesia, Southeast Asia’s largest economy, has less business exposure and presence in Myanmar compared to its regional neighbors, like Thailand, Singapore and Malaysia. Singapore’s sovereign wealth fund, Temasek Holdings, is believed to have invested $3 billion in Myanmar.

Wijaya Karya team up with UMG to explore Myanmar | The Jakarta Post

Marubeni to build $2b power
plant


Linda Yulisman, The Jakarta Post, Jakarta | Business | Fri, July 19 2013, 10:42 AM

Driven by surging electricity demand in Indonesia, Japan’s diversified group Marubeni Corporation plans to construct a coal-fired power plant (PLTU) with an estimated investment of up to US$2 billion.

“Marubeni will construct a 1,000-megawatt [MW] power plant in Cirebon [West Java] near to the location of its existing power plant,” Industry Minister MS Hidayat told reporters after a meeting with the firm’s executives on Thursday at his office, adding the construction work was expected to start by the end of this year.

Marubeni would at first be required to secure a permit from the Energy and Mineral Resources Ministry, he said.

The development of the critical coal-fired power plant would be carried out through its subsidiary, Cirebon Electric Power (CEP), and another Japanese investor, he further said.

At present, CEP operates a 660-MW coal-fired power plant in Cirebon that it built with an investment of $850 million.

Marubeni owns a 32.5 percent stake in CEP, while the remainder belongs to Korea Midland Power Corporation (27.5 percent), Korea’s Samtan Corporation Ltd (20 percent) and local firm PT Indika Energy (20 percent).

Under an independent power producer mechanism, Marubeni would sell electricity it produces through the future power plant to state power firm PT PLN at 4.43 cents per kilowatt-hour (kWh).

Wishnu Wardhana, vice president of Indonesia’s third largest coal producer Indika Energy, confirmed the plan, saying the construction of the power plant would begin “as soon as possible”, with the final stage still ongoing between the investors, PLN and the government.

Marubeni senior advisor Wataru Yoshida said that as Indonesia’s economy grew at a rapid pace, it would generate huge demand for infrastructure development in the country, particularly power generators, thereby providing Marubeni myriad business opportunities, Yoshida added.

“I understand you need more capacity in this country. If your country wants, we are ready to construct,” he told reporters after the meeting with the industry minister.

In addition, Hidayat also said Marubeni, which had a wide interest in power generation, would also send a team to assess an offer from the government to develop another power plant with alternative energy sources in Bintuni Bay, West Papua.

Apart from the planned coal-fired power plant in Cirebon, Marubeni also currently expects to build a 220MW geothermal power plant in Rantau Dedap, South Sumatra.

The power plant will be constructed by the Supreme Energy Rantau Dedap (SERD), a company it jointly set up with local player Supreme Energy and France’s GDF Suez SA. It would supply electricity to PLN starting from 2016 under a purchase agreement sealed November last year.

Earlier this year, the firm also said it was eyeing development of water treatment plants in Jakarta with
local and foreign partners.

http://www.thejakartapost.com/news/2013/07/19/marubeni-build-2b-power-plant.html

Raging bulls wreak havoc
on W. Java street


The Jakarta Post | Headlines | Sat, July 27 2013, 11:14 AM

Six bulls stressed out by a long, uncomfortable journey managed to jump out of their overcrowded truck early on Friday and caused a commotion before police shot them dead.

The marauding beasts were among 22 being taken from Cilacap in Central Java to a breeding ranch in Malangbong, West Java.

The bovines at the back managed to escape after they kicked and broke the truck’s door at about 1:30 a.m., said driver Iing, 45.

Outnumbered and overwhelmed, Iing and his assistant asked the police and bystanders for help. Still, the reinforcements were not enough and none of the animals could be captured. Fearing for the safety of residents, two riot police officers shot all six bulls dead at 6 a.m.

“The bulls couldn’t be captured and they tried to attack us,” local police chief Adj. Comr. Cucu Juhana said.

A butcher was called in to slaughter the dying animals, detik.com reported.

http://www.thejakartapost.com/news/2013/07/27/raging-bulls-wreak-havoc-w-java-street.html
 
Government resorts to imports
after harvest failures


Anggi M. Lubis, The Jakarta Post, Jakarta | Business | Wed, July 17 2013, 12:51 PM


The government is speeding up the import of several agricultural products in a bid to back up supplies and keep prices intact amid the high demands of the Islamic fasting month and upcoming Idul Fitri holidays.

Agriculture Minister Suswono said the government had started bringing in more shallots and chilies as heavy rain in this dry season — when commodities are usually harvested — had severely disturbed production and further disturbed supplies.

According to Suswono, central producing areas such as Brebes in Central Java, will only start harvesting in August.

“We are lacking stocks of shallots and cayenne. We have teamed up with the Trade Ministry to speed up imports for registered importers to help out with the shortage,” he said.

Trade Minister Gita Wirjawan told the media earlier that the government had sped up the import of shallots and cayenne, 4,000 tons each, from Vietnam, Thailand, and India. The commodities are expected to enter the market by year’s end.

According to Agriculture Ministry data, import quotas for shallots and cayenne for the second half of this year are 9,700 tons and 16,800 tons, respectively.

The soggy dry season has sapped production and driven up prices of the horticultural commodities.

Meanwhile, Chili Producers Association (AACI) chairman Dadi Sudiana said chili production was estimated to decrease by 40 percent due to harvest failure but hoped the government would not issue import recommendations, fearing that imports would further inflict losses on farmers.

Indonesia produced 960,000 tons of shallots and 697,000 tons of cayenne last year.

Data from the Trade Ministry said that by the end of last week, the price of shallots in Jakarta reached Rp 63,000 (US$6.3) a kilogram while the price of cayenne hit Rp 117,000 a kilogram.

Food prices in July have seen a 5 percent increase compared to in June, with chilies seeing a 63 percent price increase, shallots a 49 percent increase, chicken meat a 19.5 percent increase, eggs a 9.32 percent increase, while the price of beef has gone up 41 percent, according to a recent release from the Business Competition Supervisory Commission (KPPU).

The commission itself has deployed a team to investigate the possibility of cartels behind the soaring prices.

President Susilo Bambang Yudhoyono recently blasted Suswono for failing to bring down food prices, mainly beef, before the start of Ramadhan.

In April, the government appointed State Logistic Agency (Bulog) to import an additional 3,000 tons of beef to push down and maintain prices during the holy month.

Bulog is expected to bring in 800 tons of beef on airplanes this week, while the remaining 2,200 tons will be transported by cargo ship and is projected to enter the market by the end of July. Data from the Trade Ministry said that beef prices reached Rp 93,770 per kilogram last week.

Government resorts to imports after harvest failures | The Jakarta Post

Karawang industrial park
to have energy-saving project


The Jakarta Post, Jakarta | Business | Wed, July 17 2013, 11:47 AM

A Japanese agency has initiated a ¥3.5 billion (US$34.97 million) energy conservation project at Karawang industrial park, West Java, a plan that could reduce energy consumption by 15 percent.

The New Energy and Industrial Technology Development Organization (NEDO) of Japan will carry out the project at the 1400-hectare Suryacipta City of Industry, which is home to about 75 companies, many of which are multinational corporations.

“If this project succeeds, we will commercialize and offer it to other industrial parks. The project will be starting in the coming months. We’re targeting all hardware to be installed by next April,” NEDO
executive director Hiroshi Kuniyoshi told The Jakarta Post.

The project will run in approximately 30 months with state-owned electric company PT Perusahaan Listrik Negara (PLN) as the executor of the project and Sumitomo Corporation as the coordinator for a number of Japanese companies that will introduce the energy-conserving technology.

The project aims to apply energy conservation technology and regulate demand and supply using an energy management system, with NTT Communications providing the technological platform as a common base for the overall system.

Fuji Electric will provide technology for stabilizing electricity quality, namely a distribution automation system (DAS), uninterruptible power supply (UPS) system and equipment for stabilizing voltage.

This will be introduced to construct a stabilized power system with high quality power.

Mitsubishi Electric will implement the demand side management system (DSM) and introduce a Factory Energy Management System (FEMS/EMS) to promote energy conservation.

The launching of the project was marked with the signing of a memorandum of understanding (MoU) between NEDO and the Energy and Mineral Resources Ministry’s directorate-general for new renewable energy and energy conservation on Monday.

The MoU took place following a feasibility study on “Smart Communities in Industrial Parks” that was carried out in 2012.

The study concludes that energy demand in Indonesia is relatively high and that the energy is still used inefficiently by energy consumers in the industry sector.

Indonesia’s industry sector accounts for 49.4 percent of total energy consumption, or 329.7 million barrels of oil equivalent (BOE).

In addition, 19.84 billion kilowatt hours are taken up by the industry sector. (asw)

http://www.thejakartapost.com/news/2013/07/17/karawang-industrial-park-have-energy-saving-project.html
 
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from Iasi Germany, analyst for asia pasific economic situations based in Germany

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The forecast of GDP growth in Asia Pasific regions

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by frontierstrategygroup
 
Jakarta Fair 2013

Jakarta Fair (Indonesian: Pekan Raya Jakarta or PRJ) is a fair held annually in Jakarta International Expo (JIE) Kemayoran, Jakarta, Indonesia, in June and July. It features exhibitions, trade promotions, shopping, music performances, various shows, amusement rides and a food festival. The fair is meant to celebrate the anniversary of Jakarta. The Jakarta Fair sees exhibitors from across the country display a whole range of goods and products ranging from specialty food items to traditional handmade arts and crafts. In addition to the many exhibitors, there is also live entertainment including music, dance and cultural performances.

The fair incorporates trade exhibitions and entertainment that existed in Batavia (now Jakarta) during Dutch East Indies era. Originally the annual fair took place in Koningsplein (now Merdeka square) in Weltevreden Batavia and it was called "Pasar Gambir". After Indonesian independence the modern Jakarta Fair was held again for the first time in 1968 and inaugurated by president Suharto. The fair took place from 5 June to 20 July 1968 on southern part of Merdeka square near National Monument. The idea to hold a grand fair in Jakarta was initiated by Jakarta's governor Ali Sadikin in 1967, inspired by the colonial era Pasar Gambir. He sought a centralized grand fair to combine several night markets ("Pasar Malam") held throughout the city. Since then it has become an annual event as part of the city's anniversary celebrations. The longest Jakarta Fair, of 71 days, was held in 1969. Usually Jakarta Fair is held for 30 to 35 days. USA president Richard Nixon is one of the VIP guest that visit Jakarta Fair 1969.

Because the number of participants grown steadily the fairground in the southern park of Medan Merdeka square was considered not large enough to contain the grand fair. In 1992 the Jakarta fairground was moved to its present location in Jakarta International Expo at Kemayoran. The exhibition complex is located on former Kemayoran Airport.

In 2010 trade worth Rp 3.5 trillion ($410 million) occurred in Jakarta Fair. The 2011 ticket price is Rp 15,000 ($1.8) on weekdays and Rp 20,000 ($2.4) on Saturday, Sunday and holidays.[2] 2,600 companies joined the 2011 Jakarta Fair in more than 1,300 stalls. The event attracted more than 4 million visitors with transaction worth Rp 3.7 trillion ($432.9 million) and surpassed the target.

A similar fair called Pasar Malam Besar held in The Hague, Netherlands, also inspired by the "Pasar Malam" tradition of colonial era Pasar Gambir.

And hence the pictures of Jakarta fair 2013

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This is bonus for you all who visit this page of thread :P

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Jakarta International Jewellery Fair 2013

Tuesday, 07 Mei 2013 - 12:00 wib

The models show off their jewelry assecories during sixth Jakarta International Jewellery Fair 2013 in Balai Kartini, Jakarta Selatan, Tuesday (7/5/2013). Beside Indonesia, the show will include jewelries company from the others countries too, like Malaysia, Hongkong, India and Italia.

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Indonesian peoples lifestyle right now is based on consumerism and shopping culture, i hope this is just a side effect of the growing of our middle class community.

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