THE
COORDINATING MINISTRY FOR ECONOMIC AFFAIRS
Tel: (021) 351-1178 Fax: (021)
351-1186 Website: http://www.ekon.go.id
Trade and
Investment News[1], 6 July 2009
Highlights
National
·
El
Nino likely to cause rainfall shortage this year, says meteorology agency
Politics
·
Presidential
candidates hold final rallies before poll
Terrorism
·
Security
·
Preparations
for new
Law & order
·
Govt.
agrees to release 50 detained Chinese fishermen
Economy
·
Bank
·
Finance
Minister warns of further impacts from global crisis
Business briefs
Macroeconomy
·
Investment
·
Forestry
ministry predicts $1.5 billion in production forest investment
·
Investment
cluster planned by East and
State concerns
·
Rice
output estimate raised, but El Nino fears stop export plans
SOEs
·
Garuda
may resume
·
PT
Adhi Karya wins $42 million
Private sector
·
PT
Indomobil sales down, but productivity boost may see higher profits
·
PT
Berlian Laju Tanker in $59 million rights issue
Banks
·
Bank
Permata to return $53 million in disputed Bank Bali funds
·
Bank
Rakyat
Power
·
Total
and Inpex to sell gas to
·
Oil & gas
·
Government
pushes for on-shore plant for Inpex Masela block
Mining
·
New
mining law to set 20% local ownership requirement
·
PT
Bumi Resources to diversify from coal, looks at gold investments
NATIONAL
El Nino this
year ‘very likely’: BMG
An El Nino weather pattern will very likely affect
The region is bracing for a possible return of El Nino this
year which could bring dry weather to the western Pacific and
"We have made an analysis and have also discussed this
at the government level that the probability of an El Nino this year is very
strong," Soetamto, the BMG’s head of climatology and air-quality analysis,
said.
The agency's view echoed a revised forecast by Australia's
Bureau of Meteorology that an El Nino appears almost certain, raising the
prospect of drought in Australia and an even weaker monsoon in India.
An Agriculture Ministry official previously warned that the
government must cautiously manage its rice surplus this year, retaining the
surplus for domestic stock, as El Nino could cut output in 2010 and 2011.
A prolonged drought could also threaten hopes to boost
output of other key crops, such as soybean and corn.
POLITICS
Presidential candidates hold final rallies before vote
Presidential candidates held their final rallies Saturday
ahead of the second direct elections for
Incumbent Susilo Bambang Yudhoyono is riding high after his
centrist Democratic Party tripled its vote in April's general election to
become the largest party in parliament.
He is hoping to win a clear majority in Wednesday's vote and
avoid a run-off in September against either of the other two candidates -- opposition
leader Megawati Sukarnoputri or Vice President Jusuf Kalla.
Tens of thousands of supporters wearing the blue and white
colors of the Democrats were packed into the national stadium in
Meanwhile Megawati warned supporters to beware of electoral
fraud as she campaigned in
Megawati, who leads the Democratic People's Party of
Struggle, has a strong following as the daughter of independence hero Sukarno
and was the figurehead of the opposition against Suharto's regime in the late
1990s.
She became president of the world's third-largest democracy,
after India and the US, in 2001.
Kalla, the charismatic leader of the Golkar Party who has
trailed in opinion polls, has proven to be a tough competitor on the campaign
trail.
Kalla and his running mate, former military chief Wiranto,
have championed a philosophy of economic "self-reliance".
Constitutional
Court takes shackles off media, pollsters
The media can report on election-related events during the four-day
"silent period" ahead of Wednesday’s presidential election and
pollsters can announce the results of exit polls once voting venues close, the Constitutional
Court ruled on Friday, The Jakarta Globe
reported.
Constitutional Court chief Mahfud MD said articles of the
Election Law that ban the media from publishing or broadcasting news,
commercials or information about the candidates during the “quiet period” were unconstitutional.
The introduction of the “quiet period” was intended to give
voters a chance to consider the candidates and the issues immediately before
the election without being subjected to campaign events and news reports.
The articles in the law provided penalties that included the
revocation of publishing and broadcasting licenses.
“(The
The verdict also stated that any prosecuting authority
investigating a print or media outlet for alleged breaches of the Election Law
must refer to the Press Law and the Broadcasting Law.
The case was filed by the chief editors of Vivanews.com, Tempo magazine, Tempo newspaper, The Jakarta Post, Jurnal Nasional daily, 68H radio news agency and the Voice of Human
Rights Radio.
In a second hearing on Friday, the
The challenge was filed by the Indonesian Research and
Public Opinion Association (AROPI).
Mahfud said penalties, including imprisonment and fines,
outlined by articles 188, 228 and 255 of the Presidential Election Law were no
longer binding.
According to the Court’s verdict, concerns by some
government officials and members of the House of Representatives over the publication
of exit poll results were baseless.
TERRORISM
Malaysian police have detained three terror suspects under a
tough security law for allegedly trying to revive the Jemaah Islamiyah (JI)
militant group in that country,
The trio, aged between 43 and 53, are believed to have met
with Singaporean militant Mas Selamat bin Kastari, who was captured in
Malaysia's south in April after escaping from detention in Singapore,
Kastari is said to be the head of the
"I confirm the arrests, but I cannot reveal anything
further," said police chief Musa Hassan.
The news report said the three men, believed to be ordinary
JI members, were picked up by police last week in southern Johor state after
months of investigation.
It said an investigation was under way into whether they
recruited any more members in recent months.
BI regulates terrorism
checks for new banking clients
Bank
The regulation, which also aims to reduce money laundering,
came into effect July 1.
“BI’s latest regulation is another positive measure aimed at
curbing terrorism or those that finance it,” said National Police spokesman
Brig. Gen. Sulistyo.
Sulistyo said other avenues pose a threat to reducing
terrorism financing, including through so-called charitable organizations or
money changers.
SECURITY
‘Positive’
signal on border talks with
Faizasyah said that he expected representatives from both
countries to meet in
“Even though
The “positive signal” had been communicated in telephone
calls between officials in
The Indonesian delegation will reportedly be headed by Arief
Havas Oegroseno, the Foreign Ministry’s Director General for International Treaties
and Legal Affairs.
Preparation for their work started on Tuesday when Defense
Minister Juwono Sudarsono and his Malaysian counterpart, Ahmad Zahid Hamidi,
met in
Sudarsono said they had agreed each country's sea patrols
had to be extra cautious in determining patrol pathways, in accordance with the
line that each regards as its own territory.
W. Kalimantan
military command nearly complete: TNI head
The formation of a military area command (Kodam) in West
Kalimantan will be complete by 2010, Armed Forces (TNI) commander Gen Djoko
Santoso said last week, Media Indonesia
reported.
Santoso said the new Kodam in West Kalimantan is justified
due to the province's close proximity with
"It's impossible for a border as long as 2,000 km to be
safeguarded by only a single Kodam," he said.
West Kalimantan hosted a regional command from 1958 to1985,
when it was combined with other military commands to form a single command for
Kalimantan, headquartered in
Santoso said to support the new TNI command area, a new
unit, the Brigade Infantri Khatulistiwa, is in the process of being formed.
Ministry in
talks with Lockheed Martin on new transports
The Defense Ministry is in talks with American aircraft
manufacturer Lockheed Martin over purchasing new Hercules transport planes,
Tempo Interactive reported.
“We are still assessing the possibility of buying the
aircraft,” Defense Minister Juwono Sudarsono said on the sidelines of a meeting
with Malaysian Defense Minister Dato Ahmad Zaid Bin Hamidi in
Sudarsono said negotiations were underway to purchase H-type
Hercules at a reduced price.
“We have yet to learn the price of the aircraft or the
reduction value,” he said. The negotiation of the price is the responsibility
of the defense contractor, Sudarsono added.
“The purchases will also depend on the amount of a possible
loan from the
LAW & ORDER
Govt. agrees to release 50 detained Chinese fishermen
The government has agreed to free most of the 75 Chinese
fishermen detained for illegal fishing last month following talks between the
two countries last week, China Daily reported.
The captains and chief engineers of the captured vessels
will be prosecuted and the vessels will be confiscated by
The development came after a meeting between
ECONOMY
BI cuts key rate to 6.75%, little
more room to move
Bank Indonesia (BI) cut its
benchmark interest rate by 25 basis points to 6.75% Friday in a bid to
stimulate the economy as inflationary pressures ease but central bankers said
the opportunity for further cuts was limited, Agence France-Presse reported.
BI has cut its policy rate by 275
basis points since December and this month’s cut followed the fall in the annual
inflation rate to 3.65% from 6.04% in May, according to the Central Bureau of
Statistics (BPS).
Annual core inflation, which
excludes food items and government-set prices, eased to 5.56% from 6.64% in
May.
The dramatic fall from the May
figure represented a full year since the first effects of sharply higher fuel
prices pushed up inflation.
BI said Friday that room for further
monetary easing is "getting limited" and that it would implement
"more cautious" policy in the future, Dow Jones reported.
"Our policy will be directed
toward boosting economic growth and at the same time maintaining macroeconomic
stability," it said in statement.
"It's likely that the economic
growth for the full year will be better than we initially expected," a
statement from the bank said without elaborating. BI had said earlier that the
economy would expand between 3.5% and 4% this year.
Commenting on the cut, acting
Governor Miranda Goeltom said on Friday that the central bank is “confident”
inflation will be below 5% this year. The central bank is monitoring
inflationary pressures that may appear as commodity prices increase next year,
she added, Bloomberg reported.
In June, inflation fell to its
slowest pace in nine years, reflecting lower fuel prices and an easing in food
price increases, the Central Bureau of Statistics (BPS) said Wednesday.
Finance Minister Sri Mulyani, at a lunch with the European
business community on Tuesday, stressed however that the capacity for
The
There were severe implications of the crisis, said
Indrawati, with interest rates at extreme lows and in some cases negative,
where toxic assets were being absorbed.
“If you expect a rapid recovery globally it’s not going to be there.
This is going to take a lot more work,” she said.
While there was agreement at the highest level of global
leadership that protectionism was no answer to the current problems, there
remained a natural tendency to protect one’s own economy, she added.
While there were many predictions of a second global
economic dip,
Next year would be a year of consolidation for many
economies.
In other news,
A yen bond is to be floated in the coming week, with an
agreement with Japan Bank for International Cooperation to guarantee up to $1.5
billion of the yen debt, which will be sold by private placement.
The
Indonesia Stock Exchange’s composite index finished the week at 2,075.30
compared to the week-earlier close of 2,040.19.
The rupiah closed at 10,210 against the dollar compared to 10,270
at the close a week earlier.
Indicators:
|
|
April |
May |
May 09/ May 08 |
Cumulative
2009 |
|
Total exports |
$8.46 billion |
$9.26 billion |
-28.27% |
$49.21 billion |
|
Non-oil & gas exports |
$7.20 billion |
$8.16 billion |
-15.77% |
$35.06 billion |
|
|
May (y-o-y) |
May (m-o-m) |
June (y-o-y) |
June (m-o-m) |
|
Inflation |
6.04% |
0.04% |
3.65% |
0.11% |
|
|
Full year 2006 |
Full year 2007 |
Full
year 2008 |
First
quarter 2009 |
|
GDP growth |
5.5% |
6.3% |
6.1% |
4.4% |
Source: Central Statistics
Agency
BUSINESS BRIEFS
MACROECONOMY
Dollar volatility a threat: Minister
The US dollar is undergoing a period of volatility as it
seeks a new level of stability, putting emerging countries including
At the present time, she said, no alternative was available
for international transactions but at the same time the
Theoretically the dollar should weaken but in the current
conditions, no-one wanted that to happen. There was some support for a greater
balance in the International Monetary Fund’s Special Drawing Rights (SDR) but
the concept had not yet evolved far.
The world is now caught in the question of how to resolve
this and create a better international balance, she said.
The topic of balancing the volatility of the dollar would be
top of the agenda at the global level for some time to come, she warned. The occasion, a lunch with the European
business community, reinforced earlier comments by Indrawati throwing
In an interview with Reuters on June 25, Indrawati said the
growing use of alternative currencies to the US dollar for trade financing in
In March, the government secured a near $15 billion currency
swap with
The swap, which will allow importers to pay for Chinese
goods in yuan instead of dollars, followed moves by
Diversification was also a watchword when managing foreign
exchange reserves, she said.
"All the countries that maintain and own some reserves,
definitely they are going to make sure that their reserves will be put in a
quite diverse portfolio."
She predicted a continuing tough time for Indonesia’s
economy, with growth this year coming it at around 4.3% and possibly a full
percentage point higher in 2010. Second half growth was projected at 4.6%. Consumption
was holding up well and a chart showed government consumption in the first half
far higher at 19% than in 2008.
The perceived default risk on
Indonesia’s debt fell 267.5 basis points last quarter to a level indicating
it’s a safer investment than bonds of Argentina, Ukraine and Iceland, London-based
CMA said in a report.
Those nations, with
Morgan Stanley economists drew
parallels between
“The strengthened political
foundations will accelerate the pace of policy reforms, which together with the
ongoing structural decline in cost of capital and the natural advantage from
demography and commodity resources are likely to unleash
Moody’s Investors Service listed Indonesia’s strengths as “increased political
stability, the containment of budget deficits and an improving external
financial position” on June 12.
The cost of protecting Indonesian
bonds from default for five years fell 330.8 basis points this year and last
traded at 307.5 basis points, CMA prices on Bloomberg show.
Govt. to hold yen bond roadshow:
Source
The government will this week hold a
roadshow in Japan for its first-ever yen-denominated bond and will likely price
the bond within one or two weeks after the roadshow, a person familiar with the
matter said Thursday, Dow Jones reported.
The government has yet to decide the
size of the deal or the tenor of the bonds, but will likely do so ahead of the
roadshow, the person said.
The government has an agreement with Japan Bank for International Cooperation
to guarantee up to $1.5 billion of the yen debt, known as Samurai bonds.
Finance Ministry officials have said they may favor tenors of five or 10 years
- or both - and that the bonds will likely be sold via a private placement
rather than on the open market.
The yen deal will mark the third time this year the government has tapped the
offshore debt market. It previously sold $3 billion of global medium-term notes
and $650 million of global Islamic bonds (sukuk), attracting strong demand from
a variety of investors in both deals.
H2 GDP growth forecast at 4.6% on year
The economy is expected to grow 4.6% in the second half of
2009 from a year ago, Finance Minister Sri Mulyani Indrawati said on Tuesday,
Reuters reported.
The budget deficit is forecast to be Rp2.3 trillion ($225.3
million) in the first half of 2009, while the deficit for the year was still
expected to be 2.5% of GDP, Indrawati told a House of Representatives budget
committee hearing.
Indrawati also said Indonesia had a budget surplus of 0.2%
of GDP as of May 29.
Indrawati said private consumption, the backbone of the
economy, will likely expand 5.8% on year in the January-June period, whereas
government spending will increase 17.7%.
Investment may grow 5.6% in the first half of the year from
the same period last year, she said.
Exports will likely decline 16.7% on year for the same period,
whereas imports will shrink 22.2%.
According to Indrawati, the economy will likely grow 4.1% on
year in the first half of the year and 4.6% in the second half.
Indrawati expects the budget deficit for next year to narrow
to 1.3% of GDP.
Tax revenue for 2009 is projected at Rp577.6 trillion
($56.604 billion) or 98.3% of Rp587.8 trillion set in the economic stimulus
document, Asia Pulse reported Indrawati as telling the meeting.
First quarter tax revenue stood at Rp256.7 trillion,
accounting for 43.7% of the target for 2009.
The lower-than-expected tax revenues were the result of the
global economic slowdown, low imports, a decline in average crude oil prices
and a drop in value-added tax on imports, she said.
Income tax on non-oil and gas commodities would likely reach
Rp290.9 trillion or 103.6% of the target, income tax on oil and gas commodities
Rp49.5 trillion or 127.7% of the target and property tax Rp23.9 trillion or
100% of the target, she said.
Value-added tax and domestic sales tax might reach Rp136.9
trillion or 98.6% of the target and luxury sales tax on imports Rp66.2 trillion
or 69.8% of the target, she said.
Export figures continue low
The
Central Bureau of
Statistics (BPS) said exports in May dropped 28.27% to $9.26 billion from a year
earlier, less than the 29.40% fall forecast by the market, after dropping
22.53% in April, Reuters reported.
Imports slumped 32.68% to $7.85 billion in May from a year
ago, BPS said.
BPS is expected to announce second-quarter and first half
economic data in the middle of August.
2009 capital spending may be lower than targeted
The government’s capital spending will be lower than its
target for this year due to improved efficiency, Finance Minister Sri Mulyani
Indrawati said, Antara reported.
Capital spending in 2009 was projected to reach Rp74.3
trillion compared to Rp79.4 trillion set in the state budget, Indrawati said.
The Rp74.3 trillion capital spending included construction
of roads and bridges worth Rp20.5 trillion, buildings worth Rp14.1 trillion,
machinery and equipment worth Rp19.1 trillion, IT networks worth Rp10.2
trillion and other facilities worth Rp6.2 trillion, she said.
Meanwhile, government spending on subsidies is projected to
surge by up to 129.5% this year due to increasing crude oil prices, she said.
"Subsidies for 2009 are estimated at Rp160 trillion,
well above Rp123.5 trillion in the 209 state budget," she said.
On Monday, Indrawati also told the House of Representatives’
members that the government will not accept overseas loans requiring commitment
fees.
"The National Development Planning Board (Bappenas) has
applied preparedness criteria since 2004. If the projects are not ready, the
government won't take the loans and won't take the money from the state budget
either,” Indrawati said.
Under the current loan management system, the government
could no longer accept overseas loans outside the state budget, she added.
INVESTMENT
Forestry industry expects $1.5B in investment
The forestry industry could see up to Rp15 trillion ($1.5
billion) in investments this year, of which Rp6.1 trillion has already been
realized, a senior Forestry Ministry official said Monday, The Jakarta Post reported.
"Another Rp9 trillion in investment in the sector will
likely be realized later this year and we expect to draw in at least the same
amount next year," Bedjo Santosa, director of production forest
development at the ministry said.
Santosa said 24 investors - mostly local companies, with
others from
Santosa said the ministry had targeted total investment of
Rp50 trillion in the production forest sector in 2008 and 2009. Last year, he
said, total realized investments reached Rp35 trillion.
He said the Forestry Ministry would also approve a number of
investments to develop production forests for food, in the form of sago,
breadfruit and sap trees.
Investment cluster proposed for C.,
E. Java
East and
East Java Investment Board chief
Hary Soegiri said the investment clusters were expected to contribute around 20%
of the provinces' investment realization this year.
The clusters would be developed in
four regencies in the north: Blora and Rembang in Central Java and Bojonegoro
and Tuban in East Java and six regencies in the south: Karanganyar, Wonogiri,
Sragen in Central Java and Pacitan, Ngawi, and Ponorogo in
The clusters would be developed in
various sectors including mining, forestry, seaports, agriculture and tourism,
Soegiri said.
According to the East Java
Investment Board, last year the province had attracted foreign investment worth
a total of $2.5 billion in 93 projects and domestic investment worth Rp20
trillion ($2 billion) in 35 projects.
East Java administration also plans
to develop a southern highway worth Rp4 trillion, connecting eight regencies, Pacitan,
Trenggalek, Tulungagung, Blitar,
On Tuesday, Soegiri said the newly opened Suramadu bridge
connecting
He said the board had since May approved eight foreign and
eight local investors, out of dozens of applicants, to set up businesses in
Madura, adding the companies will start operating within the next four to five
months, Soegiri said.
$153M likely for electronics, IT
industries: Ministry
Five foreign producers of electronic
and information technology products plan to invest around $153 million in
A number of other foreign companies
also plan investment including PT Teco Machinery and Electronic Co from
Volkswagen to invest $140M in first Indonesian plant
Volkswagen AG, Europe’s largest automaker, will spend $140
million in the next two years to build its first factory in
Volkswagen plans to build a factory that can make 50,000
Touran multi-purpose vehicles a year, Lutfi said, adding that the government
will provide tax incentives to Volkswagen.
Making-multi purpose vehicles in
Volkswagen in a May 11 statement said it will use the
Indonesian plant to export to countries in
Volkwagen’s Automobili Lamborghini SpA’s unit opened its
first Indonesian showroom earlier this year. Carmakers in the country sold a
record 607,805 cars last year.
Polish businesses eye
A number of Polish businesses are considering
making
Damian Irzyk, economic affairs chief
at the Polish Embassy in Jakarta, said on Thursday Indonesia was now seen as
being on equal footing with other Asian countries such as Japan, China and
India and as having great potential.
He said there were many sectors that
could be developed in
According to Irzyk, a Polish firm
has invested in coal processing in Kalimantan and Sumatra since 2007, while another
company was studying an investment location for the development of coal business
in
"There will be two more Polish
companies which are expected to operate in
Indonesia’s exports to Poland over
the past two months reached $123 million, ten times Poland`s exports to
Indonesia at $10 million.
STATE CONCERNS
Retail sales may grow below 10%:
Survey
Weakened purchasing power in the
retail sector could dampen demand, so 2009 full-year growth in sales could fall
below 10%, despite double-digit growth since 2003, says a survey, The Jakarta Post reported.
The Neilsen Company said Thursday a
survey showed that the global economic downturn was to blame for the forecast
lower growth for the industry for 2009, although sales in 2008 were not far
short of a strong Rp100 trillion (about $9.8 billion).
"This year is very tough due to
weakening demand. Nielsen's most optimistic prediction is that sales will hit
as high as 10% growth this year," Febby Ramaun, Nielsen Company retail
associate director told a media conference.
Nielsen's survey covered the sales
of 54 top brand grocery products. In five months this year, sales grew 6.5% to
Rp39.8 trillion from the same period last year.
Govt. revises up 2009 rice output forecast
The government is predicting rice production this year to be
higher than earlier estimates, increasing the prospect of a freeze in rice
imports for a second consecutive year, Reuters reported.
The new forecast was also 3.7% higher than the 60.33 million
tons produced in 2008, although below an earlier Agriculture Ministry forecast
of 63.5 million tons.
In its second of three annual crop estimates, the Central
Bureau of Statistics (BPS) said
Improving productivity and a bigger harvest area would help
boost rice output this year, BPS said.
The government is scaling back rice imports after it last
year posted a surplus of over 1.6 million tons, the first in nearly two
decades.
The country is on track to increase its rice surplus this
year but the government has dropped a plan to allow large scale exports citing
a need to secure domestic supplies amid worries over a return of the El Nino
hot weather pattern.
Tourism industry grows 1.69%
The tourism industry grew around 1.69% from January to May,
with foreign tourist arrivals reaching 2.4 million, up 40,098 from the same
period last year, giving optimism that the target for the Visit Indonesia Year
2009 of 6.5 million foreign tourist arrivals would be achieved, Antara reported.
"The global economic crisis has not affected our
tourism very much, particularly tourist arrivals," Director General of Marketing
at the Ministry of Culture and Tourism Sapta Nirwandar said on Friday.
To meet the target various strategic and promotion efforts
have been intensified including sending sales missions, offering cheap tourist
packages and farm trips and increasing promotion through print and electronic
media.
He said the number of tourists from
The number of tourists from other countries such as the
Middle East rose around 42.04%, Europe 10.23% and
He said tourist arrivals from other Asian countries in the
period such as
SOEs
Garuda may resume European flights in 2010
Garuda
It would take nearly nine months for the national flag
carrier to make preparations for flight resumption, Garuda Communications chief
Pujobroto said on Friday.
He said Garuda was still undecided about the types of planes
to resume the European flights.
If all the 10 Boeing 777s ordered by Garuda were to be
delivered in late 2010 or early 2011, non-stop flights could be flown to a
number of European cities, he said.
The European Commission (EC) first imposed a flight ban on
all Indonesian carriers from entering the region, in July 2007 following a
series of fatal accidents.
Comprehensive efforts have since been made to remedy the
safety shortcomings in order to meet the International Civil Aviation
Organization (ICAO) standards.
Adhi Karya secures $42M infrastructure contract
State-owned construction company PT Adhi Karya has secured a
new infrastructure project in
Adhi Karya will build the taxiway at the new international
airport at Kualanamu,
The company will team up with PT Duta Graha Indah to build
the Transport Ministry project with a share split of 65:35, Adhi Karya
secretary Kurnadi Gularso said.
State airport operator PT Angkasa Pura II is expected to
begin operation of the new airport by the end of 2009.
The new airport will replace
State-owned steel producer PT Krakatau Steel’s net profit
for 2008 rose to Rp459.57 billion ($44.7 million) from Rp313.44 billion a year
earlier on higher sales, Dow Jones reported
The company said its sales for the year rose to Rp20.63
trillion from Rp14.84 trillion.
Krakatau Steel said its gross profit increased to Rp2.72
trillion in 2008 from Rp1.77 trillion a year before.
The government is waiting for approval from the House of
Representatives to kick off a plan to sell part of its stake in Krakatau Steel
to the public.
PRIVATE SECTOR
Revenue down, profits may rise: Indomobil
Publicly listed automobile and motorcycle assembler PT
Indomobil Sukses Internasional forecasts its revenue may drop about 18.8% by
the year end on the back of weak purchasing power, The Jakarta Post reported.
Company head Gunadi Sindhuwinata however said net profits
would probably rise due to increased efficiency.
“The economic situation might be better than that of other
countries whose economies contracted in the first quarter this year,” Gunadi
said late last week.
The company’s total revenue is predicted to reach Rp6.65
trillion ($652 million) by the end of the year, significantly down from Rp8.19
trillion last year.
A study from the Association of Indonesian Automotive
Industry (Gaikindo) says car sales will drop from 602,744 units last year to
roughly 400,000 this year.
Gaikindo’s latest report reveals car sales from early
January to the end of May reached 169,462 units with Indomobil selling about
29,000.
Berlian Laju aims for $59M from rights issue
Shareholders of cargo company PT Berlian Laju Tanker
approved a plan by its management to launch a rights issue to raise working
capital, Asia Pulse reported.
Berlian Laju Tanker hopes to raise Rp591.73 billion ($59
million) from the rights issue by selling 1.39 million new shares, company
president Widihardja Tanudjaja said.
Tanudjaja said the company has been encouraged to launch the
rights issue because the market is bullish.
This year the company will receive four new ships, including
three chemical tankers being built in
BANKS
Bank Permata releases BLBI funds to state
Bank Permata, which was formed by a consortium involving the
failed Bank Bali, has finally released to the state Rp546.5 billion ($53.3
million) worth of Bank Indonesia Liquidity Assistance (BLBI) funds stashed in
the bank's escrow account, The Jakarta
Post reported
The deal between the bank and prosecutors from the South
Jakarta Prosecutor's Office was settled after seven hours of negotiations at
the Bank Permata head office Monday.
The fund is linked to two convicted criminals, jailed former
central bank governor Syahril Sabirin and fugitive businessman Joko Soegiarto
Tjandra.
Prosecutors have been trying to seize the money since the
Supreme Court issued its verdict sentencing Sabirin and Tjandra to two years in
prison, declaring the money belonged to the state.
The bank, however, insists it owns the money due to a civil
lawsuit which ruled in favor of Bank Bali.
The lawyer for the bank, Pradjoto, said the money would be
transferred to the Ministry of Finance's account at Bank Indonesia (BI).
Finance Minister Sri Mulyani Indrawati said she did not
expect the fund transfer to cause any issues in the banking sector.
"From a legal perspective, what is important is that
the parties involved acknowledge the Supreme Court's case review decision and
return the money to the state," she said.
Bank Permata is
BRI disburses $2B in new credit to state firms in H1
Bank Rakyat Indonesia (BRI) said it disbursed Rp20 trillion
out of Rp30 trillion ($3 billion) in new credits to other state companies in
the first half of this year, Asia Pulse reported.
Bank BRI president Sofyan Basir said demand for credits was
weak and the bank management was selective in disbursing new credits.
Basir said BRI has pledged new credits to 60 state companies
this year, including those operating in telecommunications, electricity and
cement sectors.
He said all of the credits are syndicated, involving other
major state banks such as Bank Negara
BI grants forex bank status to SBI
Bank
In 2005, SBI acquired a 76% stake in PT Bank Indomonex, and
subsequently changed its name to Bank SBI Indonesia. Currently, the bank has 10
branches and it plans to open 16 more branches in the next 18 months.
Bank Eksekutif, a relatively small bank with a market
capitalization of $6.66 million, has 13 branches and an employee base of 491.
According to Bloomberg , it posted a loss of $3.3 million last year, and a
deposit base of $116.8 million.
POWER
Total, Inpex to sell gas to E. Kalimantan power plant
Total Indonesie and Inpex Corp. will supply 20 million
metric standard cubic meters of gas per day to the Senipah power plant in
Ramli Akhmad, president director of regional
government-owned energy company Perusahaan Daerah Kelistrikan dan Sumber Daya
Energi (PKSDE), said the company will pay $3.5 per million British thermal
units (mmbtu) from 2011 to 2017 and $4.5/mmtu from 2018 to 2031.
PKSDE will build the 80-MW power plant with PT Toba
Sejahtera in August and expects to finish construction in 2011.
Total Indonesie, a unit of
OIL & GAS
Tangguh
loads first LNG to S. Korea
The first
delivery of liquefied natural gas (LNG) from the BP-led Tangguh project in West
Papua is set to depart soon for
"The
cargo has not left yet because they are filling the LNG tanker slowly,"
Evita Legowo, Director General of Oil and Gas at the Energy and Mineral
Resources Ministry, told reporters. She said the cargo could depart on Saturday
night and was going to
Tangguh
has several foreign supply contracts, including a 2.6 million tons per year
(tpy) contract with China National Offshore Oil Corp (CNOOC).
US firm
Sempra Energy also has a 20-year contract to lift 3.6 million tpy with the
right to divert half to customers other than its own terminal in Mexico. The
project also has a supply contract with
Pertamina to handle Banten LNG storage project
State-owned oil and gas company PT Pertamina will proceed to
build a floating LNG receiving terminal in Banten next year on its own, canceling
a plan to partner with its sister company PT PGN on the project, Pertamina
president director Karen Agustiawan said Thursday, Dow Jones reported.
The government proposed the idea in order to expedite the
construction of the facility, Agustiawan told reporters.
The construction of the terminal has hung in the balance as
the two companies failed to reach agreement on technical aspects.
Agustiawan said the Banten terminal will have a capacity of
200 million standard cubic feet per day (mmscfd), and it will start operations
in 2013.
The government has also asked PGN to build a storage
facility in
"For now we've decided to go on our separate ways, but
we open the door for partnership in the future," Agustiawan said.
ExxonMobil sells 20% stake in two
ExxonMobil has sold a 20% stake in two offshore exploration
blocks in Makassar Strait, off Sulawesi, to
ExxonMobil is the operator of the offshore Surumana and
Mandar blocks in the
"Exxon Mobil wants to share the burden of the
exploration," said the official.
Maman Budiman, a senior vice president at ExxonMobil
"Exxon holds an 80% stake now in both Surumana and
Mandar blocks. We are still conducting exploration in both deepwater
blocks," Budiman said.
The government awarded ExxonMobil the exploration rights in
Surumana block in 2006 and the Mandar block in 2007.
ExxonMobil reportedly failed to strike oil in the first
exploration well in the Surumana block.
Pertamina, Arrtu Mega sign deal on DME
State-owned oil and gas company PT Pertamina has signed a
deal to buy dimethyl ether (DME), a methanol derivative, from private local
company PT Arrtu Mega Energie to blend with liquefied petroleum gas (LPG),
Reuters reported.
"The first delivery of DME is expected in 2011,"
Pertamina spokesman Basuki Trikora Putra said.
Christoforus Richard, Arrtu's president director, said the
company would build a DME plant in
The plant is due to come onstream in 2011 and would have a
capacity of around 800,000 tons a year and cost around $200 million, Richard
said.
He said the feedstock of the plant was methanol which could
be sourced domestically or imported.
Arrtu has said previously it planning to build a methanol
plant in Riau to process around 6 million tons of coal a year as feedstock, he
said.
The plant would cost about $1.7 billion to build and would
use coal sourced from state mining firm PT Bukit Asam.
Construction is expected to start in 2010 and the plant, the
country's first such facility, should be commercially operational in 2013.
MINING
Foreign miners must sell 20% of shares: Official
With the implementation of the new mining law, the
government will require foreign shareholders with 100% participating interest
in mining companies to sell at least 20% of their ownership to the central
government, regional government, state enterprises or domestic private
companies, a ministry official said on Monday, The Jakarta Post reported.
The minimum ownership for local partners in all mining firms
is set at 20 % by the new Mining Law.
The obligation will be stipulated in one of the law’s
implementing regulations which are under deliberation by the government,
director for coal and mineral utilization at the Energy and Mineral Resources
Ministry, Bambang Gatot Ariyon, said.
"The new mining law stipulates that foreign
shareholders must divest themselves of their shares in mining companies five
years after production. The implementation regulation will stipulate how big
the required divestment should be. After discussions with stakeholders, we
think 20% is the most acceptable figure for the divestment requirement,"
Ariyon said.
He added the 20% divestment must be done within four years,
meaning that foreign shareholders must sell 5% of their shares each year from
the fifth year until the ninth year of production.
Bumi to start gold mining venture
The company may invest up to $1 billion to develop the gold
mines starting this year until 2013, its president Ari Hudaya said.
The investment value will depend on the size of the reserve,
which is believed to have high quality gold deposit, Hudaya told Investor Daily.
Separately, Bumi senior vice president for investor
relations Dileep Srivastava said an annual $50 million budget would be
allocated to exploration for copper, gold and iron ore mining projects, The Jakarta Post reported.
"Our current view is that copper, gold, iron ore are
likely to add to the company's revenue around 2013," he said in an email on
Friday.
According to the company's 2008 annual report, aside from developing
its coal assets, the company has already been expanding its business into other
non-coal activities including iron ore, gold, copper, oil, gas, zinc and lead.
On Wednesday, Srivastava said Bumi is open to a strategic
partnership in its Australian unit Herald Resources Ltd, Bloomberg reported.
Herald’s management is considering offers to take up equity
in the company or its debt, Srivastava said.
Bumi has also expressed its interest in the Haju coking-coal
mine run by BHP Billiton Ltd., Srivastava said.
Bumi announced in January three coal-related takeovers
valued at Rp6.2 trillion ($605 million).
Medco unit to buy affiliated coal companies
Oil and gas company PT Medco Energi Internasional has signed
an agreement to buy two affiliated coal mining companies effectively controlled
by its founding shareholder, the Panigoro family, for $719,634, the company
said Tuesday, Dow Jones reported.
Medco, through its unit PT Medco Energi Mining
Internasional, will buy PT Duta Tambang Sumber Alam and PT Duta Tambang Rekayasa,
which are both owned by PT Medco Mining.
The acquisition value includes taking on $658,212 in the
target companies' debt, Medco said in a prospectus.
Medco said the acquisitions are aimed at developing its
non-oil business. The takeover targets have a combined annual coal output of
500,000 tons.
Medco Mining is controlled by the Panigoro family, which
also controls Encore International Limited, which has a 60% stake in Encore
Energy Pte. Ltd. The latter owns a 50.7% stake in Medco Energi International.
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[1] This Trade and Investment News is a publication of the Coordinating
Ministry for Economic Affairs of the Republic of Indonesia. Readers are
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