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], 21 July 2009
Highlights
National
·
Clues
from fatal hotel attacks point to Malaysian fugitive Noordin M. Top
·
Government
prepares to fight El Nino effect
Politics
·
Aides
to the president call on political parties to stop lobbying for positions
Terrorism
·
Analysts
say blasts a concern, unlikely to dent business commitment
Security
·
National
Narcotics Agency says drug abuse on the rise
Law & Order
·
Praise
for
·
Health
·
Hotels
ready to protect guests against swine flu
Economy
·
Little
effect on economic prospects from bombs
Business briefs
Macroeconomy
·
First-half
growth comes in at 4.1%, finance minister states
·
Government
to take Samurai debt in stages, look to domestic market
Investment
·
Direct
investment tipped to rise 7.1% next year
·
US
keen to assist with revitalization of rail systems
State concerns
·
Official
outlines plan for production of cheap cars by 2012
SOEs
·
PT
Garuda
·
State
housing developer, mortgage bank may IPO this year
Private sector
·
Improving
sales figures for cars, motorcycles
Banks
·
Second
quarter survey by Bank
Power
·
China
bank loans $293 million for Java power plant
·
State
utility PT PLN cuts use of oil for generation
Oil & gas
·
Gulf
Petroleum eyes $1 billion gasification investment
Mining
·
Minister
calls for SOEs to get priority in Newmont diversification
NATIONAL
Terrorist fugitive implicated in
Investigators were sifting through two bomb-damaged luxury
Indonesian hotels on Saturday, for clues to those behind suicide attacks that
shattered four years of stability, Reuters reported.
Although officials could not say who they believed was
responsible for Friday's attacks, suspicion is pointing toward Jemaah Islamiah
(JI), the radical militant group responsible for a string of deadly attacks
that seemed to end in 2005.
The bombers struck the JW Marriott and Ritz-Carlton, luxury
hotels popular with businessmen and diplomats and considered to be among the
most secure buildings in the capital.
The method, target and type of bombs used in Friday's
attacks immediately raised suspicions of involvement by JI and Noordin M. Top,
the fugitive Malaysian national who heads a particularly violent offshoot of
the network, The Associated Press reported.
While National Police spokesman Maj. Gen. Nanan Soekarna
said they "cannot say for sure whether Noordin M. Top led this
bombing," others were more certain.
"I'm 200% sure this was his work," said Nasir
Abbas, a former JI leader turned police informant who has worked with police on
investigations into Indonesia's last three terrorist attacks.
A police investigator also said on Saturday that Noordin was
the most likely suspect.
Terrorism expert Sidney Jones agreed that the attacks bore
his hallmarks. She told Reuters: “The most important hallmark is the suicide bombing
as a method of attack, and also the targeting of iconic Western symbols - both
of those are associated more with Noordin than with mainstream JI.”
Police told a news conference on Saturday that nine people
were killed and 53 wounded in the blasts, revising a previous death toll after
investigators had found it difficult to identify some victims from the remains.
"Of the dead, we believe that three we haven't yet
identified include the suicide bombers," Foreign Minister Hassan Wirajuda
said earlier.
The casualties included citizens of
The blasts are a severe blow for President Susilo Bambang
Yudhoyono, who was re-elected earlier this month in a landslide victory on the
back of strong growth in
After being rocked by a string of attacks against Westerners
in the first part of the decade,
Questions will now be asked how supposedly tight security
was by-passed.
Police said the bombers had checked into the Marriott as
paying guests on Wednesday and had assembled the bombs in their room. A third
bomb was found and defused in a laptop computer bag on the 18th floor.
"Even as Indonesians are given due credit for all they
have done preventing an attack for four years, they should also carefully
examine what went wrong with security measures and seek a better understanding
of the domestic network that supports terrorism," said the Heritage
Foundation's Walter Lohman.
Authorities in
International reaction to the bombings has been swift.
US President Barack Obama, who spent four years living in
"The president and President Yudhoyono reaffirmed the
close cooperation between the
Lohman said he was confident
"
Govt. readies to fight forest fires, El Nino
President Susilo Bambang Yudhoyono says
Speaking after a limited cabinet meeting on Thursday
afternoon, Yudhoyono said El Nino was predicted to hit the country by the end
of the year and or early next year.
“I met with ministers and state officials in charge of the
issue and discussed El Nino’s possible impacts on our food supply and
resilience,” Yudhoyono told the press.
He said the government, through the Meteorology and
Geophysics Agency (BMG), would continually monitor the development of El Nino,
and was ready with several measures to secure food supplies if the warm ocean
current attacked.
The measures include advancing the planting period and
developing drought-resistant rice seeds, and ensuring that dams and irrigation
systems across the country function well.
State Minister for National Development Planning Paskah
Suzetta told Antara that El Niño would raise the state budget deficit by 1.5%
to 1.7%.
WWF Indonesia and Forest Watch
“The Malaysian government has offered aid to tackle the smog
and forest fires, and we’ve accepted the offer,” said Syaid Nurjaya, the head
of the Riau Forestry Agency.
A number of other countries, including the
A special US Armed Forces team is scheduled to hold a joint
training session on extinguishing peat land fires with
POLITICS
Stop the jostling, allies of SBY told
Political parties that supported President Susilo Bambang
Yudhoyono’s re-election are being told to calm down amid increasingly rabid and
public jockeying for cabinet seats, The
Jakarta Globe reported.
One of the most intense battles appears to involve the
Prosperous Justice Party (PKS), which on Thursday publicly called on the Golkar
Party to join the opposition in the legislature and end its attempts to squeeze
into the ruling coalition.
This comes after the president issued a statement saying he
hadn’t even started arranging the composition of the cabinet for his second
term.
Senior Democratic Party leader Anas Urbaningrum called on
parties in Yudhoyono’s coalition to cool down in discussing the ministerial
posts, saying the president was determined to create “an ideal cabinet”.
“The elected president has an opportunity to appoint cabinet
members from any party,” Urbaningrum said. “The party coalition will surely be
respected, but it does not mean the door is closed to parties outside the
coalition.”
The Islam-based PKS, which has three seats in the outgoing
cabinet and backed Yudhoyono’s campaign, said Golkar should accept the
consequences of running Vice President Jusuf Kalla as its candidate.
“It would be better if Golkar served in the opposition for
the sake of checks and balances in the House,” PKS member Zulkieflimansyah said
on Thursday, denying accusations the party was worried it might not get many
posts in the next cabinet.
Political analysts said that even if Golkar wasn’t in the
coalition, the Democrats still needed the nationalist party and its grassroots
political machine to help run the country and provide balance against
Islam-based parties like PKS and PAN.
TERRORISM
Attacks rattle expats, foreign firms heighten security
Most foreign businesses in
"This country is powering ahead. Executives know that
if they pull out because of perceived risks they will miss opportunities that
others will capitalize on," said prominent expat businessman Geoffrey
Gold.
He believes, despite foreigners' outrage at the latest
bombings, that company executives know they need to stay in
Australian businessman Peter Fanning, a lawyer who has
advised many of the Australian companies now operating in
SECURITY
Drug trafficking, abuse on the rise: Agency
Bucking regional trends, a rising trend of trafficking and
abuse of narcotics in
National Narcotics Agency (BNN) acting head Comr. Gen.
Gories Mere warned of the trend during a seminar in Makassar,
"Several Asia-Pacific countries, such as
He added there were now between 3.1 million and 3.6 million
drug users in the country, or about 2% of the total population.
There has been an increase over the last five years, Mere
said. In 2004, drug users numbered between 2.7 million and 3.2 million people,
or 1.5% of the population.
The growing number of drug addicts, especially injection
drug users (IDU), has also triggered the rising number of people contracting
HIV/AIDS in the country.
Mere said that along with rising drug abuse, drug
trafficking was also flourishing. The drugs available in
"
Police have been clamping down on drug producers since 2004,
but with little effect, he added.
This year police have raided four drug factories in Depok,
West Java, and West Jakarta, Tanjung Priok and Pondok Indah, in
In the latest incident, two Iranian nationals were arrested
at Soekarno-Hatta International Airport in Tangerang, Banten in possession of 4
kg of crystal methamphetamine worth Rp4 billion (about $400,000) on Thursday.
Customs and Excise officials said they discovered the
narcotics when the suspects began acting suspiciously during a routine luggage
scan, reported Viva News.
The drugs were hidden in the suspects’ carry-on luggage
inside packages of powdered milk, officials said.
Papua:
Gunshots were fired at a convoy of logistics vehicles near a
massive gold mine operated by PT Freeport in Papua on Friday while a government
minister said there may have been foreign involvement in a spate of deadly
attacks and shooting in the same location, Agence France-Presse reported.
The convoy came under fire near Mile 49 between Timika and
Tembagapura. No casualties were reported.
In
The attacks by unidentified gunmen near
"What I think is don't let
LAW & ORDER
Piracy down In
The latest global piracy report has given high marks to
Indonesia and the Malacca Strait, where there were only five attacks over six months,
compared with 70 five years ago, The
Straits Times reported.
That plunge contrasted sharply with worldwide figures, which
showed pirate attacks going up from 182 in 2004 to 240 this year.
For the region, however, the South China Sea passage flanked
by Pulau Tioman off
Seven attacks were reported in the area in the first six
months of the year, compared with none in the whole of last year.
In its January-June 2009 report card, London-based ICC
International Maritime Bureau singled out Indonesians for their “continuing
efforts to bring piracy and armed robbery down in their waters'”.
There were more attacks reported in Malaysian waters than in
Indonesian waters for the first time in five years, it noted.
Captain Noel Choong, head of the bureau's Piracy Reporting
Centre in Kuala Lumpur, said the figures would have been unbelievable five
years ago.
He added that the situation in the
Australian Home Affairs Minister Brendan O'Connor and
The commitment is aimed at stamping out illegal foreign
fishing activities and boost security in the two countries’ shared maritime
border, O'Connor said.
"(It) affirms our shared commitment of combating the
threat of illegal fishing," he said in a statement.
"We've had problems in the past where we've had to
apprehend fishers. That may continue, of course, but with the close cooperation
of the Indonesian authorities we can reduce the need to apprehend and detain
poachers,” O'Connor said.
Since 2007,
HEALTH
Hotels to provide masks, Tamiflu over swine flu
The rapid spread of the H1N1 flu across
Hotels and restaurants on
The
Bali PHRI secretary Perry Markus said hotels and restaurants
on the island could procure the Tamiflu pills and surgical masks from the
nearest community health centers and the provincial health office.
"We're on high alert, because
He also called on hotels to set up in-house clinics and
ensure doctors were ready to treat guests exhibiting flu-like symptoms.
In
"Hotel employees have been trained on how to deal with
suspected H1N1 patients," Novotel Hotel Bandung manager Engkun Kurnia said
Thursday, reported Antara.
The Health Ministry confirmed 15 new H1N1 cases on Friday,
bringing the total number of cases in the country to 157, Kompas reported.
The cases are concentrated in
Many of the patients contracted the virus after visiting
Head of the Indonesian Red Cross (PMI), Lita Sarana, said the
organization will cooperate with the Health Ministry to conduct swine flu
awareness campaigns across the country to mitigate H1N1 outbreaks.
In
ECONOMY
Bombings have little impact on
economy: Analysts
The
latest bombings at the Ritz Carlton and JW Marriott hotels in
While the
blasts may hurt investor confidence in the short run, market observers noted
that the longer term view is still bullish as fundamentals are in place for
growth.
This
includes surprise GDP growth in the first quarter of 2009, a positive outlook
by ratings agencies on its sovereign rating, and an investor-friendly outcome
from recent elections.
The
positive outlook assigned by Moody's Investors Service on
"I
find it very hard to see a wider or deeper impact on overall political
stability or even on the economic outlook," said Aninda Mitra, Moody's
primary analyst for
“I don't
think that really changes anything. These kinds of incidents can and have
happened anywhere so there's nothing unique about
“Terrorist
threats in
“While tourism and general retail and travel-related
activities could be affected by the latest events, we expect the impact to be
temporary,” said Chua.
Accor SA, Europe’s biggest hotelier and operator of 37
hotels in
The Paris-based company, which has 11 hotels in
“Global factors are still in favor of
“Global
factors are still in favor of Indonesia: pessimism over the US economy is
receding, encouraging global investors to re-enter emerging markets, including
Indonesia," Standard Chartered economist Eric Sugandi told Dow Jones
Newswires.
The
rupiah declined the most in two weeks and hotel stocks slumped after bombings.
The
rupiah slid 0.6% to close the day on Friday at Rp10,185 to the US dollar,
compared to the close of 10,190 a week earlier. The currency reached 10,075 on
Thursday.
Commenting
on the potential for further weakness in the rupiah, Peter Redward, head of
emerging Asia research at Barclays Plc in
On the
stock market, the Jakarta Composite Index lost 0.55% to 2,106.35, compared to
2,063.09 a week earlier.
"Obviously
the blasts today have dragged down the index. The markets in the region have
gone up," Ciptadana Securities analyst Syaiful Adrian told Agence
France-Presse.
The cost
of protecting
“There
could well be a knee-jerk impact,” said Hugh Young, Asian managing director for
Aberdeen Asset Management Plc. “Things like this are always a worry but one
learns to live with it.”
“The
weakness will be short-lived,” said Tim Condon, chief Asia economist at ING
Groep NV in
BUSINESS BRIEFS
MACROECONOMY
H1 economic growth 4.1%, inflation 3.65%: Minister
Indrawati told the House of Representative’s financial
affairs committee that economic growth will likely expand by 4.6% in the second
half of the year, and inflation will likely accelerate to 4.5%.
She didn't give a forecast for full-year growth. However she
said last month that full-year growth may be 4.3%.
According to Indrawati, the budget deficit in the first half
of the year was equal to 0.2% of gross domestic product. She said the
government forecasts a deficit of Rp127.4 trillion ($12.4 billion) in the
second half of the year.
Government revenue is forecast at Rp505.4 trillion in the
second half, and government spending at Rp632.8 trillion, she said.
The Indonesia Crude Price averaged $51.60 a barrel in the
first half. The ICP will likely average $70/barrel during the second half, she
said.
Short-term Sertifikat Bank
The dollar averaged Rp11,082 against the rupiah during the
first half and will likely average Rp10,000 during the second half, she said.
Indrawati's forecasts represent official finance ministry figures that will be
used to calculate the state budget.
Indrawati also said on Thursday that in 2010 the budget
deficit is forecast at 1.5-1.8% of GDP in a bid to provide stimulus to the
economy.
Govt.
eyes local debt after samurai bond
The
government is considering tapping the local debt market for funding after it
issued a smaller-than-expected yen-denominated bond, a Finance Ministry
official said on Friday, Reuters reported.
The 35
billion yen ($374 million) bond was relatively small because
Of the Samurai bond, Waluyanto told reporters that "the
yields will likely be much lower," adding that the funds will be used to
pay off yen-denominated debt.
The government has signed a deal with the Japan Bank for
International Cooperation (JBIC) to guarantee up to $1.5 billion of the planned
Samurai yen-denominated bonds sold in
The Finance Ministry has said it plans to issue the full
amount by next year, but may do so in several issuances, depending on market
conditions. It also has said the Samurai will likely carry tenors of five or 10
years, or both.
The Samurai bonds will have a triple-A rating thanks to the
JBIC guarantee, Dow Jones reported.
INVESTMENT
Direct
investment forecast to grow 7.1% in 2010
The
government predicted the country's direct investments would grow 7.1% next year,
lower than this year's prediction of 7.4% and 11.8% in 2008, Asia Pulse
reported on Friday.
The value
of direct investment should be able to expand by at least 10% but it would be
difficult with the global economic crisis, Finance Minister and Coordinating
Minister for the Economy Sri Mulyani Indrawati said.
On
Tuesday, chief of the Coordinating Investment Board Muhammad Lutfi reduced the
investment growth target to between 9.7% and 10.2% this year from 11% previously
set for both foreign and domestic investment.
In 2008,
realization of investment reached $17.13 billion, up 20.5% from the previous
year.
He said in the second half of the year, foreign direct
investment may rise 6% and domestic investment 20%, with total investment worth
around $7.3 billion compared with $4.5 billion in the first half, Dow Jones
reported.
US explores Indonesia train revitalization project
The US government is exploring chances to assist in the
revitalization of Indonesia's trains with a $20 billion 10-year loan to run
from 2010 to 2020, an official was quoted as saying on Tuesday, Xinhua reported.
The Transportation Ministry's Director General for Railways,
Tundjung Inderawan, said US ambassador to Indonesia Cameron Hume has invited
him to discuss projects that should be carried out during the revitalization.
Tundjung said US company General Electric (GE)
Transportation would strengthen its penetration in the country by providing
locomotives.
"One of the loan proposals for projects from GE
Transportation has not been processed. However it is in the blue book of the
National Development Planning Agency," he said, referring to the list that
includes foreign loan or grant plans for the middle-term.
The chief executive officer of GE Transportation Lorenzo
Simonelli was scheduled to sign a memorandum of understanding with PT Kereta
Api, the government-run train company, this week in relation to the purchase of
20 locomotive units and leasing of 100 new locomotive units worth $40 million, Bisnis Indonesia reported.
Capital Market Law draft near completion: Bapepam
The Capital Market and Financial Institution Supervisory
Agency (Bapepam-LK) has almost finalized its draft of a bill to amend the 1995
Capital Markets Law, which is to be submitted to the House of Representatives
for deliberation, The Jakarta Globe reported.
“The revisions are 90% ready,” Bapepam chairman Fuad
Rachmany said on Tuesday. The issues covered include demutualization and
immunity for regulators for actions undertaken in the course of their duties.
The amendments are needed to allow the demutualization of
the Indonesia Stock Exchange (IDX) to go ahead, a key step forward in the
bourse’s plans to go public. As per the current legislation, the IDX is owned by
119 securities houses, each of which has an equal voting right.
The demutualization plan would allow the exchange to raise
funds from the public to press ahead with its modernization program and help
expand the domestic capital market, and is in line with the trend among bourses
around the world.
The proposed amendments would provide immunity from legal
action for regulators with respect to bona fide actions taken in the course of
their work.
“Immunity does not mean we’re above the law, but it will make
our job much easier,” Rachmany said, adding that the measure would
significantly ease the agency’s investigative process.
Regarding the establishment of a proposed financial services
authority to take over the regulatory powers of Bapepam and the central bank,
part of the package of bills to be submitted to the new House, Rachmany said
more work was needed.
STATE CONCERNS
Govt.
hopes to produce cheap cars in 2012
The
government will launch a program to produce low-cost cars in the next two
years, the Industry Ministry said, Asia Pulse reported.
The
national cars will come in two levels - one with prices from Rp60 million
($6,000) to Rp70 million and another at Rp40 million to Rp50 million, said Director
General of Transport Equipment Budi Darmadi.
Under the
program, the ministry hopes that the country's production capacity would
increase by 200,000 units a year.
The
Indonesian Chamber of Commerce and Industry (Kadin) should include the low-cost
car program in its industrial roadmap to be in line with the government program,
Darmadi said.
Darmadi
said his office is preparing a draft proposal for incentives acceptable to the
government to boost production of low-cost cars expected to start in 2012.
He said
he hopes to receive inputs especially from automotive industrialists on the
incentives before the proposal is submitted to the government.
Govt. plants 4.3M hectares of timber estates
The government has planted 4.3 million hectares of
industrial timber estates (HTI) so far out of its target of 5 million hectares
by the end of this year, the Forestry Ministry said, Asia Pulse reported.
Forestry Minister MS Kaban said expansion of HTI to more
than 5 million hectares would be completed before 2014.
The government has launched the HTI program to grow
industrial tree species to feed timber processing industries to preserve the
country's tropical forests.
Director of Plantation Forest Development Bedjo Santoso said
investment in HTI projects in 23 provinces since last year has reached Rp24
trillion ($2.4 billion).
Santoso said tree cutting in natural forests would be much
reduced after the HTI target has been reached, adding the 5 million hectares
would be able to meet demand for raw material from timber processing
industries.
So far most HTI projects have been grown with acacia trees
mainly for the plywood and paper industries.
Advertising
spending to increase in H2: Survey
The
outlook for advertising spending is bullish in Indonesia, with advertising
revenue expected to increase in the latter of half of 2009, a survey shows, The Jakarta Globe reported.
However, the
survey by Nielsen Media Indonesia also showed that print media penetration as a
percentage of the population in Indonesia has been declining over the past four
years.
The
penetration of broadsheet newspapers declined from 28% to 19% from the first
quarter of 2005 to the second quarter of this year. Magazine penetration has
also dropped, from 18% in the fourth quarter of 2007 to 12% in the second
quarter of 2009.
Television
still dominates spending in Indonesia, but newspaper advertising revenue has
been eating away at TV’s share in recent years, Nielsen said.
TV
accounted for 59% of ad revenues in the first half of 2008, down from a peak of
70% in the first half of 2005.
Newspaper
market share rose to 37% in the first half of this year; newspapers had only a
25% share in the same period for 2000.
Advertising
spending in the third quarter could reach over Rp12 trillion, according to
Nielsen, up from Rp11.68 trillion in the second quarter. Last year’s third
quarter spending was Rp11.91 trillion.
Advertising
spending increased in the first half over the previous year, continuing recent
trends. The Rp22.03 trillion spent in the first half of 2009 was up by 12.65%
over the same period last year.
“The
overall pattern has been repeated since 2004, where every year the third
quarter has been the highest advertising spending quarter,” largely due to the
Idul Fitri celebrations, said Ika Jatmikasari, associate director of Nielsen
Media Indonesia client services.
In the
first half of this year, Nielsen said government and political spending rose
173% to Rp2.154 trillion, largely due to elections.
SOEs
Garuda launches expansion plan after ban lifted
State-owned airline Garuda Indonesia plans to start flying
to Europe next year and take other steps to expand its operations after the
European Union lifted a two-year ban on four Indonesian carriers in response to
the country's efforts to improve safety standards, The Wall Street Journal Asia reported.
Emirsyah Satar, the chief executive of Garuda Indonesia,
said Garuda would fly first to Amsterdam in the first half of 2010 and would
look at other destinations in Europe after that.
As part of its planned expansion - which will double its fleet
to 116 aircraft in the next five years, including larger Boeing 777s and Airbus
330-200s - Garuda is also interested in flying to the US, which it doesn't
currently serve, Satar said.
This year, Garuda plans to fly 18 new routes domestically
and internationally, including from Jakarta to Melbourne, Sydney and Shanghai.
Since taking the helm, Satar has overhauled loss-making
Garuda to make it more efficient. Last year, net profit was Rp670 billion ($66
million), up 10 times from 2007, due to higher sales and an effort to weed out
corruption in the awarding of contracts, Satar said.
The carrier expects to conclude a $760 million debt
restructuring with creditors by September, he said.
The House of Representatives last year agreed to sell a
minority stake in Garuda through an initial public offering to raise cash. Satar
said he thought Garuda might sell a 15%-20% stake in the first half of 2010.
On Tuesday, the European Union lifted a flight ban on Garuda
and three other Indonesian operators -- Mandala Airlines, a low-cost carrier
that is controlled by US private equity firm Indigo Partners; cargo operator
PremiAir; and Airfast, which runs charter flights.
State developer, BTN may launch IPOs this year
State-owned housing construction company PT Pembangunan
Perumahan (PP) and PT Bank Tabungan Negara (BTN) are expected to launch initial
public offerings (IPO) toward the end of this year, Asia Pulse reported.
The two state companies would be listed on the Indonesian
Stock Exchange (IDX) before the close of the year if the market condition was
favorable, State Minister for State Enterprises Sofyan Djalil said.
Initally the government hoped to see at least 10 state
companies go public this year but now only BTN and PP were likely to be allowed
to list this year, Djalil said.
Ito Warsito, new president of the IDX, said now was the
right time for infrastructure, finance and mining companies to go public with
interest rate cuts likely to attract investors to the market.
Telkom
eyes bigger stake in Malaysia’s Scicom
State-owned
telecommunications company PT Telkom said it wants to become the majority
shareholder in Scicom Berhad Malaysia, raising its stake to more than 50%, Asia
Pulse reported.
Telkom president
Rinaldi Firmansyah, however, said there have been no official talks with
Scicom, which operates in business process outsourcing.
Telkom
already has a 10% stake in Scicom acquired from the Kuala Lumpur Stock Exchange
by its subsidiary PT Telekomunikasi Indonesia Internasional.
Firmansyah
said Telkom would likely use only around 85% of its capital spending of $2.5
billion set for this year as the price of telecommunications equipment has
declined.
PRIVATE SECTOR
June car sales up 10% on month
Domestic car sales rose 10% month-on-month in June to 39,567
units compared with 35,818 in May, an official at the Association of Indonesian
Automotive Manufacturers (Gaikindo) said on Tuesday, The Jakarta Globe reported.
“It is easier to buy cars now as the economy is recovering,”
Gaikindo chairman Bambang Trisulo said, noting that domestic consumption had
risen as inflation and interest rates had fallen.
However, sales in June were 27% below the year-earlier
period, when 54,707 units were sold.
In the first half of this year, sales totaled 210,246 units,
compared with 292,670 units in the first half of last year, the association’s
data showed.
Meanwhile data from the Industry Ministry show the country’s
motorcycle production in the year ended May stood at 2,078,774 units of which
2,061,685 units were sold at home. While no comparative figures were released,
the motorcycle market is experiencing a similar upswing in line with the
four-wheel market, Asia Pulse reported.
Increased local content for Volkswagen car
PT Garuda Mataram Motor (GMM), the sole agent of Volkswagen
(VW) in Indonesia, said it will increase the local content for its multi
purpose vehicle (MPV), VW Touran, Asia Pulse reported.
By using higher local content the family van could be sold
20% cheaper than its present price of Rp400 million ($40,000) per unit.
GMM sales manager Jonas Chendana said a price adjustment
could be made if the rupiah remained stable against the euro and the US dollar.
Expected stronger rupiah stability next year should allow a
price cut, Chendana said.
This year the company hopes to sell at least 100 units of VW
Touran, launched in the country in May.
Blackberry service centers by August: Official
Blackberry customers in Indonesia should be able to enjoy
after-sales services from the smartphone producer, Research in Motion (RIM), by
the end of August, the telecommunication authority says, The Jakarta Post reported.
"They're planning to open six service centers and
another two in October," said Post and Telecommunications Directorate
spokesman Gatot S. Dewa Broto, after a meeting with RIM officials and Canadian
Ambassador to Indonesia John T. Holmes.
The directorate earlier on Tuesday threatened RIM that it
would postpone certification of RIM products unless the company made service
centers available by August 21. Previously, the government set a July 16
deadline for the company to open local service centers.
The telecommunication authority agreed to backtrack on its
decision to freeze already-issued certificates. However certification of new
models would be frozen until the service operations had opened for business.
Broto brushed off suggestions that the ministry was being
soft on RIM, saying the company had shown "a clear willingness to comply
with the regulations."
Astra Agro posts earnings drop despite sales rise
Palm oil producer PT Astra Agro Lestari estimated a 26%
decline in earnings to Rp3.41 trillion ($341 million) in the first half of the
year despite an increase in sales volume, Asia Pulse reported.
The publicly traded agribusiness company sold 494,018 tons
of crude palm oil (CPO) in the first half of this year, up from 476,909 tons,
valued at Rp4.64 trillion, company spokesman Tjahyo Dwi Arianto said.
Prices fell to an average of Rp6,386 per kg in the first six
months of this year from Rp8,299 per kg in the same period last year.
Hero gets approval for $60M loan for store expansion
PT Hero Supermarket secured approval from shareholders at an
extraordinary general shareholders meeting on Friday to take $60 million in
standby loans to finance land acquisitions and other store expansion efforts, The Jakarta Globe reported.
“We will acquire two pieces of land in the Bintaro and Bumi
Serpong Damai [BSD] areas, for Rp191 billion ($19 million) and Rp202 billion,
respectively, where we will build two new Giant hypermarkets,” said John
Callaghan, the company’s president director.
He said the company had added four new Giant superstores
since March.
The transaction for the loans came from the company’s major
shareholder, Dutch company Mulgrave, a holding company owned by Dairy Farm, a
Hong Kong-based retailer that has significant positions in several Asian
countries.
Mulgrave controls 69.7% of Hero and PT Hero Pusaka Sejati
has a 27.2% interest, with the public holding the balance.
In the first quarter, Hero booked Rp1.52 trillion in
revenue, up by 13.1% from the year-earlier period. Profit rose 22.5% to Rp32
billion, while earnings before interest, tax, depreciation and amortization
(Ebitda) rose 28.2% to Rp87 billion.
As of March, Hero managed 436 stores, comprised of 28 Giant
hypermarkets, 55 Giant supermarkets, 51 Hero supermarkets, 181 Guardian Health
and Beauty stores and 121 Starmart Convenience Stores. In December, Hero
managed 398 stores, and had 389 stores as of March 2008.
BANKS
Bankers bullish on Indonesia: BI
Domestic bankers have a positive perception of the country's
credit and liquidity risks, implying faster falls in interest rates, a second
quarter survey by Bank Indonesia (BI) revealed, Xinhua reported.
The survey showed the bankers predicted that interest rates
for working capital loans would be at 11.64% by the end of 2009, compared with
12.75% in a similar survey conducted in the first quarter.
Tony Prasentiantono, head economist at Bank BNI, said that
almost all economic indicators in the second quarter were better compared to
the previous one. The data on inflation, economic growth and forex reserves
kept showing positive development.
He added that economic players were more optimistic
following the peaceful presidential election, Kompas reported.
Danamon, BNI report profits, loan growth
PT Bank Danamon and state-owned PT Bank Negara Indonesia
(BNI) on Thursday reported profits for the second quarter, Reuters reported.
Danamon’s second-quarter net profit fell 20% to Rp477
billion ($47.25 million) from Rp595.3 billion a year ago, due to the high cost
of funds and credit, president director Sebastian Paredes said.
Net interest income in the second quarter climbed 25% to
Rp2.345 trillion from Rp1.88 trillion a year earlier.
The lender reported a gross non-performing loan (NPL) ratio
of 3.5% in the January-June period, compared to 2.3% a year ago.
BNI, the fourth-largest lender, said net profit doubled in
the second quarter but it revised its loan growth target for 2009 down to 14%,
from a previous forecast of 16-18%, saying that first-quarter lending was not
as high as expected.
"In the first quarter we did not see a pick up in
lending so we take a more conservative figure of 14% until the end of
2009," said president director Gatot Suwondo.
Meanwhile, Bimo Epyanto, an assistant to Bank Indonesia’s
board of governors, said on Thursday that loans will gradually post higher
growth in the coming months without sacrificing quality, The Jakarta Post reported.
Bank loan growth of around 15% is a "reasonable"
level to support economic growth, he said.
BNI explores cooperation with Mideast banks
State-owned Bank Negara Indonesia (BNI) is exploring
cooperation possibilities with banks from the Middle East, vice president
director Felia Salim said on Tuesday, Asia Pulse reported.
"The form of cooperation is still being discussed from
various aspects," Salim said without citing any banks BNI had approached.
BNI is meanwhile still processing a cooperation program with
the Islamic Corporation for the
Development of the Private Sector (ICD), a subsidiary of the Islamic
Development Bank (IDB), to set up a shariah bank from a spin-off BNI shariah
unit.
BNI expects the spin-off of its shariah unit with a capital
of Rp500 billion ($49 million) to finish this year so that ICD could
immediately invest in it.
Several investors from the Middle East were reported early
this year to be entering the banking sector in the country including QIB from
Qatar and Kuwait Investment House.
However, the director of shariah banking at Bank Indonesia,
Ramzi A Zuhdi, believed the Middle Eastern investors would not enter this year
because of the impact of the world financial crisis.
BRI
eyes acquiring Bank Bukopin
State-owned
Bank Rakyat Indonesia (BRI) is eyeing PT Bank Bukopin, BRI director Bambang
Supeno said, Asia Pulse reported on Thursday.
There have
been no official talks with Bukopin, but BRI is optimistic the process would go
smoothly, Supeno said, adding that a decision would be made after a new cabinet
was formed following last week's presidential election.
BRI chief
commissioner Bunasor Sanim said the bank management had proposed the plan to
acquire Bukopin to its board of commissioners.
BRI
failed in its attempt to acquire Bank Tabungan Negara (BTN), another state
bank, when the plan was rejected by the House of Representatives.
POWER
China bank extends $293M loan to PLN
The Export Import Bank of China has agreed to provide state
power company PT PLN with another loan amounting to $293.23 million for a power
plant project in Pacitan, East Java, The
Jakarta Post reported.
The power plant is under the PLN's 10,000 MW electricity
development program, company president director Fahmi Mochtar told reporters
Friday after signing the loan agreement with the bank’s vice president Zhu
Xingiang.
"With the latest loan from the Export Import Bank of
China, eight of 10 sites across Java have secured financial commitment,"
Mochtar said.
The construction of the 10,000 MW project power plants is
valued at $4.8 billion. The Export Import Bank of China has so far committed to
providing $2.8 billion.
PLN reduces oil fuel use by 25% in H1
State power company PT PLN has succeeded in reducing its
dependence on oil fuel by 25% in the first half of this year, its president
said, Asia Pulse reported.
PLN used only 4.5 million kl of oil fuel in the first six
months of this year from around six million kl in the same period last year,
Fahmi Mochtar said.
Mochtar said PLN could save oil fuel mainly due to success
in the gasification program, adding hydropower and geothermal power also have
had a significant contribution.
PLN spokesman Nasri Sebayang said the company saved around
Rp6 trillion ($600 million) with the diversification of fuels.
Shenhua unit starts work on S. Sumatra power project
China Shenhua Guohau Power Co., a unit of China’s biggest
coal producer, started construction of a power plant and mine in South Sumatra
this month, Bloomberg reported.
Building began on the site on July 7 and is due for
completion in 2011, parent Shenhua Group Corp. said in a statement on its web
site.
The mine will produce about 1.5 million metric tons of coal
a year, Shenhua, said.
Shenhua said in January last year the project was due to be
completed in 2010. The 300 MW power station is the coal-producer’s first
electricity generating project outside China.
OIL & GAS
Gulf Petroleum to invest in $1B gasification project
Priamanaya Group and Gulf Petroleum from Qatar will develop
synthetic gas from coal in Lahat, South Sumatra, a report said on Tuesday, Asia
Pulse reported.
The feasibility study of the project will be carried out
towards the end of this year, Susilo Djiwantoro, Priamanaya chief executive,
said.
Djiwantoro said Gulf Petroleum will hold the majority share
of 80% and Priamanaya, which has a coal mine in Lahat, will hold 20%.
The coal gasification project will cost at least $1 billion,
he said, Bisnis Indonesia reported.
Australian Energy World to invest $720M in S. Sulawesi
Australian investor Energy World Corp. plans to spend $720
million in new projects in South Sulawesi including in the Sengkang gas field,
which is integrated with a power plant, Asia Pulse reported.
Energy World already invested $200 million in the Sengkang
project including a 190-MW gas fired power plant, chief of the Investment
Coordinating Board (BKPM) Muhammad Lutfi said.
The company wants to expand the capacity of the power plant
to 320 MW with an additional investment of $130 million, Lutfi added.
It also plans to build a liquefied natural gas plant with a
capacity of 2 million tons a year to cost around $590 million, he said.
MINING
Prioritize Newmont
stake sale to SOEs: Minister
The State Ministry for State Enterprises on Friday has
summoned the directors of state-owned nickel and gold miner PT Aneka Tambang
for discussions on taking the 14% stake that US-based Newmont Mining is
required to divest, The Jakarta Globe
reported.
The ministry will also send another letter to the Finance
Ministry on Monday to ask for state firms to be given first option. The State
Enterprises Ministry had sent a letter in May asking for priority to be given
to state enterprises, but the Finance Ministry gave no commitment at the time.
“If the (president) gives the nod, then our companies will
talk directly to Newmont,” said State Minister for State Enterprises Sofyan
Djalil.
Energy and Mineral Resources Minister Purnomo Yusgiantoro
said on Thursday the government and Newmont Mining Corp. have agreed to value
PT Newmont Nusa Tenggara's (NNT) assets at $3.52 billion, Reuters reported.
On Wednesday, deputy at the Coordinating Economics Ministry
Wimpy Tjejep told reporters the Finance Ministry may choose to buy the stakes
in PT NNT outright or designate other parties to buy the stakes.
The government will decide within the next two weeks who
will buy stakes in the unit, Tjejep said, but didn't specify how much of PT NNT
will be bought.
The government has said previously it aims to buy 21% of PT
NNT, comprised of stakes scheduled for divestiture to local buyers between 2006
and next year.
At least five potential buyers have expressed an interest in
the PT NNT stake, including a consortium of three local governments from West
Nusa Tenggara backed by PT Multicapital, which is a subsidiary of Bumi
Resources.
State-owned enterprises, including miners PT Aneka Tambang,
PT Tambang Batubara Bukit Asam and PT Timah have also expressed interest.
PT Pukuafu Indah, an Indonesian mining group, previously
bought 20% of the unit, while Newmont and Japan's Sumitomo Corp own 45% and 35%
respectively.
June tin exports seen up 59%
Indonesia's refined tin exports are estimated at 8,661.2
tons in June, up 59% from 5,461 tons in the same period a year ago, the Trade
Ministry said on Tuesday, Reuters reported.
Refined tin exports for the period January-June amounted to
50,575.2 tons, up 9.2% from 46,321.54 tons in the same period last year.
About 78% of the country’s tin exported in June was shipped
to Singapore, while the remainder went to Malaysia, China, Japan, India, Hong
Kong, Taiwan, South Korea and the Netherlands, an official at the ministry said
without elaborating further.
Indonesian firms win Philippine coal contracts
Philippine electricity producer National Power Corp
(Napocor) has awarded contracts to two Indonesian firms for 195,000 tons of
coal, a senior official said on Monday, Reuters reported.
One lot of 65,000 tons was awarded to PT Delta Mineral
International at $79 per ton, said Edmund Anguluan, head of the state utility's
bidding committee. PT Trubaindo will supply two lots of 65,000 tons each, with
one priced at $80.93 per ton and the other at $81.03 a ton.
Napocor was hoping to source a total of 390,000 tons of coal
for its Pagbilao power plant at the July 1 tender but only managed to award
contracts for half of that volume. It had set a budget of $81.08 per ton for
the coal scheduled for delivery between October and December.
Anguluan said the firm is planning a re-tender by the end of
the month to secure the remaining 195,000 tons.
Another tender for 195,000 tons steam coal for its Sual
plant was declared a failure after a lone bidder withdrew after failing to
comply with Napocor's requirements, said Anguluan.
Napocor
earlier gave the lone bidder, also PT Delta Mineral, more time to sort out its
bid.
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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
welcomed to forward it in its original form but no reproduction is allowed
without permission.