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], 27 July 2009
Highlights
National
·
Environment
ministry plans new legislation to stop seasonal fires
Politics
·
Susilo
Bambang Yudhoyono and Boediono elected, says commission
Terrorism
·
Police
mount intensive manhunt after bombings
Security
·
Authorities
to check IDs of new residents in crowded neighborhoods
Law & order
·
Attorney
General hints at evidence on corruption at crime-fighting unit
Health
·
First
swine-flu related death reported, 343 cases identified
Economy
·
Moody’s
ratings agency says bombings will have no impact on economy
·
Rebound
in spending benefits car, motorcycle industries
Business briefs
Macroeconomy
·
Finance
minister hints at need for deputy minister
Investment
·
Public-private
approach in
·
State concerns
·
House
backs Rp5.5 trillion budget to offset impact of bombings
·
Minister
calls for increase in cement production capacity
SOEs
·
Flag
carrier Garuda announces aggressive expansion plan
Private sector
·
Bombing
hotels to re-open, tourist industry reports some impacts
Banks
·
Non-performing
loans less than 5%, says central bank
Power
·
Gorontalo
power project to be completed in 2010
Oil & gas
·
Regulator
not keen on House bid to curb cost-recovery program
·
First
half oil output marginally under target
Mining
·
Newmont
accepts price of $494 million for 14% unit stake
·
First-half
coal output at 72 million tons
NATIONAL
Govt. to come down hard on fires
Minister of State for the Environment Rahmat Witoelar said
new legislation would give his ministry greater powers from September to deal
with anyone involved in illegal slash-and-burn activities, instead of having to
rely on other government agencies, The
Straits Times reported.
Using fire to clear land is illegal in
“We will be getting handcuffs of our own... It may sound
dramatic but I think this is where the greatest need is. It shows that we mean
business.”
The minister was speaking on the sidelines of a ceremony
with his
It is one of three in the regency funded by
The three facilities, operational since last December,
measure wind speed and direction, rainfall, temperature and relative humidity.
Hourly readings of the level of air pollution will be relayed to officials in
Jambi and
Witoelar also raised concerns about the El Nino weather
pattern, which is developing over the equatorial
“It is a fact that this year's dry season will be a severe
one. If El Nino were to strike, I am sure there will be some fires, but nothing
compared to 2006,” he said.
POLITICS
President re-elected, election commission states
President Susilo Bambang Yudhoyono
was officially re-elected in final results announced by the General Election
Commission (KPU) on Saturday, Reuters reported.
However rival candidates Megawati
Sukarnoputri and Vice President Jusuf Kalla will file complaints to the
Under Indonesian law, presidential
candidates have up to three days to file complaints after the unveiling of the
official vote count.
Megawati won 26.79% of votes in the
July 8 poll and Kalla 12.41%, while Yudhoyono received 60.8%, according to the
final count released by the KPU.
Dr. Yudhoyono denied there had been
widespread foul play in the election and said opposing candidates had the right
to launch a peaceful challenge.
Supporters of Kalla have alleged
that electoral lists contained around 20 million duplicate names, while backers
of Megawati and Prabowo have also complained about widespread problems with
electoral lists.
I Gusti Putu Artha, an election
commission member, told Metro TV the
TERRORISM
Police in massive manhunt following blasts
A suspected terrorist was arrested in
The suspect is believed to have been involved in a plan to
blow up an oil refinery belonging to state-owned PT Pertamina in Balikpapan, a
source said, adding police seized a sketch of Pertamina oil refinery unit VI in
Balikpapan.
“The suspect is now being moved to the National Police
headquarters in
East Kalimantan Police chief Insp. Gen. Andi Masmiyat
refused to comment on the arrest.
Police said they had stepped up the hunt for alleged
terrorist mastermind Noordin M. Top who is believed to be behind the attacks on
the JW Marriott and Ritz-Carlton hotels in
National Police chief Bambang Hendarso Danuri said
investigators were in a "race" to catch Top, whose network is linked
to al Qaeda and the Jemaah Islamiyah (JI) regional Islamist movement.
"This is a race between us and that group," he
said, referring to the network which goes by various names including Brigade
Firaqul Maut (Dare-to-Die Brigade).
He mentioned Syaifudin Zuhri, alias Sabit, who was caught in
the
Zuhri is the uncle of Top’s father-in-law and provided
training and advice to a cell that was arrested in
Police said they were also searching for Top’s
father-in-law, who disappeared after bomb-making material was found buried in
the yard at his Cilacap house days before the hotel attacks.
On Wednesday, police said they arrested a would-be suicide
bomber in
Central Java Police chief Maj. Gen. Alex Bambang Riatmojo said
the man was arrested in Cilacap and has ties to the Jemaah Islamiyah (JI) network.
He was identified only by the initials ZA.
It was unclear whether he is suspected of involvement in the
suicide bombings at the J.W. Marriott and Ritz-Carlton hotels in
Riatmojo said Thursday that the suspect admitted "that
he was indeed prepared as a suicide bomber."
JI has carried out four previous attacks in
Separately, the wife of Noordin Top, the region's
most-wanted militant because of his role in a string of bomb attacks in
Malaysian-born Top is one of the prime suspects behind last
week's near-simultaneous suicide bomb attacks in
Arina Rochmah was detained by the police under
Michdan said Rochmah had no knowledge that her husband,
Abdul Halim, was Noordin Top, although she admitted he was seldom at home due
to his work teaching at an Islamic boarding school in
In Makassar, South Sulawesi, a man identified as Taufan
Haji, 45, was arrested in possession of five identity cards, two passports,
nine credit cards and four ATM cards on suspicion of links to Top, Kompas reported.
SECURITY
In the wake of the recent bombings in
The inspection will be conducted simultaneously across the
city’s five municipalities early next month, an official from the monitoring
division of the Citizenship Agency, Edison Sianturi, said Friday.
“We will prioritize densely populated areas, where there are
many rooms or houses being rented to people from outside
Police investigations have revealed that terrorists often
stay in densely packed residential areas with rooms for rent, where they will
not attract attention or have to answer too many questions.
The terrorists who bombed the Mega Kuningan business
district last week used a false ID card to book a room at the JW Mariott Hotel.
LAW & ORDER
AGO may have ‘proof’ of KPK corruption
Attorney General Hendarman Supandji hinted on Friday that
his office had found sufficient evidence of corruption within the Corruption
Eradication Commission (KPK) to warrant an investigation, the
His statement follows a recent meeting between the AGO and
police. “The meeting was held recently, but we can’t announce the results yet,”
Supandji said, adding that the meeting was basically an informal discussion.
While the meeting was informal in nature, it ended with
several instructions to both the police and state prosecutors, he said without
elaborating.
“We can reveal everything in detail only after a formal
order to investigate the matter is issued,” Supandji said.
Police sources told the Jakarta
Globe recently that several KPK officials were suspected of accepting
bribes when investigating a corruption case involving PT Masaro Radiokom, a
private company.
The allegations came after police tracked cash flows into
bank accounts of KPK officials. Police have deployed a special team from the
Criminal Investigation Directorate to
Masaro was investigated by the KPK for allegedly bribing
lawmakers in an attempt to win a project in the procurement of an integrated
radio communication system for the Forestry Ministry.
AGO hints at more action on former BIN deputy
The Attorney General’s Office indicated on Thursday that it
would likely request a Supreme Court review of the acquittal of former top
intelligence official Muchdi Purwoprandjono on the charge of ordering the
murder of human rights activist Munir Said Thalib, the Jakarta Globe reported.
Prosecutors do not believe Pollycarpus Priyanto, a former
Garuda pilot who was sentenced to 20 years in jail for carrying out the
September 2004 murder, acted alone nor have a personal motive for what is
widely believed to have been a political assassination.
“Thalib was killed by Pollycarpus. The question is what
for,” said Abdul Hakim Ritonga, deputy attorney general for general crimes,
adding that he believed someone else was behind the murder.
However, prosecutors cannot act on Purwoprandjono’s acquittal
until they receive an official copy of the court verdict, Ritonga said.
“I have instructed the head of the South Jakarta
Prosecutor’s Office to ask for the copy from the Supreme Court. We need to
learn the court’s considerations in making the decision,” he said.
Under the country’s laws, requesting a case review at the
Supreme Court requires the petitioner to present new evidence.
Munir, the founder of the Commission for Missing Persons and
Victims of Violence (Kontras), died of arsenic poisoning aboard a Garuda
Indonesia plane en route to
HEALTH
Govt. reports first swine flu-related death, cases at 343
The Health Ministry on Saturday reported its first death
linked to swine flu after a six-year-old girl who had severe pneumonia died in
a
"During her stay at the hospital, the patient's
condition kept getting worse and she died on July 22," Health Ministry
Director General for Disease Control Tjandra Yoga Aditama said on the
ministry's website.
"The child already had health problems since several
years ago and delayed development... this patient had severe pneumonia and the
result from Polymerase Chain Reaction has shown that she was positively
infected by influenza H1N1," he said.
As of July 24,
ECONOMY
Moody’s affirms post-bombing optimism
Moody's
Investors Service affirmed its positive outlook on
"Although
this latest terrorist attack comes as a shock after four years of quiet, it is
unlikely to imperil
The business community also remained in positive move. A gathering
of top business players and economic ministers in
James Castle, a survivor of the bombings and who many regard
as the single most important adviser to foreign investors through his
consultancy CastleAsia, said he and fellow foreign investors were confident
about the economy and the business climate that was conducive to investment.
Bank Indonesia
(BI) was also upbeat, linking a stronger rupiah to continuing optimism over the
economy.
Deputy governor Hartadi Sarwono said the dollar may stay
below Rp10,000 in the near term due to the country’s positive economic outlook
after the presidential election, with both global and domestic factors
supportive, Dow Jones reported.
Sarwono said the July 17 blasts at two luxury hotels, which
killed nine people and wounded 53, would have a limited impact on the rupiah.
Sarwono added that on-year inflation is likely to be lower
this month than in June. Consumer prices will likely rise by around 3% compared
with 3.65% in June, and some room remains for more central bank rate cuts,
Sarwono said.
However, Sarwono said the room for rate cuts going forward
is "limited" because of the risk of inflationary pressures from
strengthening commodity prices and the El Nino weather phenomenon, which is
expected to cut harvests.
BI's
policy rate is now 6.75%, and most analysts expect another 25-basis point cut
next month.
Another
BI deputy governor, Budi Mulya, said on Friday the bank will continue to maintain
stability in the rupiah, Reuters reported.
"We
are monitoring. We will maintain (low) volatility so that there won't be
excessive volatility," Mulya told reporters when asked about the
strengthening rupiah.
The
rupiah gained 0.5% to Rp9,995 per dollar on Friday, strengthening past the key
10,000 level for the first time since June.
There were also signs of a rebound in consumer spending,
with both car and motorcycle producers saying the decline in the market as a
result of the global crisis would be less dramatic than expected, with
motorcycle sales, a key indicator of confidence, likely to be down only 20%
rather than the 40% fall originally projected.
Domestic car and motorcycle manufacturers revised their
sales targets for the next 18 months as the Indonesian International Motor Show
kicked off in
Analysts believe car sales will rise more than 11% in 2010, Bambang
Trisulo, chairman of the Indonesian Automotive Industry Association (Gaikindo),
said on Friday, The Jakarta Globe reported.
He said nationwide vehicle sales may exceed 500,000 units in
2010, up from an estimated total of 450,000 this year — a 25% decline from
2008.
Gaikindo earlier reported that vehicle sales rose 10% month-on-month
in June.
The Indonesian Motorcycle Industry Association (AISI) said
on Friday that it had raised its industry sales forecast this year, to a
decline of less than 20%, from an earlier projected drop of 40%, Bloomberg
reported.
Gaikindo said Wednesday new car sales in
BUSINESS BRIEFS
MACROECONOMY
2Q growth at 3.7%: Official
The economy is estimated to have grown by 3.7% in the second
quarter of this year, bolstered by ongoing strong consumption, a Finance Ministry
official said on Friday, The Jakarta Post
reported.
“Consumption is still strong, though not as strong as the
first quarter,” Anggito Abimanyu, the ministry’s head of fiscal policy, said of
the performance of the economy in the second quarter.
The estimated rate of growth is below the 4.4% recorded in
the first quarter.
Abimanyu said activity would most likely accelerate in the
third quarter due to an increase in investment. The ministry forecasts
full-year economic growth at 4.3%.
The Central Bureau of Statistics (BPS) will announce the
official growth rate figure next month.
Earlier, Finance Minister Sri Mulyani Indrawati said she was
confident of achieving economic growth of 4% to 4.5% this year despite the bomb
attacks on two hotels in
Separately, MS Hidayat, head of
Govt.
aims to raise Rp2T in debt sale
The Finance
Ministry said Thursday it expects to raise Rp2 trillion ($199.4 million) in an
auction of government debt paper this week as part of its funding of the budget
deficit, Reuters reported.
The
ministry said in a statement it plans to sell treasury bills maturing in 2010
as well as fixed rate treasury bonds maturing in 2022, 2028, 2038.
The
ministry raised Rp3 trillion at its last debt auction on July 14, above its
target, on the back of expectations of better economic conditions.
The
ministry on Friday began to offer its sixth series of local-currency retail
bonds with a maturity of three years and a coupon of 9.35%. The offer will stay
in place until August 7 and settlement will be August 12, Dow Jones reported.
Finance Ministry may need deputy minister: Indrawati
Finance Minister Sri Mulyani Indrawati has hinted the ministry
may need a deputy minister due to the heavy workload she now handles, The Jakarta Post reported.
"It's the president's decision whether a ministry or
government agency needs such a position, and whether, objectively, it has a scope
of work that requires its minister to be in several places at once," Indrawati
said Wednesday after a meeting at the House of Representatives.
"Take the finance minister; in this case, the frequency
of attendance in doing the job as a government representative to discuss the
budget at the House becomes a factor,” she said
"The finance minister must also go on many trips to
fulfill international commitments, particularly through
The Finance Ministry also needs to control the many
directorates general under it, with branches spread across the country, adding
to the workload of the minister, Indrawati added.
Article 10 of the 2008 state ministries law says the
president may appoint a deputy minister to a certain ministry if the minister
is handling a heavy workload that needs special treatment.
H1 tax
revenues down 2.8%
The government raised Rp253.19 trillion ($25 billion) in tax
revenues in the first half of this year, down 2.8% from a year earlier because
of slowing economic growth, Director General of Tax Darmin Nasution said in a
statement, Reuters reported.
Tax revenues, which included income tax on oil and gas
commodities, reached Rp260.56 trillion in the first half of 2008.
Non-oil and gas tax revenues in the period January to June
2009 were down by 0.18% to Rp225.79 trillion from Rp226.06 trillion in the same
period last year.
INVESTMENT
Govt., private firms build shipbuilding industrial cluster
The government, in partnership with private companies, is constructing
an industrial cluster for shipbuilding on 400 hectares of land in Lamongan,
The cluster, estimated to be worth Rp5.9 trillion, will have
the capacity to produce two large vessels and repair 100 vessels a year.
The total investment will include the construction of
production facilities, supporting infrastructure and public facilities.
Soerjono, director for Maritime Industry and Engineering Services
at the Industry Ministry, said the government would control 26.6% of the total
investment, while the
"In that cluster, there will be six 50,000-DWT
shipbuilders, 14 10,000-DWT shipbuilders and supporting facilities,"
Soerjono said Thursday.
Budi Darmadi, Director General for Transportation, Telecommunication
and IT Industries at the ministry, said the cluster would commence operation next
year, starting with the production of small vessels.
He said the existing national capacity of 165,000 DWT per
annum would be unable to meet increasing demand predicted to peak at 500,000
DWT in the next five years as an influx of orders was expected from Asia and
Darmadi added annual domestic demand amounted to 590 general
cargo ships, including 50 container ships, 12 bulk ships, 70 tugboats, 44
passenger ships, 80 fishing vessels and 25 roll-on/roll-off vessels.
The government investment is being made through state-owned
PT Dok & Perkapalan Surabaya (DPS). The rest of the investment, 70.8%, is
divided among three private investors: PT Dok Pantai Lamongan, PT Lamongan Industrial
Shorebase and PT Lamongan Marine Industry.
The new cluster in Lamongan will support the ongoing
operation of another shipbuilding cluster in
The cluster was established in
Currently, the core members are shipbuilders including state-owned
PT PAL and privately owned DPS, PT Dumas Shipyard, PT Adiluhung and PT Ben
Santosa.
Chinese automakers eye investment in Indonesia
Two Chinese automakers are studying possible investments in
Transport Director General Budi Darmadi said the two, one of
which is the producer of the Sokon brand, plan to build factories to produce
multipurpose vehicles (MPV).
The Chinese principals have already secured investment
licenses from the Investment Coordinating Board (BKPM), Darmadi said, adding
they are ready to invest up to Rp2 trillion ($200 million) each.
Meanwhile, Industry Minister Fahmi Idris said the impact of
the global financial crisis is having an effect on the country's automotive
industry, Kontan reported.
Idris predicted the industry would grow 8% this year as
against last year growth of 12.6% with capacity utilization falling to 55% from
83%.
STATE CONCERNS
Govt. urged to
prepare Rp5.5T for bombing impact
The Budget Committee at the House of Representatives has
asked the Finance Ministry to prepare Rp5.5 trillion from the state budget to
anticipate the impact of the July 17 bombings, Kompas reported.
“The use of funds will be in the hands of the government,”
committee vice chairman Suharso Monoarfa said after meeting with Finance
Minister Sri Mulyani Indrawati on Wednesday.
Monoarfa said the government may spend up to Rp5.5 trillion
on extra security measures following the hotel bombings, which may push the
budget deficit up to the original projection of 2.5% of GDP.
Monoarfa earlier said the House and the government agreed to
widen the budget-deficit target for this year to 2.4% of GDP from 1.9% set last
year.
Govt.
asks for cement production boost
State Minister
of State Enterprises Sofyan Djalil is asking state cement producers to increase
their production capacity in order to fulfill the country's growing demand for the
basic commodity, The Jakarta Post
reported.
"We
predict the country will need 140 million metric tons in the next 10
years," Djalil said during a signing of a memorandum of understanding
between state power company PT Perusahaan Listrik Negara (PLN) and cement
producers PT Semen Gresik, PT Semen Padang and PT Semen Tonasa in
"So
far we only produce 46 million metric tons to provide for the country’s annual demand,"
he added.
Govt.
push for APEC regional trade financing
“The
cooperation so far is bilateral among individual members," Trade Minister
Mari Elka Pangestu said in
She said
trade financing was very important for developing export-oriented SMEs. "It
is the SME that needs insurance. We hope there will be trade relations among SMEs
of APEC members," said Pangestu.
"Recovery
from the current crisis will require coordination and close linkage of steps in
the financial and trade sectors," she said.
The
ministers agreed that the dialogue process had to be continued and increased,
not only to overcome the (financial) crisis and streamline ways to recovery but
also to create APEC economic resilience in the long term.
Pangestu
added that APEC had to pay attention to capacity development programs that
would affect SMEs and community groups badly in need of them, Antara reported.
SOEs
SOEs’
dividend payments up 300%: Minister
State Minister
for State Enterprises Sofyan Djalil said Thursday that SOEs’
dividend payments to the state over the past five years had risen by up to 300%,
Asia Pulse reported.
SOEs` net
profit went up 77% to Rp78 trillion ($7.8 billion) in 2008 from Rp44 trillion
in 2004, while assets increased 38% to approximately Rp2000 trillion.
He
attributed the achievement to the significant improvement of state firm
operations as a result of the application of improved procurement systems and
procedures through e-procurement, among other steps.
Other
factors were the application of good remuneration mechanisms and the
formulation of management contracts with tighter and measurable key performance
indicators, as well as direct synergy and cooperation without involving third
party and efficient healthcare spending.
"These
all have led to a better corporate culture to create added value at state
firms," he said. "The improved performance of Garuda
He also
cited state power company PT PLN, which managed to save hundreds of millions of
dollars by renegotiating a project last year, while state bank PT Bank BRI has
become the best bank in three consecutive years.
SOEs’
capital expenditures which stood at Rp128 trillion last year were projected to
increase to Rp152 trillion this year, while in 2004 the figure was only Rp32
trillion.
Garuda
to increase fleet size, passenger numbers
Flag
carrier PT Garuda Indonesia plans to acquire 64 new aircraft to increase its
fleet to 116 aircraft by 2014 and aims to increase its net profit by around
five times in the same period, chief executive Emirsyah Satar said Thursday,
Dow Jones reported.
Satar
said some of the new aircraft will be leased and some will be purchased.
Garuda
will take delivery of four Airbus A330-200 aircraft this year, Satar said,
adding the airline will also acquire 50 Boeing 737 Next Generation aircraft and
10 Boeing 777 Extended Range aircraft.
Garuda hopes
to increase its net profit to Rp3.7 trillion by 2014, from Rp669 billion last
year, he said.
Garuda is
targeting an increase in passenger numbers to 27.6 million by 2014 from 10.1
million last year, he said, adding that net profit this year should increase,
but didn't elaborate.
Telkom
set to acquire two ICT firms
PT Telekomunikasi
The
company has yet to disclose the names of the companies but president director
Rinaldi Firmansyah said recently a price had been agreed with one of them.
Firmansyah
hinted the value of the acquisition would be less than the Rp598 billion spent
to increase Telkom’s share ownership in PT Infomedia Nusantara by 49% last
month, while the value for the other company would be “below Rp500 billion”.
He added
the budget had been allocated for in this year’s capital expenditure, which,
according to earlier reports, could reach up to Rp21 trillion, about Rp14
trillion of which has been allocated for phone business expansion.
Both
acquisitions, Firmansyah said, were for majority ownership in the companies.
State-owned steelmaker PT Krakatau Steel is trying to boost
its revenue by increasing direct sales to up to 75% of total sales, The Jakarta Post reported.
"Direct selling is more efficient because Krakatau does
not need a third party when selling its products," said
Last year, only 5.2% of the company's products were sold
directly to end-users.
"We predict the increase in direct sales will boost our
annual revenue by a minimum of Rp120 billion ($120 million)," said Hakim.
To boost its direct selling program, the company will allow
delayed payments for sales of between 20 and 50 tons, and will implement a
cash-and-carry mechanism for smaller buyers.
PRIVATE SECTOR
Ritz-Carlton, JW Marriott to re-open soon
The Ritz-Carlton and JW Marriott hotels in
JIHA chairman Poul Bitsch said that the decision to stay in
operation in
Culture and Tourism Minister Jero Wacik added the government
had agreed to allocate Rp94 billion ($9.3 million) for the ministry's tourism
recovery program.
As of Sunday, the Indonesian Hotel and Restaurant
Association said 2,000 foreign tourists had cancelled their plans to visit
The JIHA reported all five- and four-star hotels in
The chairman of the Association of Indonesia Tours and
Travel (Asita), Ben Sukma, said Friday Indonesia suffered only minor tourists
visit cancellation as a result of the bomb blasts, Xinhua reported.
He said cancellations to North Sumatra and West Sumatra
stood at 5-10%, consisting of tourists from
"We saw cancellations to Jakarta of 20-30% or 7,000
tourists from South Korea, China, Taiwan, and Europe. We haven't counted domestic
tourists," Sukma said.
Bakrie sees palm output up 17%
PT Bakrie Sumatra Plantations said on Tuesday it expects its
palm oil output to rise 17% to 420,000 tons in 2010, boosted by increased
output from maturing plantations, Reuters reported.
Bakrie Sumatra, the world's 15th largest listed palm
plantation firm by market value, would also seek about $110 million in bank
loans next year to finance the planting of around 36,000 hectares of new palm
oil estates, president director Ambono Janurianto said in an interview.
Two banks had previously indicated their support for the
expansion plans a year ago, but a sharp drop in palm oil prices, coupled with
the global financial crisis and recent bomb attacks in
"We are keeping all the channels open. We will keep
trying to find ways to get funding although the circumstances are quite
difficult, especially after recent incidents," Janurianto said.
In mid 2008, Bakrie Sumatra raised $80 million through a
private equity fund, in which it owns a 36% stake, to partly finance plans to
increase new palm oil plantations by 50,000 hectares by 2011.
The $80 million of funds will be used up to plant around
14,000 hectares and therefore the rest of the program must be funded by bank
loans, Janurianto said.
BANKS
Banks’ NPLs estimated below 5%: BI
The non-performing loans (NPL) of local banks are estimated
not to exceed 5% this year as the economy recovers and banks work hard to
offset NPLs, a Bank Indonesia (BI) official said on Thursday, Asia Pulse
reported.
BI deputy governor S Budi Rochadi added that positive growth
in bank credits was visible since June.
"BI estimates that bank credits will this year still
grow by 15% from last year. It is true that the growth will be lower than last
year when it was 24% to 25% but 15% this year is still high considering the circumstances,"
he added.
The absorption of third-party funds was also showing an
upward trend, reaching Rp1,783 trillion ($178.3 billion) in May from Rp1,705.3
trillion in late December 2008.
Meanwhile, the Indonesian Chamber of Commerce and Industry (Kadin)
called on banks to lower interest rates on credits in line with the reduction
of BI's key rate to 6.75%.
"I appeal to banks to cut their lending rates soon so
that investors will be able to borrow money at relatively lower interest
rates," chairman of Kadin`s foreign investment committee Chris Kanter said.
He said lending rates at present were still at the 13% level
while a fair rate would be in the range of 10% to 11%.
BRI set to acquire Bank Bukopin
PT Bank Rakyat Indonesia (BRI) said it was eyeing several
banks including PT Bank Bukopin to support its plans to consolidate its
business in the retail sector, Asia Pulse reported.
BRI president Sofyan Basir said the bank has enough cash to
buy a mid-sized bank with a strong presence in the SME and consumer business
sector.
A source at the office of the State Minister for State
Enterprises said BRI,
Sumitomo
Mitsui Banking Corp (SMBC) reportedly will form a partnership with PT Bank
Central Asia (BCA) in wholesale operations to bolster services designed to
support Japanese firms operating in the country, Reuters reported.
The deal is
believed to be the first such tie-up between a major Japanese bank and an
Indonesian institution that will specifically target corporations, the Nikkei daily said.
The
partnership will allow SMBC to receive a stable supply of rupiah. Demand is
growing among firms to settle accounts in rupiah since last fall's financial
turmoil, the Nikkei said.
SMBC, the
core banking unit of Sumitomo Mitsui Financial Group Inc, intends to help
Japanese companies manage funds locally by offering cash management services,
as well as provide more loans.
Bank Permata gets capital injection of $100M
Publicly listed lender PT Bank Permata has received
additional capital of $100 million raised from the sales of subordinate medium-term
notes (MTN), Asia Pulse reported.
Bank Permata president Steward D Hall said the additional
capital improved the capital adequacy ratio of the bank to 13% from 10.9% in
March.
Stronger capital would give the bank greater flexibility to
grab any opportunity to grow, he said.
The 12-year notes, carrying an annual interest rate of
9.75%, were entirely bought by its majority shareholders, Standard Chartered
Bank and Astra International, both a 45% shareholder of Bank Permata.
POWER
PLN seeks $1B in loans for power program
State-owned power company PT PLN plans to seek between $900
million and $1 billion in loans to help fund its crash 10,000 MW electricity capacity
expansion program, company officials said Tuesday, Bisnis Indonesia reported.
PLN vice president director Rudiantara said the company will
seek the funds from overseas banks.
"We will seek loans with the most beneficial
pricing," he said.
Rudiantara added that the company plans to issue Rp1.5
trillion in rupiah-denominated bonds in October or November.
Moody's has set a Ba3 rating for PLN and non-secured bonds
worth $2 billion with positive prospects following a proposal from PLN
subsidiary Majapahit Holding BV for a $450 million bond issuance with 7.25%
coupon maturing in 2011.
Gorontalo power plant to be completed in 2010
A coal-fired power plant with a capacity of 2 x 25 MW in Anggrek,
Gorontalo Governor Fadel Muhammad said on Thursday that
construction of the project has reached the stage of land leveling and
construction work would start on September 27.
He said the power plant is very important to the region,
where maximum power consumption had reached 32 MW.
The completion of the project has been delayed for a year because
of land clearance problems, Muhammad said.
OIL & GAS
BP
Migas pans House’s cost recovery cut proposal
Upstream oil
and gas regulator BP Migas has criticized a proposal by the House of
Representatives to cut the cost-recovery ceiling from $11.5 billion to $10
billion this year, saying that the reduction would have an impact on oil and
gas output, The Jakarta Globe
reported.
“We are
being told to increase output, improve the quality of our human resources and
produce more added value for the country, while at the same time having to
reduce costs,” BP Migas chief R. Priyono said on Thursday. “It will be
difficult.”
The
House’s budget committee on Wednesday proposed that the cost-recovery ceiling
should be reduced to help lower the budget deficit, in the event that the
Indonesian crude price falls to $58 a barrel, or if national oil production
fails to reach the government’s target of 960,000 barrels a day.
H1
oil output hits 99.15% of target
Oil
output in the first half of 2009 hit 951,793 barrels per day (bpd), or 99.15% of
the targeted 960,000 bpd, the upstream oil and gas regulator BP Migas said, The Jakarta Globe reported.
BP Migas
head R. Priyono said oil output was expected to increase significantly in the
second half, with the BP-led Tangguh field in West Papua due to start producing
7,000 bpd of condensate starting this month.
The giant
Cepu oil field, straddling the border between Central and
Tangguh LNG plant plans to ship 56 cargoes in 2009
The BP-led Tangguh project in
"The first cargo to
He said Tangguh also plans to ship 19 cargoes to
Tangguh has sent one cargo to
Tangguh has several foreign supply contracts, including a
2.6 million tons per year contract with China National Offshore Oil Corp
(CNOOC).
US firm Sempra Energy 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.
"We are looking to turn some of the gas from Tangguh to
the domestic market. We are seeking a domestic company for Tangguh gas and
there will be business-to-business negotiation," Priyono said.
Meanwhile, Priyono also said buyers in the key markets of
However, the cancellations have not been as extensive as
expected when the financial crisis first struck at the end of last year, he
said.
On Tuesday, a Bontang plant official said the government
will cut planned LNG exports from the plant this year by 10 cargoes to 297
cargoes at the request of buyers.
"If STX join in, there will be a change in the
ownership composition," Legowo said.
A report said the three original investors in the refinery -
PT Pertamina, National Iranian Oil Refining and Distribution, or NIORDC, and
Pertamina and NIORDC hold 40% each and Petro Field holds a
20% stake in the refinery, which has a planned refining capacity of 300,000
barrels a day.
The total cost for the refinery is estimated to be between
$3 billion and $4.7 billion.
Legowo said the refinery's first unit, with a daily capacity
of 150,000 barrels, is expected to start operating in 2014.
State-owned oil company Pertamina currently operates seven
refineries across the country with a total daily output of 950,000 barrels.
MINING
Newmont
to sell 14% stake in unit for $494M: CEO
Newmont
Mining Corp. confirmed Thursday it has reached an agreement to sell a 14% stake
in its gold mining unit in West Nusa Tenggara for $494 million, said Richard
O'Brien, Newmont's president and chief executive, The Associated Press reported.
Newmont
said Thursday it is waiting for government officials in
State
Minister for State Enterprises Sofyan A. Djalil has thrown his full support
behind the appointment of state mining company PT Aneka Tambang (Antam) to be
the buyer of the 14% stake, The Jakarta
Post reported on Friday.
"We
plan to send a letter of request to the Finance Ministry to advocate for
Antam's purchase of the stake. There have already been informal talks between
the government and Antam," Djalil said on Wednesday.
Responding
to prospects that his company may have the right to buy the Newmont share,
Antam president director Alwinsyah Loebis welcomed the plan, saying the
acquisition would add value to the company.
Aside
from its nickel business, Antam also has gold mining operations. Loebis added
that Antam might establish a consortium to finance the acquisition.
"We
cannot reveal the names of other companies in the consortium right now, or
whether we will take a majority in the consortium or not, as it will depend on
the negotiations," he said.
The
divestiture was ordered in April by international arbitrators, ending a
three-year dispute between the Indonesian government and PT NNT over how the
mining company should divest shares as required under its contract to operate
in Indonesia.
Newmont
has a 45% stake in the subsidiary, PT Newmont Nusa Tenggara.
H1 coal output at 72M tons: Official
The Director General of Minerals, Coal and Geothermal
Resources, Bambang Setiawan, said the output accounted for 31% of the
government's target of 230 million tons for the entire year.
Coal exports reached 52 million tons during the January to
June period, Setiawan said.
Kepco buys
$5.1M-worth stake in Adaro
State-run utility Korea Electric Power Corp. (Kepco) on
Thursday said it has acquired a 1.5% stake in coal miner PT Adaro Energy for
$51 million, Dow Jones reported.
With the stake purchase, Kepco will be able to secure 3
million metric tons of soft coal annually, it said in a statement.
Last year, Kepco bought 64 million tons of soft coal from
overseas, 40% of which was from
Meanwhile, Adaro’s key shareholders intend to consolidate
their shareholdings into a separate investment holding company to be called PT
Adaro Strategic Investments.
The holding company will directly own a 43.91% stake in
Adaro Energy. The key shareholders won't reduce or increase their interest in
Adaro Energy.
The move consolidates the shares of Adaro Energy's five key
shareholders - the Rachmat family, the Thohir family, the Subianto family,
businessman Edwin Soeryadjaya and businessman Sandiaga Uno.
Berau Coal draws local, Chinese bids: Sources
PT Indika Energy and
Sources said Berau --
Berau, which has a 1,200 square km concession area in
Armadian Tritunggal -- an investment firm controlled by
businessman Rizal Risjad -- is selling its 51% controlling stake in Berau.
The sale is being run by Deutsche Bank, Bank of America's
Merrill Lynch, and former Merrill banker Sheldon Trainor's PacBridge Capital
Partners..
Armadian Tritunggal may elect to keep a portion of its
controlling stake, a source had previously said.
Berau is a joint venture between Tritunggal, Dutch firm dan
Rognar Holding B.V. and Japanese firm Sojitz Corp, with Rognar and Sojitz
owning 39% and 10% stakes.
Shenhua unit to invest $331M in S. Sumatra project
China Shenhua Energy Co. said late Thursday that one of its
units, in which it owns a 70% stake, plans to invest $331 million in building
an open pit coal mine and two coal-fired generators in
Under the plan, the open pit coal mine will be able to
produce 1.5 million tons of coal yearly, while the two generators will have an
annual capacity of 150 MW.
The company
said construction work on the project has already begun, and that the two power
generators will be able to begin operation by June 2011.
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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.