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], 19 January 2009
Highlights
National
·
Tourists
told to wear ‘suitable’ clothes off
Politics
·
Polling
firms to form association to monitor professionalism
Terrorism
·
Attorney
General extends terrorism prosecution program
Security
·
Law & order
·
New
Supreme Court Chief Justice elected
Health
·
Five-year
program introduced to improve sanitation
Economy
·
Government
bond issue strongly over-subscribed
Business briefs
Macroeconomy
·
Additional
stimulus measures announced for business, public
Investment
·
Investment
in 2008 highest in
Reform
·
World
Bank approves $110 million loan to help boost tax revenues
State concerns
·
Government
to take responsibility for workers’ taxes to help avoid job cuts
SOEs
·
PT
Semen Gresik looks at regional acquisitions
Private sector
·
Retailer
Alfaria to add 400 stores after IPO
Banks
·
Bank
Power
·
Power
company PT PLN to spend Rp57 trillion on distribution system
Oil & gas
·
Third
round of fuel price cuts comes into force
Mining
·
December
tin exports increase by 14%
NATIONAL
Tourists told to wear ‘suitable’ clothes off
Bali Police chief Insp. Gen. Ashikin
Husein has urged tourists to wear suitable clothing when riding motorcycles or
when not on the beaches to avoid violating social ethics, The
"In
He said people became afraid to touch tourism-related issues
especially after the island's economy got hit by two bombings in 2002 and 2005.
Denpasar Police chief Sr. Comr. Alit Widana said the tourism and transport police had been
monitoring the presence of bare-chested and bikini-clad tourists on the roads
outside the beach areas for the past four months.
Indonesian skies less polluted: Govt.
The government claims to have significantly cut the
country's greenhouse gas emissions, contradicting international reports that
rank
A draft report by the government says the country's total
emissions between 2000 and 2006 averaged around 640,000 gigatons
of carbon dioxide (CO2) per year, compared to 950,000 gigatons
in 1994.
"We still need to factor in emissions from peat land
sources into our calculations before launching the report, hopefully in
March," said Masnellyarti Hilman, Deputy Minister for Nature Conservation
at the Environment Ministry.
The forestry and energy sectors remained the main polluters,
contributing 72% of the country's total emissions.
The draft report places solid waste as the second-worst
polluter with 16%, followed by the agriculture and industrial sectors
contributing 8% and 4% respectively.
The UN requires wealthier signatory nations of the Kyoto
Protocol to submit their emission inventory data every year.
Developing countries, including
Japanese whaler in
The Japanese whalers have had to make do without one of
three catcher ships, Yushin Maru,
reducing the fleet's killing power for much of the polar season.
The ship arrived recently in
Indonesian government officials have queried Japanese claims
that the harpoon-equipped, whale-killing vessel was a research ship, the
Jakarta Animal Aid Network said.
"I think, I hope, they will refuse permission for it to
dry dock," said spokeswoman Femke den Haas.
The Yushin Maru harpoon cannon was clearly visible, shrouded, on the bow, she said.
Den Haas said she had been negotiating with the Indonesian
Forestry Department, which has responsibility for wildlife issues, over the
ship's fate.
She said Indonesian authorities initially had sought a
letter of indemnity, or guarantee, from
Den Haas said the guarantee was quickly provided, but the
Indonesian Forestry Department had asked for evidence that other countries,
particularly
Sea Shepherd leader Paul Watson has reportedly offered a
$10,000 reward to anyone who could non-violently prevent the Yushin Maru from
leaving
POLITICS
Pollsters
agree to form association for accountability
Pollsters have agreed to form an association in bid to boost
credibility of the institutions and to maintain the quality of survey results,
said Indonesia Survey Institute (LSI) executive director Saiful
Mujani, Media
Indonesia reported.
“The cooperation will later be followed up with a formation
of a survey institution code of ethics,” said Mujani.
The association, he said, will be capable of conducting
audits and monitor its members’ performance. The association is expected to
involve around 50 members.
The General Election Commission earlier urged all pollsters
to register and monitor themselves to minimize conflict from conflicting
results.
In response to the appeal, M. Qodari,
executive director of prominent pollster Indo Barometer, said there was no need
to be intimidated by the existence of polling institutions because only the
most credible ones will stand a chance to survive.
“Controversy over survey institutions can be regarded as
normal in a newly democratic nation such as
TERRORISM
AGO extends anti-terrorism efforts
The Attorney General’s Office (AGO) is to continue operating
a special team of prosecutors dedicated to handling terrorism and transnational
criminal cases that was established with help from the
On Friday, Attorney General Hendarman
Supandji inaugurated 28 prosecutors assigned to
replace existing members of the team.
The team was originally set up in 2006 to handle terrorism
cases linked to the 2005 suicide bombings in
The
Supandji said his office extended the team’s
service to accelerate prosecutions in ongoing cases.
Supandji said the team had so far handled 36
terrorism cases, 85 human trafficking cases and wo money laundering cases. “We need this program to
be remain vigilant,” he said.
Abdul Hakim Ritonga, the deputy
attorney general for general crimes, said the team had been assigned to handle
some new cases, including terrorism charges leveled against 10 defendants from West
Sumatra and
Ritonga said no additional foreign money
had been committed to the team and the remainder of the 2005
SECURITY
About 11,600 military personnel from the five nations will
hold the exercises in the
"The exercise is a symbol of
Nearly 7,300 troops will come from the
John said the exercises would prepare the region to respond
to natural disasters such as the 2004 Indian Ocean tsunami and the cyclone
which devastated swathes of southern
"There is no better exercise than Cobra Gold in keeping
our militaries ready to respond to the real-world priorities of peacekeeping,
stability, reconstruction and humanitarian assistance," he said.
Jakarta
Police, KPUD and court intensify security for elections
As competition among political parties heats up ahead of
April's national elections, Jakarta police are intensifying security to ensure
the capital remains safe in the days surrounding the vote, a police spokesman
said, The Jakarta Globe reported.
Jakarta Police spokesman Zulkarnain
said that the police chief, Wahyono, had signed two
memorandums of understanding with government bodies to ensure coordination on
election-related security issues.
The first agreement between police and the Jakarta General
Elections Commission (KPUD) outlined police responsibility during the election
period.
"The police are responsible for providing security
during the campaign, the voting and while the results are being
determined," Zulkarnain said, adding that the
city would deploy 21,340 police officers at thousands of voting stations
throughout the city.
"Brawls are likely to erupt among supporters of
different political parties. We have to provide a heavy security presence so
that people feel safe,” he said.
A second agreement was signed between the police, the
Jakarta High Court, and the Jakarta Election Supervisory Committee.
The deal covers potential criminal acts during the general
elections period, Zulkarnain said.
LAW & ORDER
Supreme Court elects new chief
Harifin A. Tumpa was
elected by fellow justices at the Supreme Court to be the next Chief Justice of
the highest judicial body in the country, The
Jakarta Post reported.
Tumpa secured the post by a landslide on
Thursday, winning 36 of a possible 43 votes. He replaces Bagir
Manan who retired in November last year after leading
the top judicial institution for seven years.
With the Supreme Court law requiring a chief justice to step
down at 70, Tumpa, the most senior justice, can hold
the position only for three years.
Tumpa said the court settled an average
1,000 cases per month, adding that only 65 of 580 graft suspects were
exonerated last year, with only one acquitted by the Supreme Court, with the
others freed by lower courts.
The Supreme Court also elected Ahmad Kamil,
62, as the deputy chief justice for non-judiciary affairs; and assistant chief
justice for trade civil affairs Abdul Kadir Mappong, 66, as deputy chief justice for judiciary affairs.
The election results will now be submitted to President Susilo Bambang Yudhoyono for
approval.
Global freedom fell as
Freedom House assigns a score of one to seven for two
categories of freedom, political rights and civil liberties, with a score of
one representing the most free. An average of those scores determines a
country's designation of "free," "partly free" and
"not free."
Twenty percent of the world lives in "partly free'
nations such as Ecuador, Colombia, Malaysia and Singapore, while 46% are
"free," including Indonesia, Taiwan, Ukraine and Brazil.
Thirty-four percent of the world's population lives in
"not free" countries, which include
Authoritarian rule in
AGO gets
go-ahead to probe senior officials
The Attorney General's Office (AGO) has secured the
President's approval to question seven regional top elected officials,
including the former governor of West Nusa Tenggara, in ongoing graft investigations
across the country, The Jakarta Post reported.
The suspects who will be summoned are former West Nusa
Tenggara Governor Lalu Serinata,
Bengkulu Governor Agusrin Najamuddin,
North Sulawesi Deputy Governor Fredy Sualang, Purworejo Regent Kelik Sumrahadi and Minahasa Deputy Regent Tanje Wowiling.
Two other governors -- Gorontalo
Governor Fadel Muhammad and North Sulawesi Deputy
Governor Freddy Harry Sualang -- will face
questioning as witnesses.
Assistant attorney general for special crimes Marwan Effendy said the AGO is
still waiting for the president’s go-ahead required to interrogate Pandeglang regent A. Dimyati Natakusumah and Banyuwangi regent
Ratna Ani Lestari.
Natakusumah is a suspect in alleged misuse of a Rp200 billion ($18 million) loan. The Pandeglang
District court has charged the regent did not consult with regency legislative
councilors (DPRD) when he secured the loan from Bank Jabar.
Lestari is a suspect in a case where funds were embezzled
from a Banyuwangi airport project leading to Rp19.76
billion in state losses.
HEALTH
Govt. to
improve sanitation in five years: Official
The government will conduct a massive improvement in
sanitation, clean water and garbage disposal systems over the next five years, Kompas reported.
The decision came after a meeting discussing sanitation
between Vice President Jusuf Kalla,
Welfare Minister Aburizal Bakrie, Public Works
Minister Djoko Kirmanto and Environment Minister Rachmat Witoelar.
“The Indonesian people are lacking proper sanitation. Only
77% have toilets or septic tanks while the rest still dispose of their waste
directly to rivers, paddy fields or plantations, causing harm to the
environment and people’s health,” said Kirmanto.
According to Kirmanto, the
government will build septic tanks which can be used by 20 families in every
overpopulated area.
Kalla said that by 2014 residents will no
longer be allowed to dispose their waste in the open.
The government, Kalla said, will
soon issue a government policy on garbage disposal, which will specifically
organize the building of waste disposal sites.
“In several areas, residents have been rejecting waste
disposal sites being built in neighborhoods, despite the benefit it will bring
if it is well organized,” added Kirmanto.
Generic
medicine prices to go down 19%
The central government would slash the price of at least 21
generic drugs by an average of 19% and release a multimillion dollar state
subsidy to keep drug and medicine prices stable this year despite global
economic conditions, Heath Minister Siti Fadillah Supari said, Antara reported.
The minister did not name the generic drugs that would have
their prices cut, but said the move was to ensure that more people could afford
them. "Poor people also have the right to decent health service," she
said.
The Ministry of Health has also earmarked Rp280 billion
($25.5 million) from the state budget for the Subsidized Generic Medicine
program, under which drugstores across the country would sell
"fast-moving" drugs and medicines such as antibiotics, cold medicines
and pain relievers at prices set by the government.
Life-saving drugs such as medications for heart and cancer
patients would also be sold at cheaper, fixed prices, Supari
said.
She said provincial and district governments would only be
able to obtain subsidized drug supplies from the Ministry of Health, rather
than directly from private distributors.
"I know there are many local officials who prefer to
buy the most expensive kinds of medicines because they earn a commission from
the seller, but this will no longer occur," she said.
Supari said the subsidy aimed to stabilize
prices irrespective of any fluctuations in the rupiah, which fell as much as
30% against the dollar last year. The government bought raw materials for drug
production when the rupiah was at 9,400, so any decline this year should not
affect prices, she said.
ECONOMY
Govt.,
donor nations sign Jakarta Commitment
The
government and 22 aid donor nations and financial agencies have signed an
agreement to be known as the Jakarta Commitment which will allow
The
agreement is useful amid the global economic crisis as foreign loans are
expected to help in project financing in
Among the parties to the agreement are the World Bank, Asian
Development Bank, the
The
government wants the aid policies of donors to be adjusted to the national
development interest and priorities, Suzetta said
after the signing of the agreement on Tuesday, and the commitment gives the
government more control of implementation of projects financed with foreign
aid.
Finance Minister Sri Mulyani Indrawati said after the
signing ceremony that the Jakarta Commitment aims to create equality in status
and a partnership between recipients and creditors," The Jakarta Globe reported.
"To date, the recipient countries have been at the
bottom, and in a position where the terms and conditions can be dictated to
them."
The commitment partly aims to improve transparency in the
use of sovereign loans and grants provided to
Mahendra Siregar, the coordinating minister for the
economy's deputy for international relations, said the country's need for
sovereign loans and grants has dropped significantly to about 5% of the
country's total financing, compared with a decade ago when foreign funds
financed nearly all the deficit.
"The current situation has given
In other moves by the government, funding for fiscal stimuli
previously set at Rp12.5 trillion is to be increased by Rp15 trillion, Indrawati
told a press conference on Tuesday
The additional funds would provide more subsidies for state
power utility PT PLN to allow it to cut electricity tariffs and to provide
further subsidies for diesel fuel. Funds would also be given to ministries to
boost infrastructure programs and for poverty alleviation programs.
The announcement came after the government again cut the
price of standard fuel for the third time in six weeks. The price of Premium
grade gasoline was set at Rp4,500 beginning from Thursday.
The steps are expected to boost economic activity, with the
government committing to a deficit of 2.5% of GDP as it strives to improve
conditions for business.
Bank Indonesia (BI) Governor Boediono also gave hope of
lower interest rates when he said on Tuesday that lower inflation provided room
for further cuts, after the central bank lopped half a percentage point off its
key rate at the beginning of the month to 8.75%.
The government also raised Rp5.95 trillion ($532 million) in
a bond auction on Tuesday, almost double its target, which analysts took as a
sign of improving investor confidence in
The government scrapped its debt sales in October amid a
global financial crisis and fears of a severe economic slowdown.
The government plans to return to the international capital
markets in February with the launch of a landmark global Islamic bond (sukuk) that was previously set to raise $1 billion.
Antara also reported that the government plans
to sell another Rp3 trillion worth of bonds in an auction this Tuesday to meet
part of its financing targets under the 2009 state budget.
BUSINESS BRIEFS
MACROECONOMY
Govt. to give business, public additional fiscal stimuli
The government has decided to give the business sector and
the public additional fiscal stimuli under the 2009 state budget to strengthen their
resilience in facing the current global financial challenges, a minister said, Antara reported.
Coordinating minister for the economy Sri Mulyani Indrawati
told a press conference on Tuesday the amount of fiscal stimuli which had
previously been set at Rp12.5 trillion would be increased by Rp15 trillion.
"The Rp12.5 trillion fiscal stimuli has already been
provided in the 2009 state budget law and is to be given in the form of import
duty and value-added tax dispensations," she said after a cabinet meeting.
"They include discounts in electricity tariffs as
announced by the government on Monday and also a diesel fuel price subsidy
given in the form of a price cut and additional expenditures totaling Rp10.2
trillion," Indrawati said.
The minister said the Rp10.2 trillion in fiscal stimuli
would be especially given to ministries or institutions to create employment in
the field of infrastructure or for programs considered effective or having a
high priority level to alleviate poverty.
"We will further discuss the Rp10.2 trillion stimuli
program with other ministers before submitting it to the House of
Representatives," she said.
She said besides increasing employment, the fiscal stimuli
were also meant to promote medium-scale business activity, maintain buying
power, reduce the prices of medicines, cooking oil and commodities in order to
reduce the people’s economic burden.
She said the stimuli would also be given in the form of
subsidy for value-added tax, income tax, electricity tariff cut for industries,
diesel fuel price cut and export financing and guarantees to strengthen the
business sector so that it would have competitive power and resilience.
GDP growth slowed in Q4 of 2008: Minister
"Economic growth could reach 6.2% in 2008, with annual
growth in the fourth quarter likely to be between 5.8-5.9%," Sri Mulyani
Indrawati told a meeting of business leaders.
The economy grew 6.11% in the third quarter from a year
earlier.
Govt. revises budget forecasts for 2009
The government forecast its 2009 budget deficit target to be
2.5% of gross domestic product, from 1.0% previously, Finance Minister Sri
Mulyani Indrawati said on Tuesday, Reuters reported.
Agence France-Presse
reported, Indrawati said the government expects its 2009 revenues to fall due
to lower economic growth.
"The country's revenue will decrease by Rp128 trillion
($11.4 billion), from Rp985.7 trillion to Rp857.7 trillion. This is mainly due
to lower economic growth and (the) exchange rate that has changed,"
Indrawati told reporters after a cabinet meeting.
Indrawati also forecast on Tuesday the rupiah would average
Rp11,000 per dollar in 2009, up from an earlier budget
forecast of Rp9,400.
The government also revised the budget deficit for 2009 to
2.5% of the gross domestic product (GDP) from 1% of GDP previously, as the
lower expected revenues would result in a higher budget deficit target, Dow
Jones Newswires reported.
Indrawati also said the government will set the base crude
oil price target for the 2009 budget at $45 per barrel, down from $80
previously due to sharply lower global crude oil prices.
Further rate cuts likely: BI governor
The central bank governor said Tuesday there remains room
for more interest rate cuts given that inflation is expected to ease this year,
Dow Jones reported.
Bank Indonesia (BI) Governor Boediono said cuts to fuel
prices, electricity tariffs and transportation fares should reduce inflationary
pressures.
BI has said it expects inflation this year to range between
5% and 7%.
Govt. bonds to return 30%, rupiah to gain: ING
Government local currency bonds and the rupiah may advance
in 2009 as investors seek higher yields because of increasing risk appetite,
according to ING, Bloomberg reported on Friday.
The yield on the government’s 10-year bond will fall 2.9
percentage points to 9.25% by December 31 as Bank
“Globally we’ll be seeing economies in recovery,” Condon
said. “At that point, the intense risk aversion that has characterized the last
quarter and beginning of this year will dissipate and people will be looking
more for returns and
Bond target overshot
The government raised Rp5.95 trillion ($532 million) in a
bond auction on Tuesday, almost double its target, which analysts took as a
sign of improving investor confidence in
The government scrapped its debt sales in October amid a
global financial crisis and fears of a severe economic slowdown.
The government plans to return to the international capital
markets in February with the launch of a landmark global Islamic bond (sukuk) that was previously set to raise $1 billion.
Antara reported also reported that the government
announced plans to sell Rp3 trillion worth of bonds in an auction on January 20
to meet part of its financing targets under the 2009 state budget.
INVESTMENT
Total 2008 investment at $17B: Govt.
Total investment in
"We recorded the highest investment in Southeast Asia,
this year the total is $17 billion, while
Three
investors to build ammonium nitrate factories
Three
companies including a foreign investor plan to produce the explosive material
ammonium nitrate with a total investment of $860 million in
State-owned
company PT Dahana plans to invest $450 million in an
ammonium nitrate factory in Bontang,
Dahana will team up with PT Suma Energi
Nusantara to build the factory with a production capacity of 300,000 tons a
year, the largest in
Meanwhile,
PT Multi Nirrotama Kimia, which already has a ammonium nitrate factory at Cikampek,
The two
partners have established a joint venture company, PT Kaltim
Nitrat
REFORM
WB approves $110M loan to help boost tax
revenues
The World Bank on Thursday approved a $110
million loan to help
The Project for Indonesian Tax
Administration Reform (Pintar) is aimed at improving
the performance of
“Indonesia has already embarked on a major effort to
reform its system of collecting tax revenues, most notably by revamping the
Directorate General of Tax, introducing modern compliance management systems,
and passing the Tax Procedures Law in 2008,” said World Bank country director for Indonesia Joachim von Amsberg.
“Through Pintar,
the World Bank sets out to compliment this effort by helping the Indonesian government expand tax bases, both in terms of
increasing the number of tax payers and transactions coming into the tax
system, which would in turn help generate more non-oil and gas tax revenue.”
The project supports
fundamental reforms in both operational and support functions of the tax
administration office with main components of increasing the efficiency of
taxpayer data collection and management, human resource management and
development, compliance management and project and change management.
STATE CONCERNS
Govt.
to take over workers tax liabilities to avoid layoffs
The
government plans to waive workers’ income tax liabilities which were regularly
provided by the corporate sector via benefit packages, Coordinating Minister
for the Economy Sri Mulyani Indrawati said Thursday, The Jakarta Post reported.
By
scrapping this cost, Indrawati expects the corporate sector will be encouraged
to keep workers on despite hard times.
“We will
adjust article 21 on income tax so that the incentive
to avoid layoffs will be bigger than doing it. We will see which sectors (can
receive the incentive).”
Under the
Income Tax law, article 21 arranges tax allowance by companies related with
salaries, wages, honorariums, allowances and other methods of payment to
domestic individual taxpayers which are taxed in respect of jobs, positions,
services and activities.
Unlike in
other countries, most companies in
“If we
eliminate the tax (under article 21), businesses will rethink laying off their workers,” Indrawati said.
The
government also aims to lower the poverty rate from 15.4% to 12% by the year’s
end, she said.
Therefore,
she added, the government would focus on strengthening the financial sector and
protecting food and energy businesses.
WB calls on
The World Bank in a new report issued last week recommends
that
World Development Report 2009 (WDR), entitled ‘Reshaping
Economic Geography’ in East Asia, argues that for growth to be inclusive,
governments in the region, including Indonesia, must promote economic
integration which, at its core, is about the mobility of people, products and
ideas.
Integration should be the pivotal concept in the policy
discussions involving the location of production, people and poverty—in
particular, the debates on urbanization, regional development and
globalization. Instead, all three overemphasize place-based interventions.
“Rapid urbanization in major cities like
Diplomats to keep close eye on trade protectionism
"Trade attachés have been requested to report to us
what governments are doing in response to the financial crisis," said
Trade Minister Marie Elka Pangestu.
"We have to anticipate the possibility of increasing
protectionist policies," she said. "If they did, it would impact on
us too. We must be cautious," she added, without elaborating on how
Trade experts are concerned that the economic downturn will
prompt governments to impose protectionist policies to salvage their own
economies.
SOEs
Semen Gresik plans regional acquisitions
PT Semen Gresik,
The company may hire an adviser this month to identify
potential acquisitions and plan a three-year overseas expansion strategy,
president director Dwi Soetjipto said in an interview.
An overseas acquisition may help Gresik, which relies on
local demand for about 95% of revenue, to raise exports to neighboring
countries in
The company, whose domestic market share is almost equal to
the size of its next two largest rivals, is betting economic stimulus packages
in
Semen Gresik held a 44% share of the Indonesian market in
2008, compared with PT Indocement Tunggal Prakarsa’s
32% and PT Holcim
The company had a cash balance, including short-term
investments, of Rp3.3 trillion ($297 million) as of September 30, and a total
debt of Rp73 billion.
Gresik also plans to invest a separate $1.25 billion by 2014
to build two local cement factories and expand existing units, Soetjipto said. Gresik will borrow about $700 million and
the rest from cash to fund its expansion, according to the company.
SOEs spend less on share buy-back program
Publicly listed state-run companies as of January 7 have
spent less than 20% of the funds which they had allocated for share buy-back
programs, according to the Capital Market and Financial Institution Supervisory
Agency (Bapepam-LK), The Jakarta Post reported.
The program was aimed at helping to stabilize the capital
market, preventing company shares from being heavily undervalued after the
October 2008 stock market collapse.
The low level of spending was partly due to the unexpected
need to hold cash to avoid being hit by liquidity shortages, for example when
encountering problems while seeking short-term loans due to the impact of the
global liquidity crisis.
Ten publicly listed state companies had allocated more than
Rp6 trillion ($500 million) between them to buy back their shares from
investors.
Cement maker PT Semen Gresik Semen Gresik and gas
distributor PT PGN are seeking to extend their share buy-back program this year
as they have spent far less than the funds allocated for the purchase.
State Minister for State Enterprises Sofyan
Djalil said Tuesday the firms had informed him of the
plan and would soon seek shareholder approval again.
Garuda expects 30% increase in 2009 income
National flag carrier Garuda
Garuda director for commercial affairs Agus Priyanto said Thursday that in order to achieve the target
Garuda would increase the number of its new routes and increase operational efficiency.
"This year we will open 18 new domestic flight routes and four
international ones," he said.
The increase in the number of routes is in line with Garuda`s
plan to procure 14 new B737-800 aircraft beginning in 2009.
"At least four new planes are expected to arrive early this year. The
remaining ones will arrive in stages. I don’t remember the amount of investment
needed for this program. Not all of the planes are to be purchased, however.
Some are leased," he said.
Priyanto also said the company would save on
operational costs, especially as a result of lower fuel prices.
In 2008, Garuda set an income target of Rp589 billion but up
to September 2008, it only booked an income of Rp369 billion.
PRIVATE SECTOR
Alfaria to add 400 stores in 2009
Mini-market
retailer PT Sumber Alfaria Trijaya kicked off a moderately successful initial public
offering (IPO) on Thursday by announcing plans to add 400 more stores to its Alfamart chain this year as part of an ambitious Rp500
billion ($45 million) expansion, The
Jakarta Globe reported.
"We
think that there are still a lot of business opportunities in the mini-market
retail business, and we'll use the momentum to expand our business," said Feny Djoko Susanto, the company's
president director, on Thursday.
Henryanto Komala, vice president director, said
Alfaria owns most of its stores with about 23% franchised,
which the company said would be increased to 30% this year.
The IPO
proceeds of Rp135 billion will fund the 400-store expansion, and create four
distribution centers in Solo, Central Java; Balaraja,
Banten;
The rest
of the expansion costs would be financed with the company's internal cash flow,
and possibly from bank loans, which Alfaria would get
from PT Bank Central Asia, Henryanto said.
The
company said that it still expected revenue to rise 20% this year, although
growth would be slower than previous years.
Alfaria's revenue expanded rapidly from Rp2.8 trillion in 2005 to Rp8
trillion in 2008 as its number of retail outlets grew. Sales in 2008 are
expected to rise 30%.
In the
IPO results released on Thursday, the company announced demand for its shares
were oversubscribed by just a few percent, with an issue of 343 million shares
priced at Rp395 a share.
The
company had earlier revised down predictions that its share price could reach
more than Rp400 a share on last year's growth data.
Bosowa sees 15% revenue growth in
2009
PT Bosowa Corp., the largest
diversified business group in South Sulawesi, said it expected to post a 15%
rise in revenue this year to Rp3.3 trillion ($297 million), with growth mostly
driven by government infrastructure projects, The Jakarta Globe reported.
"We are confident about our revenue this year,"
Erwin Aksa, Bosowa's
president director, said on Tuesday. "It's good growth from 2008 revenue
of about Rp2.8 trillion."
Aksa said that the biggest share of
revenue would come from public and private infrastructure projects that the
government has commissioned in a more than Rp50 trillion plan
to boost the weakening economy amid the global downturn.
Aksa also said its PT Cement Bosowa Maros subsidiary, the
country's fourth-largest cement maker, would generate the largest share of
total group revenue at 60%.
"We hope the government will focus on coal-fired power
plants and toll road projects," said Aksa, who
is also chairman of the Young Indonesian Entrepreneurs Association (Hipmi).
Aksa said that construction of
coal-fired plants is important for boosting economic growth. Bosowa is already
benefiting from the stimulus package as import duties for equipment have been
lifted for the power plant it is building in Jeneponto,
The 250-MW power plant contract is worth about $220 million.
When it is completed by mid-2010, it will have the highest capacity of any
power facility in eastern
Astratel takes control of toll road operator
PT Astratel Nusanatra, a subsidiary
of Astra International, has acquired a larger stake in PT Marga
Mandala Sakti, increasing
its ownership of the toll road operator to 62.62% from 34% earlier, Asia Pulse
reported on Wednesday.
Astratel acquired a 28.62% stake from investors from Hong Kong and
Astra
International spokesman Yulian Warman
said the company began to expand business to the infrastructure sector when it
acquired 34% of Marga Mandala
Sakti in August 2005.
He told the
Investor Daily Astratel
will spend Rp145 billion ($14.5 million) this year for toll road repairs.
Advertising expenditure expected to rise 10%
Spending on advertising is forecast to grow only 10% to
exceed Rp60 trillion ($6 billion) this year from around Rp55 trillion last year, advertising agencies said,
Spending in 2008 was about 25% below target as a number of
multinational companies cut their spending for promotion with the arrival of
the global economic slowdown, says Narga Shakri Habib, former chairman of
the association of advertising agencies.
“Political parties and telecommunications companies will be the biggest
spenders,” Narga predicted, saying political parties
will intensify advertisements ahead of the general election in April.
In 2008, political parties spent around Rp1 trillion for
advertisements and the spending will be much larger in the next few months when
the election comes closer, he added.
BANKS
BI may ease bank lending rules: Deputy Governor
Bank Indonesia (BI) may ease regulations covering
non-performing loans in order to make it easier for banks to increase their
lending, BI deputy governor Muliaman Hadad said on Wednesday, as part of wider measures to spur
growth, Reuters reported.
Hadad said the revisions would probably
affect ways of calculating commercial banks' risk-weighted assets and would
take into account borrowers' business prospects and ability to service debt.
"I expect there will be more room for banks to extend
loans," Hadad said. "We cannot just sit on
our hands. We have to make some efforts," he told reporters, adding that
the revisions are due to be announced on January 30.
Hadad declined to give details of the
possible revisions, as these are still being discussed by BI.
As of November 2008, non-performing loans stood at 4%, the
central bank data showed.
ANZ Bank pays $114M to boost stake in Panin
Australia & New Zealand Banking Group Ltd. (ANZ) said it
paid $114 million to increase its stake in PT Bank Panin
to benefit from rising demand for banking products in
The purchase values Bank Panin at
Rp745 a share, or about a quarter more than Monday’s closing prices.
“
ANZ,
“ANZ has been very aggressive in
ANZ, HSBC Holdings Plc, Industrial & Commercial Bank of
China Ltd. and other overseas lenders are expanding in the $433 billion economy
as demand from consumers and small and medium sized companies rises.
Small businesses account for half of the Rp1,246 trillion ($111 billion) of loans outstanding in
Bank Muamalat plans rights issue in H2
Islamic lender PT Bank Muamalat is
planning a rights issue in the second half of 2009 to raise its capital
adequacy ratio (CAR), the bank said on Monday, Reuters reported.
"The lower CAR is the consequence of our financing
growth in 2008. Although the central bank regulates a minimum CAR level of 8%,
the management considers a CAR level of 12% is needed to become a good
bank," M Hidayat, a director at the bank, told reporters.
The bank -- whose total assets rose 20% to Rp12.67 trillion
($1.14 billion) last year -- said it aims to increase its capital adequacy
ratio to about 12% in 2009 from around 10.8% last year.
The official said the rights issue could take place in the
second half of the year, but did not give a value.
Muamalat, majority owned by Islamic
Development Bank (IDB), recorded a 39% rise in its operating profit to Rp308
billion in 2008. It also aims to increase financing by 10% this year, compared
to 22% financing growth in 2008.
The shariah bank said it would
maintain 60%-70% of its financing disbursement to small and medium enterprises
(SMEs), citing their ability to weather the current global crises.
The central bank said on its website its target for shariah banking was for total assets of Rp50 trillion and
Rp87 trillion in 2008 and 2009 respectively. As of November, total assets for shariah banking stood at Rp47.2 trillion.
Soeryadjaya family to take over Bank IFI
The
family of PT Astra International founder William Soeryadjaya
is taking 99% of Indonesian PT Bank IFI, re-entering the banking sector after
16 years, Asia Pulse reported on Wednesday.
The
family stopped business in the banking sector when its Summa Bank collapsed in
1992 when non-performing credits forced it to sell its stake in Astra.
The
family has formed a consortium with the family of Sabar
Ganda Sitorus, a business tycoon from North Sumatra,
to take over Bank IFI, Bank
Bank IFI
director Agus Suyanto said shareholders in the bank
agreed to sell their stake and the acquisition was being processed.
Sabar Sitorus told Bisnis Indonesia the agreement was signed two
weeks ago but the price was still being negotiated.
POWER
PLN to invest Rp57T in transmission networks
State power company PT PLN is to
invest Rp57 trillion in the construction of transmission networks across the
country in anticipation of increased need for electricity in the future, a PLN
official said, Antara reported.
“The funds would come from PLN internally, supported by
funds from the state budget,” PLN president director Fahmi
Mochtar said on Thursday, adding domestic demand for
electricity would reach 57,000 MW per year.
PLN had also reduced its operational costs in 2008, the
company had made efficiencies in its spending at the same time the government’s
subsidy amounted to Rp88 trillion, Mochtar said.
The higher efficiency was achieved among other means by
converting fuel into gas and coal, he added.
PT PLN has set an income target of Rp89 trillion for 2009,
or an increase of about 11.25% from its estimated income of Rp80 trillion for
2008.
"The revenues are expected to increase along with a
rise in customers and efficiency in using fuel," Mochtar
said on Wednesday.
Corporate business profit is projected to reach Rp10.1
trillion, an increase from Rp3.2 trillion in 2008.
However, the 2009 income projection has not yet taken into
account the impact of lowering of basic tariffs in the middle of this month, Mochtar said.
"PLN predicts that lowering of the basic power tariff
would reduce PLN’s income by about Rp1.38 trillion," he said. The
government said earlier it is considering lower electricity tariffs in line
with lower international oil prices.
Mochtar said that in order to maintain the
performance of the company’s finances, PLN would try to propose compensation
through higher subsidies. "We will
ask for a subsidies amounting to Rp1.4 trillion," he said.
PLN on Thursday also announced that it will call tenders for
phase II implementation of the country’s 10,000 MW power generation project in
February.
"The second phase of the 10,000-MW project will be
carried out under an independent power producer scheme," PLN director for
planning and strategic affairs Bambang Praptono said.
Praptono said about 30% of construction work
in the second phase would be carried out by independent power producers and the
remaining 70% by PLN.
The total capacity of the second phase is 11,144 MW, of
which 68% or 7,644 MW will be thermal power plants, 19% or 2,135 MW will be
geothermal power plants, 10% or 1,065 MW will be gas-power plants and 3% or 300
MW will be hydro-powered plants.
Of the 11,144 MW power plants, 18 plants with a combined
capacity of 6,970 MW will be built on Java and 65 others with a combined
capacity of 4,174 MW will be located elsewhere.
OIL & GAS
President cuts fuel prices again
"With this decision we expect to see a direct or
indirect impact on prices of goods," President Susilo
Bambang Yudhoyono told a press conference.
The price of standard gasoline will be cut 10% to Rp4,500 per liter with effect from January 15, from Rp5,000 per
liter, he said.
The price of diesel fuel will be cut 6.3% to 4,500 rupiah
per liter from Rp4,800.
Pertamina to become non-listed public company
State-owned
oil and gas company PT Pertamina will become a non-listed
public company this year to improve transparency in its operations and
management, State Minister for State Enterprises Sofyan
Djalil said, Asia Pulse reported.
With the
new status, Pertamina had to follow market
mechanisms, Djalil said.
Pertamina's balance sheet at the start of 2009 is fairly sound, needing
only minor improvements which would be thrashed out this year, Djalil said on Wednesday.
He said Pertamina performed well but declines in oil prices may
affect its financial performance.
Pertamina's subsidiary PT Pertamina EP meanwhile
posted a net profit of Rp12 trillion ($1 billion) last year, Investor Daily reported.
Govt. urges oil contractors to use local service firms
The government is urging oil and gas contractors to utilize
the services of Indonesian firms in their 2009 projects, as part of efforts to
support domestic economic growth amid the global economic crisis, said State
Ministry for State Enterprises Sofyan Djalil, The Jakarta
Globe reported.
In a meeting on Wednesday with the head of upstream oil and
gas regulator BP Migas, Raden Priyono,
as well as representatives from a number of private contractors and state-owned
companies, Djalil urged foreign and domestic
contractors to work with Indonesian service firms.
"We want to increase the participation of domestic
companies, particularly state-owned enterprises, in oil and gas projects,"
Djalil said.
In 2008, the contribution of domestic procurement of goods
and services in the upstream oil and gas sector reached $2 to $3 billion or
about 58%.
Djalil said the firms' services include
drilling, construction of ports and airports and even food services. SOEs that
stand to benefit include PT Wijaya Karya, PT Adhi Karya, PT Krakatau Steel and
PT PAL
"Ideally, we would like to increase the participation
of domestic service firms in projects by more than 50% from last year," Priyono said.
PGN set to chalk up 20% rise in income
State-owned gas distributor PT PGN said it is set to post a
20% increase in income this year compared with 2008, Antara
reported..
PGN President Hendi Santoso said
the company hopes to distribute up to 800 million metric standard cubic feet
per day (MMscfd) of gas this year, up from around 600
MMscfd in 2008.
MINING
Three options for mining right holders under new law
The government will give holders of existing mining rights
(KPs), three options to bring their mining areas into line with the
restrictions imposed by the recently enacted mining law, so as to help them
avoid forfeiting their concessions if they are incapable of fully developing
them, The Jakarta Globe reported.
Energy and Mineral Resources Minister Purnomo
Yusgiantoro said that one of the options for the
holders of mining rights, normally small- to medium-sized miners, was to share
their concessions with third parties.
"Give those parts of your concessions that have yet to
be developed to other companies," Purnomo told
mining firms representatives at a seminar on the new mining law on Monday.
"Let them then develop the sites."
Under the regulations that will be issued to put the mining
law into effect, mining firms could end up losing some of their concessions if
they fail to develop them within a specific period of time under the
government's "use it or lose it" policy.
A second option, the minister said, would be for miners to
simply hand their concessions back to the government if they are unable to
develop them. Purnomo said that the government would
then put such concessions up for auction.
As for the third option, Purnomo
suggested that mining companies could work together with the government to
ensure the maximum exploitation of their concessions, adding that the
government would help them find partners.
December tin exports seen up 14%
Indonesian tin exports are estimated to have increased 14%
last month from a year ago, but December's volume was the lowest monthly figure
for 2008 as small smelters remained shut due to low prices, the trade ministry
said on Wednesday, Reuters reported.
But the volume was down 13% from November, when 4,381.36
tons were exported.
Seven smelters exported tin in December to
"Exports were still slow because prices have not
recovered. They only met existing shipment contracts," the official said.
The price of tin has fallen 55% from an all-time high of
$25,500 a ton hit last May due to the global economic crisis. On Wednesday, the
price of tin was $11,650 per ton on
Meanwhile, the director for industrial and mining product
export affairs at the Directorate General of External Trade, Hartojo Agus Tjahjono, said on
Wednesday that the Ministry of Energy and Mineral Resources would soon decide
on a national tin production quota, Antara reported.
Officials said the restriction in production is expected to
help maintain the falling price of tin.
"We plan to offer a strategic stake to state-owned
mining company PT Antam," NALCO director BL Bagra
said, adding NALCO will hold a 50% stake in the venture.
The project involves setting up a 500,000 ton-a-year smelter
and a 1,250-MW captive power plant.
Bagra said the company is in talks with
three coal companies to buy a majority stake in one, which would help in
sourcing coal for the project. Alumina will be shipped from
Last month, NALCO signed an agreement with RAK Minerals
& Metals Investments, a unit of
The project will only start after a draft report on its
viability is ready in six months to a year.
RAK
Minerals, which owns a coal mine, has also offered coal for the project, an
option NALCO may consider if it is unable to buy a stake in any of the three
coal companies, Bagra added.
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[1] This Trade and Investment News is a publication of the Coordinating
Ministry for Economic Affairs of the