THE COORDINATING MINISTRY FOR ECONOMIC AFFAIRS
REPUBLIC OF INDONESIA
Main Building, Ministry of Finance, Jl. Lapangan Banteng Timur No.2-4 Jakarta 10710
Tel: (021) 351-1178 Fax: (021) 351-1186 Website: http://www.ekon.go.id
Trade and Investment News, 21 April 2008
Major political parties shocked by reversals in local elections
Police pledge to protect members of Ahmadiyah sect
West Kalimantan police chief moved after illegal logging syndicate broken up
Malacca Strait pirate-free last year due to joint patrols
Investment board chief says commodities to continue to drive interest
Motorcycle, car, cement and retail sales all strong in first quarter
Govt. debt grows $10.8B on rupiah fall
Govt. issues Rp3T in floating-rate bond
First quarter investment realization up 80% on year
United Fiber System to go ahead with $893 million pulp mill
Regulation approved to open ports to private interests, foreign holdings in domestic port
topped at 49%
Tourism minister aims for 8 million arrivals in 2008
Legislators favor strategic sale of Krakatau Steel stage over IPO
PT Telkom plans $500 million share buy-back
Motorcycle, car sales higher in first quarter, Suzuki boosts exports
Mutlifinance industry sees 17.9% growth in January
Central bank to introduce measures to allow greater credit disbursement
Bank Mandiri predicts 2008 loan growth to top 22%
State Utility PLN wins Rp5.7 trillion loan for five plants
Oil & gas
Singapore’s Sembcorp to buy gas from Premier Oil in 18-year $5.5 billion deal
Husky sells 50% of Madura block to CNOOC to speed development
PT Aneka Tambang wins approval for Herald Resources takeover
Government to impose production quota on tin bar exports
Major parties shocked by regional poll losses
Indonesia’s two major political parties, Golkar and the Indonesian Democratic Party of
Struggle (PDI-P), have been plunged into introspection following poor showings in regional
elections in West Java and North Sumatra.
Analysts say the preliminary results in both provinces signal a change in voter behavior and
could be a harbinger of things to come in next year's legislative and presidential elections.
”The results will be a heavy blow to the two political giants - Golkar and PDI-P. It shows
that their machinery in the provinces has failed,” Muhammad Qodari, executive director of
Indo Barometer think-tank, said after the West Java result. “This election sees the rise of
the PKS for knocking out the two giants.”
In West Java, the ‘outsider’ candidates of Ahmad Heryawan and Dede Yusuf pulled off a
victory which must have been a surprise even to themselves, Kompas reported.
Backed by PKS and the National Mandate Party (PAN), they were contesting the positions of
governor and deputy governor against the incumbent governor, Danny Setiawan and his
running mate, Iwan Sulandjana, and retired general and former Transportation Minister
Agum Gumelar and Nu’man Abdul Hakim.
Agum and Nu’man were supported by the PDI-P and a host of other parties.
The apparent victory of the PKS-PAN duo demonstrates that where the nationalist vote is
split, the way is left open for the Islamist parties to make gains, a message that will no
doubt be digested quickly by both Golkar – which backed the incumbent - and PDI-P.
In North Sumatra, the Regent of Langkat, Syamsul Arifin, 56, and running mate Gatot
Pudjonugroho, 46, won 28.7% of the vote to win in a five-cornered fight, The Straits Times
Syamsul is a former Golkar politician who switched to the United Development Party (PPP).
He and PKS cadre Pudjonugroho were also backed by the Star Crescent Party (PBB).
Golkar executive Priyo Budi Santoso was stunned by the result in North Sumatra,
traditionally a party stronghold. “We are shocked by the election result because it came
the same time as the shocking result in West Java,” he said.
He said the defeat will spur the party to review its strategy and its method of choosing
The executive director of the Center for Electoral Reform (CETRO), Hadar N. Gumay, said
the defeats of candidates endorsed by major parties in two regional elections must be taken
as a sign of things to come.
Gumay said endorsement from major parties such as Golkar and the Democratic Party of
Struggle no longer guarantee election success.
Police pledge to protect Ahmadiyah
National Police headquarters has ordered the force's rank and file to protect the activities
and houses of worship of the Ahmadiyah sect from acts of violence by any other group in
society, Antara reported
"The protection is meant to prevent violent and anarchic acts from being committed against
Ahmadiyah followers," National Police spokesman Insp. Gen. Abubakar Nataprawira said
He said police chiefs across the country had been instructed to ensure the safety of
followers of Ahmadiyah and their places of worship.
Nataprawira added the protection of followers of the Islamic sect was part of the National
Police responsibility to protect every Indonesian citizen regardless of his or her religious
Vice President Jusuf Kalla said Friday that there would be no detentions of the followers of
Ahmadiyah after the country's top Islamic authority body the Ulema Council (MUI) and the
Attorney General’s Office outlawed the sect earlier in the week.
The vice president said that it had only been ruled that the teaching was not in line with the
true Islamic teaching.
"It does not mean that the followers must be arrested," he told a press conference at his
VP: Islamic oil nations should ‘share wealth’
Vice President Jusuf Kalla called on rich Islamic nations to share their wealth with poor
nations, Kompas reported on Thursday (17/4/08).
He appealed to Islamic law to suggest that rich oil-producing nations should share their
wealth with their fellow Islamic nations who are struggling with the burden created by rising
crude oil prices.
"That wealth, according to Islamic law, has been entrusted to them by Allah. Look at the
current situation. Which countries are the richest? Almost all of the richest nations are
Islamic nations; Saudi Arabia, Qatar, Kuwait, United Arab Emirates, among others. Their
wealth is vast. However, who are the poorest nations? That's also Islamic nations, such as
Bangladesh, Somalia and others," he said.
Kalla made the comments at the opening of the 7th Congress of the Indonesian Students
Forum on Shariah, attended by around a hundred students and the rector of the State
Islamic University Syarif Hidayatullah.
Countdown starts for Bali bomber executions
The executions of the three 2002 Bali bombers are set to proceed, with the trio rejecting the
idea of a presidential pardon and Indonesian courts appearing to rule out further appeals,
The Sydney Morning Herald reported.
Prosecutors were organizing firing squads to carry out the death sentences, a spokesman
for Indonesia's Attorney General said on Monday.
Bonaventura Nainggolan confirmed that Amrozi, Ali Gufron and Imam Samudra had stated
they would not seek a pardon from their death sentences for carrying out the 2002
bombings, which killed 202 people including 88 Australians.
"In this case the process towards execution has started under the co-ordination of Bali's
prosecutors’ office," Nainggolan said.
Corruption commission makes more arrests
The Corruption Eradication Commission (KPK) interrogated one sitting and one retired
lawmaker Thursday over their alleged involvement in a bribery scandal that has landed the
Bank Indonesia governor in jail, a spokesman said, Agence France-Presse reported.
Antony Zeidra Abidin and Hamka Yandhu are alleged to have received part of Rp100 billion
in Bank Indonesia funds illegally handed to members of a parliamentary commission
deliberating amendments to a finance bill, KPK spokesman Johan Budi said. Yandhi is still a
member of the commission, while Abidin, a former member, is now the deputy governor of
The KPK arrested central bank governor Burhanuddin Abdullah over the case a week earlier.
Two other Bank Indonesia officials were detained in February on suspicion of involvement in
the corruption case, which dates back to 2004.
Meanwhile the Attorney’s General Office (AGO) opened an investigation into West Nusa
Tenggara Governor Lalu Serinata over alleged corruption.
"The AGO received official permission from President Yudhoyono on Thursday (April 10) to
interrogate the incumbent governor," said West Nusa Tenggara chief prosecutor, HM Amari,
adding the investigation is in connection with an alleged bribery case involving him and two
President invited to G8 meeting
President Susilo Bambang Yudhoyono has been invited to attend the G8 Summit in Japan
and has accepted the invitation, a diplomat said Thursday.
"President Yudhoyono has confirmed his acceptance of Japan's invitation to attend the G8
Summit on July 7 to 9," Japanese Deputy Ambassador to Indonesia Satoru Satoh was
quoted as saying by Antara.
Dr. Yudhoyono will join other prominent guests from India, Australia, South Korea, China,
South Africa, Brazil and Mexico, he said.
"President Yudhoyono is invited to the summit of the most-developed nations because Japan
considers that Indonesia plays a strategic role in the region, particularly concerning climate
change," he said.
Japanese and European Union (EU) leaders are expected to agree to propose a new
framework for energy efficiency at the meeting, a Japanese news report said Wednesday.
The draft of the statement also outlined Japanese and EU agreement on improving
international and bilateral cooperation on food safety, establishing an "effective and
comprehensive" post-Kyoto carbon-capping framework, and implementing International
Monetary Fund recommendations to help unwind global imbalances, Kyodo news agency
Aimed at bringing emerging economies into the fight against global warming, the plan would
allow countries to set their own goals and plans to save energy. Their efforts would be
monitored by the International Energy Agency (IEA), and developed countries would provide
financial and technological help.
W. Kalimantan Police chief moved over logging
In response to a major illegal logging network busted last week in Ketapang, West
Kalimantan, the National Police Chief dismissed West Kalimantan Provincial Police Chief Brig
Gen Zainal Abidin Ishak for letting illegal logging activity in the province take place
unhindered, Agence France-Presse reported.
Brig. Gen. Zainal Abidin Ishak would be replaced by Brig. Gen. Natakusuma, formerly head
of the National Police's Control Command Center, spokesman for National Police
Headquarters Insp. Gen. Abubakar Nataprawira said Wednesday (16/4/08).
Apart from Brig. Gen. Ishak, Adj. Snr. Comm. Gustav Leo who was installed as Ketapang
District Police Chief only on March 23 was also moved from his post for the same reasons.
Meanwhile, former Ketapang District Police Chief Adjunct Senior Commissioner Akhmad
Sunan, the head of the South Kalimantan Provincial Police's Security and Professional
Department, was also moved to Jakarta to take a desk job at National Police Headquarters.
Last week, the National Police arrested a number of West Kalimantan police officers
suspected of involvement in illegal logging operations. The detained police officers include
Ketapang's former police chief, Adj. Snr. Comm. Akhmad Sunan, former Ketapang Police's
crime unit Adj. Comm. Khadaffi and former Ketapang Water Police Post Chief First
Inspector Agung Roy.
A timber mafia has been operating in the area for years, according to Tempo magazine. A
syndicate involves traders, loggers, members of the Forestry Office, police officers, officials
of the Forestry Department and authorities from the local regency government.
A joint team from National Police headquarters and the Forestry Department estimates that
state losses amount to Rp32.4 trillion annually, equivalent to 26 times the 2008 regional
budget for West Kalimantan province.
Malacca Strait pirate-free last year due to joint patrols
The strategic Malacca Strait was pirate-free last year due to joint maritime and air patrols
with neighbors Indonesia and Singapore, Malaysia's deputy air force chief said on April 13,
Agence France-Presse reported.
The maritime corridor, which handles 30% of all sea transport globally, was prone to attacks
in the 1990s but joint action in the last few years has reduced piracy to zero, Bashir abu
Bakar told state news agency Bernama.
"From January to late December 2007, we recorded zero percent pirate attacks in the
Malacca Strait and also recorded a reduction in pirate attacks in the waterways of Sabah
and Sarawak (in East Malaysia," he said.
"(Malaysia's) Maritime and air patrols carried out with Indonesia and Singapore through the
'Eyes in the Sky' program introduced two years ago have worked in reducing acts of
violence and robbery in the straits," he added.
Earlier this year, the International Maritime Bureau, a piracy watchdog, commended
Indonesian authorities for their "positive action" to reduce attacks, particularly in the straits.
Commodities to drive investment: BKPM
The country's investment sector will grow 15.2% this year despite fears of global economic
woes, the chief of the investment board (BKPM) said, while a survey by ING Bank placed
Indonesia third on the list of countries likely to come out best from the crisis, after China
BKPM chief M. Lutfi said rising prices of primary commodities will continue to attract
investment, Asia Pulse reported Tuesday (15/4/08).
In the first quarter of 2008, the value of implemented projects shot up 80% from $4.48
billion in the same period last year, he said. Investment in telecommunications, pulp and
paper projects accounted for the largest portion during the January-March period.
Growing demand for working capital credits, up to Rp188 trillion in February from Rp183.8
trillion in December, 2007 indicated continued expansion of the investment sector, an
official of the National Development Planning Board (Bappenas) said.
The finance ministry however predicted that the global financial crisis will have an impact on
investment in Indonesia late this year or early next year.
Head of fiscal policy Anggito Abimanyu confirmed the picture of the current situation painted
by Lutfi, but said a slowdown was likely in around six months.
ING Bank, in a quarterly ‘dashboard’ investment survey, ranked Indonesia as the third most
optimistic market after China and India, The Jakarta Post reported.
The survey measures and tracks investor sentiment and behavior from 13 Asia-Pacific
markets, with each market assigned an investor sentiment score ranging from 0 to 200.
India, China and Indonesia recorded the highest level of investor optimism, scoring 168,
136 and 131 respectively.
Other countries surveyed were Hong Kong, South Korea, Malaysia, the Philippines,
Singapore, Thailand, Taiwan, Japan, Australia and New Zealand.
ING Asia chief investment officer Hou Wey Fook said despite the relative level of confidence
there would be effects.
He said 58% of Indonesian investors claimed the crisis had somehow affected their
investment decisions during the first three months of the year.
"It is likely GDP growth here will be impacted marginally and will be driven mainly by inter-
regional trade and domestic growth," he said.
Figures from a range of industries continued to show positive development on last year’s
Motorcycle sales rose 37% to 1.44 million in the first quarter from the same period last
year, PT Semen Gresik – the country’s largest cement producer – reported 8.1% first
quarter sales growth, and retailer PT Ramayana Lestari Sentosa said its sales in the first
quarter of this year were estimated to rise 24% to Rp1.04 trillion ($111 million) up from
Rp839.3 billion year-on-year.
Meanwhile Vice President Jusuf Kalla said Friday the government expects to decide by July
whether to increase fuel prices as crude oil continue at record highs.
"There is still time to make adjustments if it is indeed needed," Kalla said, when asked
about government subsidies on oil prices in the light of rising world crude prices. "The
decision could be made by having a one-day meeting, isn't it? It would be between May to
July," Reuters reported him as saying.
State utility PT PLN sealed a syndicated loan of up to Rp5.7 trillion ($619.90 million) from
domestic banks to finance the construction of five coal-fired power plants, according to
Share prices closed 0.3% higher on Friday for its fourth straight day of gains, closing at
2,349.27, giving a gain of 2% over the week. The rupiah was trading at 9,190/9,195 to the
Govt. debt grows $10.8B on rupiah fall
The government's foreign debts increased in rupiah terms by Rp97.74 trillion ($10.8 billion)
this year on the falling value of the local currency, Asia Pulse reported Tuesday (15/4/08).
Based on the government's financial report for 2007, the government's foreign debts in
2007 totaled Rp1,427.8 trillion, up from Rp1,330.1 trillion in 2006.
Director of accountancy and financial reporting at the finance ministry Hekinus Manao said
the deficit in the government's balance has declined over the past years - from Rp500
trillion in 2004 to Rp200 trillion in 2005 and to Rp110.3 trillion in 2006.
Manao said the deficit should not cause much concern as any loan received is guaranteed
with the capability of the government to increase revenues.
The government does not mortgage state assets for loans, he said.
Govt. issues Rp3T in floating-rate bond
The government issued Rp3 trillion ($320 million) of floating-rate bonds Tuesday (15/4/08)
with a coupon rate of 7.83%, the Finance Ministry said, Dow Jones reported.
The amount issued was in line with the government's target.
The government plans to raise a total of Rp177.8 trillion through issuing bonds at home and
overseas this year to help finance its expected budget deficit.
1Q investment realization up 80% on year
Indonesia recorded an 80% on-year increase in actual investment in the first quarter of the
year, head of the official Investment Board (BKPM) Muhammad Lutfi said Monday
(14/4/08), Dow Jones reported.
He added that investment in telecommunications, pulp and paper projects accounted for the
largest portion during the January-March period.
Based on official data at BKPM, implemented investment projects were valued at $14.4
billion in 2007, up 71.69% from the previous year.
In the first quarter of 2008, the value of implemented projects shot up 80% from $4.48
billion in the same period last year.
The data recorded by the board excludes investment in the oil, gas, mining, and financial
Lutfi predicted that the country's investment sector will grow 15.2% this year. Rising prices
of primary commodities will contribute to the investment growth, he said.
Growing demand for working capital credits, up to Rp188 trillion in February from Rp183.8
trillion in December, 2007 indicated continued expansion of the investment sector, an
official of the National Development Planning Board said.
Head of fiscal policy at the finance ministry Anggito Abimanyu said the increase in the
realization of direct investment in the first quarter of 2008 showed that the global economic
slowdown had not affected flows of investment into the country.
But, he said, a downturn could be expected late this year or early next year.
Way paved for Unifiber $893M pulp mill
United Fiber System (Unifiber) has finally paved the way for the construction of its long
delayed $893 million pulp mill project in Indonesia, Singapore's Business Times reported
The Singapore-listed forestry, pulp and construction group said that its wholly owned
subsidiary, PT Marga Buana Bumi Mulia (PT MBBM), had signed the engineering,
procurement and construction (EPC) contract with China MCC20 Construction Co Ltd., the
group's new partner for the project.
Construction work will commence within 90 days of the date of the contract and the mill is
expected to be completed within 30 months after the EPC contract's effective date, which
will come after some preliminary work on matters such as project scheduling.
When completed, the breached hardwood kraft pulp mill in South Kalimantan will have a
capacity of 600,000 air-dry tons per annum.
MCC20 is now responsible for the design, engineering, construction and procurement of all
machinery and equipment required to set up a complete pulp mill in Indonesia for about
Unifiber said that it is currently procuring the financing for an advance payment of about
$223 million for the development costs that it is responsible for, and has executed non-
binding term sheets with two short-listed potential investors.
GM looking to boost assembly capacity
General Motors Corp (GM) is looking into the possibility of boosting its assembly capacity in
Indonesia amid plans to use the country as an Asian production base for one of its models,
a company official said Wednesday (16/4/08), Dow Jones reported.
"GM is currently discussing the plan with related ministries," said Mukiat Sutikno, managing
director of PT General Motors Indonesia.
He said he couldn't give the estimated size of the investment as that will depend largely on
the vehicle model that the company will assemble.
The company's assembly facility east of Jakarta can now produce only 20,000 units a year.
GM targets to sell 3,000 units of vehicles in Indonesia this year, up from 1,400 units last
To achieve the target, the company on Wednesday launched a new sport utility vehicle for
the Indonesian market. The company may launch two more models before the year-end,
Malaysia's TDM to develop plantation land
TDM Bhd of Malaysia has signed a heads of agreement (HoA) with its subsidiary, PT Rafi
Kamajaya Abadi, and H. Rahman to acquire and develop 30,000 hectares of oil palm
plantation land, Asia Pulse reported Monday (14/4/08).
The land located in West Kalimantan will be developed into an oil palm plantation under a
proposed joint venture, it said in a statement. Total investment is RM320.14 million ($100
TDM said it will fund the investment for the joint venture through internally generated funds
and/or bank borrowings.
The statement said that in 2007, TDM had, via PT Rafi, acquired 10,000 hectares of land in
Indonesia for oil palm plantation business.
It said the joint venture will allow TDM to enjoy economies of scale in its plantation
operations, as the land is located next to its existing oil palm plantation business.
Foreign share in domestic port business limited to 49%
The government is to open the port sector for investments from both national and foreign
parties starting from next year following the approval of a government regulation on
investments in the port sector, Bisnis Indonesia reported Friday (18/4/08).
However, the government will impose a restriction that foreign parties will only be allowed
to own a 49% stake maximum in a domestic port business.
Minister of Transportation Jusman Syafii Djamal said the department would soon complete a
government regulation (PP) on investment in the port sector.
"In the port administration sector, foreign companies are only allowed to own a 49%
Therefore, if a foreign investor interested in making investments in the port sector, they
have to join hands with national investors, either private or with state-owned ones," he
He added that a presidential regulation (PP) on the issue was urgent in order to enable
national and foreign private companies to immediately make investments in Indonesia. "The
PP will also create certainty for state port operator (Pelindo) in administering domestic
ports," he said.
8 million foreign tourist arrivals this year: minister
Tourism Minister Jero Wacik said on Wednesday (16/4/08) he was optimistic that the
foreign tourist arrival would reach 8 million people this year, Xinhua reported.
The minister said that the prediction was based on measures carried out by the government
to woo foreign tourists in the country, including the promotion and the extension of the
implementation of visa on arrival to 63 countries.
"In January, the number of foreign tourist arrival rose by 13% and in February by 15%, or
to about one million," he said.
Last year over 5.5 million foreign tourists arrived in Indonesia, he said.
He also said that the government would give permits to foreign airlines to increase the
frequency of flights from Singapore to Indonesia.
"More seats will be given to foreign airliners, so they can carry more people from Singapore
to Indonesia," he said.
A survey of the Singapore airline showed that about 30% of its passengers coming to
Singapore wanted to come to Indonesia, but they could not come to the country due to the
lack of flights, the minister said.
Lawmakers prefer selling KS to strategic investors
Lawmakers suggested sales of 40% of PT Krakatau Steel (KS) to strategic investors rather
than launching initial public offering (IPO) in privatizing the state owned steel maker, Asia
Pulse reported Monday (14/4/08).
The suggestion came after report that the world's largest steel maker Arcelor Mitta from
India is eyeing 40% of KS's shares.
However, the management of KS has indicated the priority would be IPO in seeking to
privatize the company.
State Minister for State Enterprises Sofyan Djalil said on Tuesday concerns over the current
state of the global economy and capital markets were expected to dampen the appetite of
public investors, should the company be privatized by an IPO.
However, he said the government would carry out further study before deciding which
option should be used to privatize the nation's biggest steel maker.
The minister's statements were hot on the heels of a widely reported interest of Arcelor
Mittal, the world's largest steel producer, in Krakatau Steel.
Arcelor has been reported to be eyeing up to a 40% stake in the Indonesian company.
The government earlier said it hoped to earn up to Rp3 trillion ($333 million) from an IPO in
which KS would sell 30% of its shares.
Last year, KS, which has 10 subsidiaries, produced 1.76 million tons of hot rolled coils and
566,744 tons of cold rolled coils.
Telkom plans $500M share buyback
PT Telkom plans to spend around $500 million in a share buy-back, its chairman said on
Wednesday (16/4/08), Reuters reported.
Tanri Abeng said on the sidelines of a conference in Dubai that the company was also
sticking to its 2008 profit growth target of 10-12%.
"We are still keeping to our growth objective, 10-12%," he said, adding that Telkom was
looking into bidding for cellular or fixed-line licenses in developing countries such as Sri
Lanka, Bangladesh and nations in Africa.
He added that the cellular phone market in Indonesia was seeing 30-40% annual growth.
Semen Gresik Q1 sales up 8.1%
The biggest maker of cement in the country by volume, PT. Semen Gresik, said Monday
(14/4/08) its first-quarter cement sales grew 8.1% from a year before to 4.08 million tons,
supported strong domestic demand, Thomson Financial reported.
The company sold 3.85 million tons of cement in the domestic market, 14.6% more than a
National cement consumption grew 16.8% to 8.78 million tons in the first quarter.
Meanwhile, Asia Pulse reported Monday, that the government has given the go ahead to
Semen Gresik to sell its three subsidiaries.
The sales of the three non-cement subsidiaries operating in production and distribution will
allow the company to focus on its core business, Roes Aryawidjaja, a deputy at the office of
the state minister for state enterprises said.
PT Semen Gresik has six subsidiaries including two cement producers - PT Semen Padang
and PT Semen Tonasa. Other subsidiaries operate in other lines of business including
industrial estate, cement bagging and plasterboard industries.
Merpati upgrades to Boeing 737-300/400
State-owned PT Merpati Nusantara Airlines said it has decided to replace all of its Boeing
737-200 aircraft with Boeing 737 300-400 series for fuel efficiency, Asia Pulse reported
Corporate secretary Purwatmo said currently the airline, which serves mainly domestic
flights, operates six Boeing 737-200 aircraft.
All Boeing 737-200 aircraft will be replaced starting this month to reduce operating cost and
the process is to be completed in the middle of this year, Purwatmo said, adding that the
Boeing 737-300 is 20% more fuel efficient.
Merpati also has three Fokker-100 aircraft now under repair to be put into operation in July.
Q1 motorcycle sales rise 37%, led by Honda
Motorcycle sales in Indonesia rose 37% to 1.44 million in the first quarter from the same
period last year, led by Honda, data from an industry group showed on Monday (14/4/08),
Thomson Financial reported.
In March alone, motorcycle sales increased to 494,956 from 470,977 in the previous month
and 363,855 in March 2007, the Indonesian Motorcycle Producers Association (AISI) said.
Indonesia is the world's third-biggest motorcycle market after China and India.
The AISI has projected motorcycle sales to grow 15% this year from the 4.69 million bikes
sold in 2007.
The association said sales of Honda bikes rose 41% to 642,762 units in the first quarter.
Sales of Yamaha bikes rose 32% to 576,633.
Suzuki car exports surge 83% in Q1
Exports of Suzuki APV cars shot up 83% in the first quarter of this year, giving greater
optimism to its Indonesian producer of achieving the export target this year, Asia Pulse
reported Wednesday (16/4/08).
PT Indomobil Suzuki International (ISI) said exports of cars of the all purpose vehicle type
(APV) reached 6,100 units in the first three months of this year, up from 3,325 units in the
same period last year.
ISI spokesman Johanes Saragih said exports are expected to reach 20,000 units, exceeding
the export target of 18,000 units set earlier.
Last year, the company exported 14,004 units of Suzuki APV cars to a number of countries,
though the trade was mainly dominated by exports to Thailand and Saudi Arabia.
Meanwhile major vehicle producer PT Astra International sold 66,682 vehicles in the first
quarter, 44% more than a year before, the company said Wednesday, Thomson Financial
reported. Industry-wide sales rose 61% to 135,607 vehicles in the first quarter.
Multi-Finance industry grows 16.79% yr-on-yr
The outstanding credits of the country's multi-finance industry grew 16.79% to Rp109.22
trillion ($11.9 billion) in January 2008 compared to the previous year, Asia Pulse reported
Consumer finance still dominated credit disbursement, accounting for 62.85% or Rp68.65
trillion of the outstanding credits, or an increase of 17.77% from Rp58.29 trillion in the
same period last year.
Dennis Firmansyah, the secretary general of the association of financing companies, noted a
slower rate in the growth of consumer finance.
In December 2007, consumer credits grew 17.91% to Rp67.56 trillion from Rp57.3 trillion a
Firmansyah predicted consumer finance will continue to dominate non-bank financing
business, especially in the automotive financing market.
Bhakti Investama increases stake in toll operator
Publicly-listed investment company PT Bhakti Investama, has increased its stake in toll road
developer and operator PT Citra Marga Nusaphala (CMNP) to 26.96%, Asia Pulse reported
Bhakti Investama increased its stake through its subsidiary PT Bhakti Securities, which had
acquired 7.6% of CMNP's shares from the market at a price of Rp200 billion, the newspaper
Investor Daily reported.
CMNP corporate secretary Uus Sumirat confirmed the acquisition, saying that Bhakti
Securities had increased its stake in CMNP to 7.81% from 0.21% earlier.
In 2007, CMNP reported income amounting to Rp496.2 billion, up 4.5% from Rp474.7 billion
in the previous year.
Prudential Life posts 24% increase in net profit
Life insurance company PT Prudential Life Assurance, reported a 24% increase to Rp642
billion ($71 million) in net profit in 2007 on hefty premium income, Asia Pulse reported
The premium income of the subsidiary of the London-based Prudential Plc totaled Rp5.5
trillion ($611 million), up 112% from the previous year.
Unit-linked products accounted for 90% of the premium income last year and the rest or
about Rp460 billion from sharia product, company President Kevin Holmgren said.
Holmgren said new policyholders accounted for Rp3.6 trillion of the premium income and old
clients contributed Rp1.9 trillion
Ace Hardware sees 2008 net profit up 97.5%
PT Ace Hardware Indonesia is predicting a sharp rise in net profit this year helped by an
increase in sales as it expands its store network, Dow Jones reported Thursday (17/4/08).
The company expects annual net profit to rise 97.5% this year to Rp118.5 billion ($128
million), Ace's commissioner Tjiptono Darmadji said, while net sales should gain 36.5% to
Driving the growth of the Indonesian franchise holder of Illinois-based Ace Hardware Corp.
is an expansion of its network of stores, which sell a wide range of consumer products
including home appliances, bathroom fittings and furniture.
BI to issue 6 banking policies this month
Bank Indonesia (BI), the country's central bank, said on Wednesday that it is scheduled to
issue a package of six banking policies later this month to give commercial banks leeway in
extending loans, Asia Pulse reported Thursday (18/4/08).
The package of banking policies is necessary for the banking industry to face current
pressures on the Indonesian economy, Bank Indonesia Deputy Governor Muliaman D Hadad
He expressed hope the policies will boost the national banks to increase the amount of their
loans despite global economic pressure.
The package also contains the reduction of weighted risk in the calculation of risk-weighted
assets for corporate bonds owned by banks. This policy is meant to encourage the capital
In addition, the package will also deal with rating agencies recognized by the central bank.
To date, there are three credit rating agencies recognized by BI. They are PT Pemeringkat
Efek Indonesia (Pefindo), Fitch Indonesia and Moody's Indonesia.
Mandiri sees '08 loan growth top 22%
The largest lender in the country, PT Bank Mandiri, said on Friday (18/4/08) its loan growth
this year can exceed the 22% target, helped by a commodity boom and infrastructure
projects, Reuters reported.
The optimistic outlook from Agus Martowardojo, president director of the state bank, beats
a central bank forecast of around 20% loan growth in the country's $200 billion banking
"Although global market conditions are not conducive we have some infrastructure projects
that have not been fully realized and a booming commodity sector," Martowardojo said,
"I am optimistic that we can grow above 22%," he said, referring to loan growth.
Separately, the country's second largest lender by assets, PT Bank Central Asia, said the
bank remained optimistic of achieving its full-year target of increasing its outstanding loans
by Rp14 trillion, despite a slow first quarter.
Jahja Setiaatmadja, vice president director of BCA, said its outstanding loans by the end of
the first quarter were up by only about Rp2 trillion to Rp84 trillion ($9.14 billion).
PLN secures Rp5.7T syndicated loan for five plants
State electricity company PT PLN said Wednesday (16/4/08) it has secured a syndicated
loan of up to Rp5.7 trillion ($619.90 million) from domestic banks to finance the
construction of a number of coal-fired power plants, Thomson Financial reported.
Under its "crash program", PLN is to develop an additional 10,000 MW of electricity
The government plans to build coal-fired power plants across the country by 2010 to ease
the power shortage.
Banks that have agreed to extend financing to PLN include state-run bank PT Bank Mandiri,
PT Bank Negara Indonesia, PT Bank Rakyat Indonesia, PT Bank Mega and PT Bank Central
Asia, said Yogo Pratomo, a PLN official.
He said PLN has secured bank loans to finance the construction of five power plants,
including the Suralaya coal-fired power plant for Rp740 billion, the Paiton power plant for
Rp600 billion, the Labuan power plant for Rp1.19 trillion, the Indramayu coal-fired power
plant for Rp1.27 trillion and the Rembang power plant for Rp1.91 trillion.
PLN also said it is considering issuing medium-term notes worth $2 billion later this year to
help finance constructions of several power plants, an official said Friday, Dow Jones
Finance director Setyo Dewo Anggoro told reporters that PLN is also looking to issue rupiah-
denominated bonds later this year to raise funds for working capital. He didn't mention the
size of the planned bond.
If the government approves the plans, PLN hopes to tap the market in the second half of
the year, he said. He added the company is being advised by UBS for the two fund-raising
OIL & GAS
Sembcorp Unit closes $5.5B gas deal
Singapore's Sembcorp Gas has signed a deal worth $5.5 billion to buy 100 million standard
cubic feet of natural gas from Premier Oil Plc's Indonesian unit, officials from Sembcorp and
energy regulatory body said Tuesday (15/4/08), Dow Jones reported.
The Sembcorp Industries unit signed an agreement to buy the gas over 18 years beginning
2011 for around $10-$11 per million British thermal units, assuming oil prices of $105 a
barrel, said Budi Indianto, head of marketing at Indonesia's oil and gas regulatory body
Sembcorp said in a statement that under the agreement, it will import 90 billion British
thermal units of gas a day from the Natuna oil and gas block.
Indianto said the gas will be sourced from Premier's Gajah Baru concession within the
The gas will primarily be used to generate steam needed to meet growing demand on
Singapore's Jurong island, Sembcorp said.
Husky sells half of gas field to CNOOC
Canada's Husky Energy Inc said on Thursday (17/4/08) it has agreed to sell a half interest
in a natural gas field to China National Offshore Oil Corp for $125 million in order to speed
its development, Reuters reported.
Husky, Canada's No. 3 oil explorer and refiner, said it and CNOOC have agreed to jointly
develop the offshore Madura BD gas field, 40 km north of East Java in the Madura Strait.
The Canadian firm, majority controlled by Hong Kong billionaire Li Ka-shing, has already
partnered with CNOOC on its offshore China holdings.
Husky has so far identified 515 billion cubic feet of gas on its Madura property and 23
million barrels of natural gas liquids.
Production from the field is expected to begin in 2011.
Antam wins approval for Herald takeover
State-owned PT Aneka Tambang said Friday (18/4/08) it had won shareholder approval to
acquire Australian miner Herald Resources Ltd., Reuters reported.
The planned acquisition will enable state-run Antam and its partner in the bid, China's
Shenzhen Zhongjin Lingnan Nonfemet Co Ltd 000060.SZ, to tap Herald's Dairi zinc and lead
project in North Sumatra.
Herald Resources has recommended to its shareholders to accept Antam and Zhongjin's
A$500 million ($469.5 million) offer.
Antam and Zhongjin have jointly offered to pay A$2.50 for each Herald share, after
Indonesia's largest coal miner, PT Bumi Resources, offered to pay A$2.25.
Antam, which produces nickel ore and smelts ferro-nickel, has said in the past it wants to
boost gold output. It aims to produce 15 tons of gold a year by 2017, from around 3 tons a
Antam is now looking at acquiring a 5% stake in the Martabe gold project in North Sumatra,
currently 100% owned by Australia's Oxiana Ltd., Bisnis Indonesia reported Wednesday
"I cannot disclose the details but we are negotiating to buy a stake in the Martabe project,"
the newspaper quoted Antam president Dedi Aditya Sumanegara as saying.
The report also quoted Oxiana general manager Bruce Loveday as saying that Oxiana wants
to keep a majority ownership in the project and may only offer a 5% % stake.
Loveday said Oxiana may invest about $310 million in construction of the processing facility.
Martabe has the potential to produce 200,000 ounces of gold and 2 million ounces of silver
a year, the report said.
The project's reserves are now estimated at 6 million ounces of gold and 60 million ounces
Govt. to impose quota on tin bar exports
The government will restrict tin exports by way of imposing production quota on tin bar
producers, Antara reported Thursday (17/4/08).
The quota is to prevent excessive exploitation of tin mines amid rising tin prices in the world
market, External Trade Director General Diah Maulida said.
"The government will limit tin exports. The export restriction will be effected not through a
trade minister's regulation, but through a production quota that will restrict producers'
outputs," the director general said.
The Ministry of Mines and Mineral Resources was preparing a regulation to limit tin
"Restricting production will be more effective than limiting exports because export
limitations can be manipulated by smugglers," Maulida said.
The government was at present not restricting tin exports but was only requiring exports to
be carried out by tin bar exporters.
Since the issuance of the regulation, the tin bar price which previously stood at $9,000 per
kilogram had risen to $19,000 per kilogram.
Govt. plans to limit mining areas: legislator
Indonesia plans to limit the area that metal and coal mining firms can explore in the
mineral-rich country in a bid to prevent domination by a few companies, a legislator said on
Monday (14/4/08), Reuters reported.
A draft bill is expected to be passed by August, said Airlangga Hartarto, chairman of a
parliamentary commission in charge of energy and mining issues, said. He added there are
currently no such limits.
Indonesia plans to limit exploration and exploitation areas for metal mining to 100,000
hectares and 25,000 hectares per firm respectively, he said.
It also plans to limit exploration and exploitation areas for coal mining to 50,000 hectares
and 15,000 hectares per firm respectively, he added.
"This is aimed at preventing mining firms from controlling large areas," Hartarto told
reporters. He, however, added that the limits will not affect existing contracts.
Despite a global price boom for most commodities that has prompted a fresh flurry of
investment and mega-mergers, uncertainty over the new mining law has hampered the
development of the country's rich coal, copper, gold, tin and nickel deposits, a key driver of
Indonesia expects to produce 205 million tons of coal in 2008, with domestic demand seen
at 52 million tons and the remainder to be exported, according to energy ministry data.
The government said late last year that it expects investment in geothermal and mining
products to reach $1.55 billion in 2008, compared to $1.35 billion in 2007.
KEPCO, Nuansa in $150M coal terminal deal
Korea Electric Power Corp (KEPCO) said on Thursday (17/4/08) it has signed a cooperation
deal with Nuansa Group to build and operate coal terminals worth $150 million in total,
Under the deal, KEPCO, South Korea's Kenertec Co and PT. Nuansacipta Coal Investment,
an affiliate of the Nuansa Group, will form a task force to build and operate three coal
terminals in Indonesia, KEPCO said.
"With the cooperation deal, we will exercise our priority purchase right over Indonesian
coal," KEPCO said in a statement.
South Korea, which is heavily dependent on foreign energy reserves, imports coal and
natural gas from Indonesia which is the world's fifth-largest coal producer.
Indika Energy to sell 18% stake in IPO
Energy firm PT Indika Energy said on Tuesday (15/4/08) it plans to sell 18% of its share
capital in an initial public offering in June to finance its capital expenditure and develop its
business, Reuters reported.
The company, controlled by PT Indika Inti Energy, did not reveal the amount of money it
planned to raise but a source familiar with the deal said in February it would like to raise
$400 million from the sale of a 20-30% stake.
Indika has appointed Mandiri Sekuritas, Danareksa Sekuritas and Indo Premier Securities as
the lead underwriter and manager of the offering, which will be held between June 4-6.
Indika controls 46% of the country's third-largest coal miner, Kideco, which produces
around 20 million tons of coal a year.
The company made a net profit of Rp265 billion ($28.85 million) last year, up from 177.3
billion a year earlier.
Archipelago sees gold mine start by 2009
The Indonesian unit of British-based gold miner Archipelago Resources said on Monday
(14/4/08) that it expects to start production at its gold mine in North Sulawesi by early
2009, despite delays with permits, Reuters reported.
Archipelago Resources owns 85% of the Indonesian unit, PT Meares Soputan Mining, which
has an estimated 1 million ounces of gold deposit at its gold mine site in Toka Tindung,
Construction of the mine has been delayed due to land disputes and the lack of
Terkelin Purba, an executive director at Meares, said that the company has invested around
$100 million since January 2008 in the construction of the site, and plans to invest a further
$45 million to complete the project.
Once completed, the mine is expected to produce about 162,000 ounces of gold a year.
Bumi expects coal price to rise to $70 per ton
The country's largest coal miner, PT Bumi Resources, said Monday (14/4/08) it expects the
coal price to rise to an average of $70 per ton this year from $44 per ton in 2007 amid
rising coal demand, Thomson Financial reported.
"This should help boost our earnings this year," said Dileep Srivastava, investor relations
official at Bumi.
He said Bumi's proven coal reserves rose to 1.4 billion tons in 2007, up 29% from about
1.09 billion tons at the end of 2005.
Bumi's coal resources, or unproven coal reserves, also increased to 6.73 billion tons at end-
2007, up from 6.12 billion tons in 2005.
Bumi's net profit more than tripled in 2007 to $789 million, aided by stronger revenue and
gains from asset sales.
Indonesia expects more coal exports
Indonesia's coal mining group expects the country to export 170 million tons of the resource
in 2008, the same as in 2007, quelling fears that the world's top exporter of thermal coal
may cap shipments to feed fast-growing domestic demand, Reuters reported Tuesday
Kaz Tanaka, deputy chairman of the Indonesian Coal Mining Association, told an industry
conference in Beijing the country intended to ship 190 million tons of coal abroad in 2009.
Indonesia expects to produce 230 million tons of coal in 2008, rising to 240 million tons in
2009, Tanaka said. The country churned out 213 million tons in 2007.