INDONESIA TO SPEND US$1.4 BLN FOR BIOFUEL DEVELOPMENT

Jakarta (ANTARA News) - The Indonesian government is setting aside a fund of 13 trillion rupiah (1.4 billion USD) and nearly 500,000 hectares of land for the development of the country`s fledgling biofuel industry next year, according to a local newspaper.

Most of the fund, about 10 trillion rupiah, will go to the development of infrastructure -- such as irrigation systems and access roads -- in areas earmarked for biofuel plantations. Meanwhile, about 2 trillion rupiah will be used for buying plant seeds.

The Jakarta Post newspaper reported that Indonesian banks were prepared to channel up to 20 trillion rupiah (2.2 billion dollars) in loans to the biofuel industry.

The Indonesian government has so far secured commitments from eight private-sector firms for the planting of 500,000 hectares with oil palm, sugarcane and cassava, Alhilal Hamdi, head of the government`s biofuel development committee, was quoted by Jakarta Post as saying.

Alhilal had previously said that 6.5 million hectares of idle land would be allocated to investors interested in planting biofuel crops.

The Indonesian government wants to see biofuel to account for 10 percent of the country`s total fuel consumption by 2010, he said.

SEMEN GRESIK BECOME REGIONAL PLAYER

Jakarta (ANTARA News) - The Rajawali Group wants PT Semen Gresik, in which it holds a 24.9 pct stake, to become a regional cement maker in future, Rajawali managing director Daryoto Setyawan said.

Setyawan, who was appointed the new deputy chief commissioner of Semen Gresik today, said there was no firm timetable for the regional expansion plan though he hoped to get it underway by next year.

July, Rajawali acquired its stake in Semen Gresik from Mexican cement maker Cemex SA for 337 mln usd.

To expand regionally, Semen Gresik, could either acquire existing plants or start its own plants in neighbouring country Malaysia or Thailand, Setyawan was quoted by XFN-Asia as saying.

The firm is presently Indonesia's largest cement maker with a market
share of about 45 pct. (*)

FOUR PRIVATE FIRMS WIN CPO AUCTION

Jakarta (ANTARA News) - Four private companies have won a crude palm oil (CPO) sales bid which was held at the joint marketing office of PT Perkebunan Nusantara (PTPN) plantation company on Thursday, a PTPN official said.

The four firms, namely PT Smart, Darmex Oil & Fats (DOF), Permata Hijau Sawit (PHS) and Musim Mas (MM) offered the highest prices namely Rp4,139 per kg to PTPN II and PTPN III for 500 tons each and for 100 tons to PTPN IV, PTPN`s CPO marketing division head Dahlan Surbakti said here Thursday.

The CPO auction which was held during the fasting month of Ramadhan was sluggish, he said.

However, the plantation companies registered at the joint marketing office pushed through the auction.

PTPNs II, III and IV were the most active firms that took part in Thursday?s auction.

Dahlan said other PTPNs which did not participate in the bid were those that had claimed they did not have CPO reserves.

Therefore, he said, the government`s program to implement palm oil replantation project should receive full support from the concerned ministries and private agencies so that no PTPN would lack a CPO stock.(*)

FOREIGN OIL FIRM TO BE ALLOWED TO BUY, SELL BIOFUEL

A regulatory package will soon be put in place to allow foreign oil firm such as Petronas of Malaysia and Shell of the Netherlands to distribute biofuel so as to boost competition on the domestic market.

The foreign firm would be allowed to buy biofuel from growers/producers sand sell it back to public as long as it was being sold for transportation purposes. So, the consumer will get benefit from fair prices due to the competition, while on the other hand investor and growers will continue to be interested in biofuel production. The government also appointed state oil and gas firm PT PERTAMINA and state power firm PT PLN to serve as standby buyers of biofuel.

The government targeted the country would be able to achieve its biofuel production on 13 million tons per year by 2009. According to the Investment Coordinating Board (BKPM), 15 companies have applied for licenses to produce a total of 1 million ton of bio-diesel per year. The companies including;

• PT Wahana Abdi Tirta,
• PT Anugrah Inti Gemanusa,
• PT Sari Dumai Sejati,
• PT Indo Bio Fuels,
• PT Artha Trans Jaya
• PT Asanagro Agung Jaya
• PT Wilmar Bio Energi Indonesia (JV between PT Bakrie Sumatera Plantation and PT Rekayasa Industri)
• PT Musimas
• PT Karya Prajona Nelayan
• PT Biodiesel Indonesia (JV between PT Rekayasa and PT Pertamina)
• PT Astra Agro Lestari
• PT Eterindo Jawa Timur
• PT Energi Alternatif Indonesia
  

The government, itself will build 8 bio-diesels factories in the country in a move to provide an alternative to expensive fossil-based fuels. Each factory would be built with production capacity of 3,000 to 6,000 tons per year. The factories locations are selected cause of close with their raw material, palm oil plantations.

The estimated cost of these projects is about US$65 million, will be financed from the 2006 national budget. The operation of the factory will be offered to local administration. The hand over of operation to local administration will be give a year after the factory start operation.

TENDER OF NEW POWER PLANTS HAS BEGUN

The government will open tendering process in October for international power companies in the construction of 30 massive power plant projects around the archipelago.

Djuanda Nugraha Ibrahim, acting president director for state-owned power company, PT Perusahaan Listrik Negara (PLN), said that the bidding would involve coal-fired power plant projects in 30 locations outside of Java Island.

The projects would include between 2,900 MW and 3,100 MW of power for areas in Sumatera, Kalimantan, Maluku, West Nusa Tenggara, East Nusa Tenggara, and Papua, and between 6,900 MW and 7,200 MW of power for areas in Java – the nation’s center of business.

The government has approved the fast-track construction of a series of ambitious coal-fired power projects worth US$8 billion over the next four years, with some of the projects to be excluded from a lengthy tendering process.

It expects that by 2010, the use of expensive fuel-fired power plants will be reduced to just 5% of total capacity from the current 30%, which would cut costs by as much as 80%.

For Java, the government is already in the process of accepting bidding offers, with some 59 interested investors from Japan, China, South Korea, Europe, India, and Malaysia expressing interest. The local investor that have expressed interest in the project are mostly state-owned construction companies.

The government would announce the tender winners for 10 locations across Java in early October 2006.

The foreign investors are: Marubeni and Hitachi from Japan, Essar from India, China Huadian (CHD), China National Machinery Import Export Corporation (CMC), and China National Machinery and Equipment Import Export Cooperation (CMEC) from China.

INDONESIAN HEAVY EQUIPMENT INDUSTRY PROFILE

In the last five years, heavy equipment industry in Indonesia is increasing very fast. In among South-east Asian country, Indonesia is the most complete and advance for heavy equipment industry.

Business competition in heavy equipment is very tight, because the government already allowed company to import used-heavy equipment from Japan, South Korean, and China. Also there is free import duty for imported part or component of heavy equipment and plus free value added tax from import for part or component of heavy equipment for special project of mining.

Most of heavy equipment supply in Indonesia is import and local assembly. In 2004 import of heavy equipment was US$456.5 million, increase 143.5% from US$187.5 million in 2003.

Indonesia also does export for heavy equipment, even only in small amount. In 2004 export value of heavy equipment was US$$44 million, increase 110.5% from US$20.9 million in 2003.

In the last 3 years local production of heavy equipment tend to increase, in 2003 produce 1,684 units, than in 2004 production increase 68% to 2,830 units, and also in 2005 increase 18.73% to 3,360 units.

The main end user of heavy equipment in 2005 is mining industry (3,213 units=63%), and following with forestry (918 units=18%), construction (510 units=10%), and plantation/agriculture (459 units=9%).

In 2005, the market player of heavy equipment is dominated by two companies, PT United Tractor (37%) and PT Trakindo Utama (32%). And followed by PT Hexindo (13%) and PT Intraco Penta (5%). PT United Tractor affiliated with Komatsu, PT Trakindo Utama with Caterpillar, PT Hexindo with Hitachi, and PT Intraco Penta with Volvo.

List of Company

PT ALTRAK 1978
Address:
Jl. RC. Veteran No. 4, Bintaro
Jakarta Selatan 12330 – INDONESIA
Tel: (62 21) 7361978
Fax: (62 21) 7361977, 7363302
Website: http://www.altrak1978.co.id/
Line of business: Distributor, Trader, Importer
Affiliate Product: New Holland, Mitsubishi, Nichiyu, Kawasaki

PT DAYA KOBELCO
Line of business: Distributor, Trader, Importer
Affiliate Product: Kobelco

PT GLOBAL TRACSINDO NUSANTARA
Address:
Plaza Sentral Building, 3rd Floor
Jl. Jend. Sudirman Kav. 47-48,
Jakarta Selatan 12930 – INDONESIA
Tel: (62 21) 5253822, 5701453
Fax: (62 21) 5201393
Line of Business: Distributor, Importer
Affiliate Product: Global

PT HEXINDO ADIPERKASA
Address:
Jakarta Industrial Estate Pulogadung
Jl. Pulo Kambing II Kav. I - II No. 33, Pulogadung,
Jakarta Timur 13930 – INDONESIA
Tel: (62 21) 4611688, 4615108
Fax: (62 21) 4611686, 4608956
Website: http://www.hexindo-tbk.co.id/
Line of Business: Distributor, Service, Trader, Importer
Affiliated Product: Hitachi, John Deer

PT INTERACO PENTA TBK.
Address:
Jl. P. Jayakarta No. 115 Block C 1-3,
Jakarta Pusat 10730 – INDONESIA
Tel: (62 21) 6283333, 6393538
Fax: (62 21) 6283390, 6283391
Website: http://www.intracopenta.co.id/
Line of Business: Distributor, Importer, Service, Trader
Affiliated Product: Volvo, Bobcat, Renault

PT MEKASINDO DHARMA INT.
Address:
Jl. Daan Mogot Km. 19, Desa Jurumudi - Batu Ceper,
Tangerang 15124 – INDONESIA
Tel: (62 21) 5412380, 5412382, 5413590
Fax: (62 21) 6194349, 5417434
Line of Business: Distributor, Trade
Affiliated Product: Dressta

PT PROBESCO DISATAMA
Address:
Jl. P. Jayakarta Kav. 129 Block A No. 2,
Jakarta Pusat 10730 - INDONESIA
Tel: (62 21) 6288862
Fax: (62 21) 6493288, 6285579
Website: http://www.probesco.com/
Line of Business: Distributor
Affiliated Product: Case, Vibromax, Gradal

PT SWADAYA TRAKTOR ADITAMA
Address:
Wisma SMR Building, 5th Floor Suite 504-B
Jl. Yos Sudarso Kav. 89,
Jakarta Utara 14350 – INDONESIA
Tel: (62 21) 6507819
Fax: (62 21) 6517416
Line of Business: Service, Trader
Affiliated Product: Hyundai

PT TATINDO HEXAPRIMA
Address:
Jl. Raya Cakung Cilincing No. 200 Km. 1.5,
Jakarta Timur 13910 – INDONESIA
Tel: (62 21) 4608199
Fax: (62 21) 4608299
Line of Business: Distributor
Affiliated Product: Sumitomo

PT TRAKINDO UTAMA
Address:
Jl. Raya Cilandak KKO, Cilandak,
Jakarta Selatan 12560 – INDONESIA
Tel: (62 21) 7822373
Fax: (62 21) 7822357, 7822379
Website: http://www.trakindo.co.id/
Line of Business: Agent, Distributor
Affiliated Product: Caterpillar

PT UNITED TRAKTOR
Address:
Jl. Raya Bekasi Km. 22, Cakung,
Jakarta Timur 13910 – INDONESIA
Tel: (62 21) 4605959, 4605979
Fax: (62 21) 4600677, 4605933
Website: http://www.unitedtractors.com/
Line of Business: Importer, Supplier, Trader
Affiliated Product: Komatsu, Bomag, Nissan, Kenworth, Patria

INDONESIA IS STILL DEPENDENT ON SOYBEAN IMPORT

In the country consumption of soybean around 1.2 million tons per year from 2 millions tons total, is still dependent from import. Currently local production only produces 0.8 million tons per year, that mean still far from fulfill local consumption.

Indonesia’s soybean import track record, in 2000 soybean imports reached 1.28 million tons, and in 2001 dropped to 1.14 million tons. In 2002, the imports increased to 1.37 million tons, in 2003 dropped to 1.19 million tons. In 2004 imports reached 1.12 million tons and in 2005 until data of October, imports already reached 0.83 million tons.

The United States is the biggest soybean suppliers of Indonesia, with 870 thousands tons (78.03%), and followed by Argentina (234 thousand tons=21.04%), Malaysia (5.7 thousand tons=0.51%), and Myanmar (3.1 thousand tons=0.28%).

In this case, The Ministry of Agriculture projected to turn Indonesia in 2010 into a country self-sufficient in soybean. To increase soybean production, there are some matters have to be done, i.e. improved price of soybean, speeding up technological application to superior seedling, use of biofertilizers, integrated pest control, and improvement in pre- and post harvests.

Regarding soybean plantation expansion, the Ministry plans to carry out three programs namely growth center, partnership and business development. The three programs will basically provide security to production means, enlightenment and marketing, to draw the interest of farmers in soybean rising. Success of this program, projected in 2007, the soybean estates will reach 2 million hectares.

The growth center program will be implemented in 23 provinces and 49 regencies with the support of deconcentration fund in the form of SL Soybean Agribusiness guidance and financial support of the provincial and regency budgets, while partnership program in 16 provinces will involve private business partners or state-owned enterprises. Business development will be implemented in 30 provinces in the country.