INDONESIA AS NEW EMERGING MARKET

ESSAR TO INVEST US$1 BILLION IN INTEGRATED STEEL INDUSTRY IN C. KALIMANTAN

2007-05-29T12:26:00.000+07:00

Jakarta (ANTARA News) - Indian steel maker Essar International Steel Ltd has begun taking initial steps toward realization of its plan to build an integrated steel industry in Central Kalimantan with an investment of about US$ 1 billion.

A few details of the Indian company`s plan were disclosed in an expose of Central Kalimantan`s iron ore and coal potentials relevant to the project`s feedstock needs which took place at the Industry Minisry here Friday in the presence of Essar executives, Industry Ministry and Central Kalimantan provincial government officials.

"Essar is seriously committed to its plan to build an upstream plant in Central Kalimantan producing pellets (hot briquette iron) that will be integrated with its plant in Cilegon (Banten province in Java) as the market of its downstream products is mainly in Java," Anshari Bukhari, director general of metal, textile and multifarious industrial machineries at the Industry Ministry, said.

At present, Anshari said, Eassar was conducting studies on Central Kalimantan`s iron ore deposits as the planned pellet plant with a design production capacity of two million tons of pellets a year would need about seven million tons of iron ore as feedstock.

"They (Essar) have asked for an iron-ore mining concession to be ensured of supply of iron ore to produce two million tons of pellets a year. They want a concession valid for 30 years because they would need a total of about 200 million tons of iron ore. They have also requested the needed mining permit and certainty about the availability of the needed infrastructure," he said.

The Indian company also wanted certainty about a ban on export of iron ore to ensure uninterrupted iron ore supply while they felt sufficiently assured about the availability of coal as an energy source.

Anshari said Essar`s planned integrated steel industry would lessen Indonensia`s dependence on imported steel. The country`s need for steel now stood at 6.5 million tons and it was still importing about two million tons a year. The domestic need for steel was expected to increase to 10 million tons by 2010.

Meanwhile, PT Essar Indonesia President Director KB Trivedi said the funds needed to set up the integrated steel industry would all be provided by the company.

He said India was now actively setting up steel plants in a number of countries to meet its own need for the commodity as well as for export.

"So the plan to build a steel industry in Indonesia fully accords with our government`s policy so that we will continue our efforts to become one of the world`s biggest steel producers," he said.

He said during the first six months of its operations in Indonesia, Essar would make a feasibility study on the availability of iron ore in Central Kalimantan, namely in the Murung Raya, Barito Utara and Pulang Pisau districts. "If the deposits in these regions prove to be insufficient, we will explore other places," he said.

Djoko Subagyo, PT Essar Indonesia`s technical adviser, said the company already obtained a permit to set up the integrated steel industry in Central Klimantan and Cilegon from the Indonesian governemnt`s Capital Investment Coordination Board (BKPM) in November 2008.

He said Essar would need at least 240 million - 300 million tons of iron ore and sufficient quantities of coal to produce steel over a period of 30 years."These matters are what we are now still studying," he said.(*)

Copyright © 2007 ANTARA

PRESIDENT YUDHOYONO MEETS WITH MALAYSIAN BUSINESS MAKERS

2007-05-29T12:16:00.000+07:00

Kuala Lumpur (ANTARA News) - President Susilo Bambang Yudhoyono held a meeting with some 50 Malaysian businessmen at JW Marriott hotel here on Monday after addressing the 3rd World Islamic Economic Forum (WIEF) at the Putra World Trade Center building.

The Malaysian business makers who met with President Yudhoyono were grouped in the Asian Strategic and Leadership Institute (ASLI), Kuala Lumpur Business Club (KLBC), and Malaysian investors in Indonesia.

The meeting focused on the Indonesian investment climate and the Malaysian businessmen`s commitment to investing in Indonesia.

After that, President Yudhoyono would meet with members of the Indonesia-Malaysia Workers Union.

A number of problems related to Indonesian migrant workers in Malaysia would be discussed in the meeting.

On the occasion, President Yudhoyono would be accompanied by Coordinating Minister for the Economy Boediono, Trade Minister Mari Pangestu, Energy and Mineral Resources Minister Purnomo Yusgiantoro, Manpower and Transmigration Minister Erman Soeparno, Justice and Human Rights Minister Andi Mattalata, Cabinet Secretary Sudi Silalahi, presidential spokesmen Andi Malarangeng and Dino Patti Djalal.

Before the 3rd World Islamic Economic Forum, President Yudhoyono and Malaysian Prime Minister Abdullah Ahmad Badawi witnessed the signing of two documents, namely Master Alliance Agreement (MAA) between PT Tripatra Engineers and Constructors and PT TransPeninsula Petroleum Sdn Bhd and a memorandum of understanding (MoU) between Bakrie and Brothers and Trans Peninsula Petroleum Adn Bhd.

After that, President Yudhoyono and his entourage will visit WIEF exhibition and Indonesian pavilion at exhibition hall in Putra World Trade Center building.

On Monday evening, President Yudhoyono is scheduled to meet with Malaysian Prime Minister Abdullah Ahmad Badawi.(*)

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LINK EXCHANGE 3

2007-05-09T09:23:00.000+07:00

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INDONESIA TO GIVE IMPORT TAX EXEMPTION ON CARS ABOVE 3,000 CC

2007-04-25T11:42:00.000+07:00

Indonesia to give import tax exemption on cars above 3,000 CC
April 23, 2007

Jakarta (ANTARA News) - With a view to protecting the automotive industry in Indonesia, the government will only grant an import tax exemption on cars above 3,000 cc.

"Only cars above 3,000 cc will be exempted," the director general for transportation equipment industries, Budi Darmadi, told ANTARA News here on Sunday.

Some automotive producers in the country were worried that the government might open its market to cars of all categories in the framework of the Japan-Indonesia Economic Partnership Agreement (JIEPA) currently still in the making.

Budi said the government would not liberalize its market for cars of all categories because the automotive industry at home had already developed not only to meet domestic needs, but also for exports.

Under the current circumstances, he said the tax exemption would only apply to cars above 3,000 cc while cars below that would continue to enjoy protection.

"We have not produced cars with engines above 3,000 cc and likely will not do it in the near future or will not completely include it in our development plan," he said.

He said the local market share of cars above 3,000 cc was still relatively small as the cars were still considered a luxury and therefore their tax reached more than 75 percent.

He said the government would not offer to liberalize the market for cars below 3,000 cc to Japan because the domestic industry was just developing the type of cars such as Toyota Innova and Fortuner that have engines above 2,000 cc.

"So far the focus of development is on multi-purpose vehicles, sport utility vehicles and small sedans to meet both the domestic and export market," he said.

Budi admitted that the offer to liberalize the market of cars above 3,000 cc was not yet settled because Japan still sought for the liberalization of cars below 3,000 cc.

"Japan wishes for the liberalization of the market for all categories. We will not open the market of cars that we have already made and will make in the future," he said.

In the 3,000 cc segment Japanese cars will compete with cars from Europe and the US such as Mercedes, BMW and Ford. (*)

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GOVT SCRAPS DUTIES ON IMPORTED RAW MATERIALS OF AUTOMOTIVE SPARE PARTS

2007-04-25T11:32:00.000+07:00

Govt scraps duties on imported raw materials of automotive spare parts
April 23, 2007

Jakarta (ANTARA News) - The Finance Ministry has decided to scrap final duties on imported raw materials of automotive spare parts to help encourage the domestic industry.

The provisions were contained in Finance MInister`s Regulation No.34/PMK.011/2007 dated April 3 which will come into force 30 days after its date of issuance, the ministry`s spokesman, Samsuar Said, said on Monday.

He said the privilege would be valid for one year after the regulation became effective.

Any application for the privilege should be addressed to the Directorate General of Customs and Excises. The application must be such data as taxpayer`s code number, business permit issued by the relevant ministry/agency, list of materials, the specifications and prices of goods and a statement of verification issued by a government-sanctioned surveyor, he said.(*)

Copyright © 2007 ANTARA

GOVT TIGHTENS IMPORT OF COPYING MACHINES AND COLOR PRINTERS

2007-04-25T11:29:00.000+07:00

Govt tightens import of copying machines and color printers
April 24, 2007

Jakarta (ANTARA News) - The trade ministry has tightened the import of color multi-functional machines such as those for printing, copying and facsimile transmission to prevent falsification of bills and other securities.

Under the trade minister`s decree No 15 2007, the three kinds of machines could only be imported by licensed importers.

To get such license of importers must make an application to the directorate general of foreign trade. The license is valid for two years but can be extended.

Under the decree signed on March 30 2007, the licensed importers must get a permit before importing the products specifying the number, type, specification, ports of destination and origin.

The permit is valid for six months and it may be obtained by submitting an application along with an import plan signed by the company`s executive in charge and a recommendation from the directorate general of transportation and telecommunications and information equipment industry.

The companies are required to report their imports once in every three months or whenever required. The products will be verified at the country of loading by a surveyor appointed by the minister.(*)

Copyright © 2007 ANTARA

ITALY BACKS RI'S DEFENSE INDUSTRY

2007-04-25T11:25:00.000+07:00

Italy backs RI`s defense industry
April 23, 2007

Jakarta (ANTARA News) - The Italian government has affirmed its strong commitment to enhancing bilateral relations with the Indonesian government, particularly in the defense field, Italian Defense Minister Arturo Parisi said.

Parisi made the remarks during a meeting with his Indonesian counterpart, Juwono Sudarsono, at the Centro Alti Studi Della Difusa (CASD) in Rome over the weekend, the Indonesian Embassy in Rome said in an e-mailed statement issued on Monday.

The meeting focused on enhancing bilateral ties between the two countries and encouraging concrete cooperation in the defense field, it said.

During the meeting Parisi on behalf of the Italian government also expressed gratitude to the Indonesian government for its participation in the United Nations Interim Force in Lebanon (UNIFIL) and its contribution to the creation of peace in Lebanon in particular and the world in general, it said.

Meanwhile, Juwono expressed the Indonesian government`s wish to build strategic partnership with Italy in the defense field.

The meeting was part of Juwono`s three-day Italian visit which ended on April 21.

During his stay, Juwono also met with officials of the Italian defense industry and visited the Fincantieri shipyard in La Spezia.(*)

Copyright © 2007 ANTARA

INDONESIA TO IMPORT WOOD TO REVIVE COLLAPSED INDUSTRIES

2007-04-25T11:17:00.000+07:00

Indonesia to import wood to revive collapsed industries
April 24, 2007

Banjarmasin, S Kalimantan (ANTARA News) - Indonesia plans to import wood to save wood-based industries in various regions in the country that had collapsed because of a shortage of raw materials.

Forestry minister`s expert staff Made Subadya said at a forestry development coordination meeting here on Tuesday, "we are ready to facilitate wood imports to help the industries."

He said several countries that had a stock and had become exporters were among others China, Malaysia and Japan.

The wood from other countries could be used to meet the need for raw material of many wood industries in the country that had collapsed following a shortage of wood stock in forests.

The forestry s ministry had also carried out a smallholders` forest development program covering five million hectares in 2006.

Unfortunately, he said, only 3.5 million hectares had so far been successfully developed, so 1.5 million hectares still had yet to be completed.

The condition of wood-based industries in South Kalimantan was not yet improving and disputes over pay were continuing because of it.(*)

Copyright © 2007 ANTARA

INDONESIA NEED US$65 BILLION TO BUILD INFRASTUCTURE

2007-01-25T14:05:00.000+07:00

The Government of Indonesia (GOI) targets to chalk up an economic growth of 6% per annum, the target could be reaching with the support of adequate infrastructure to facilitate economic development.

Around US$65 billion will be needed to finance several larger infrastructure projects in the country in 2005-2009. Around 38% or US$25 billion of the fund are expected to come from the state budget, US$14 billion from local banks, insurance and pension fund companies, US$10 billion in multilateral and bilateral loans, US$16 billion in investment by the private sector including foreign investors.

The GOI has invited investor to Infrastructure Summits in 2005 and 2006 in Jakarta and offered large infrastructure projects.
The government offered 91 projects valued at US$22.5 billion in 2005 but only five project shave been in the process of construction, 15 projects are to be implemented and 28 in the stage of preparation for tender.

Various problems still come in the way of realizing the projects. The progress made in stabilizing the macro economic indicators including lower inflation rate and credit interest rates gave hope of bringing the projects into reality.

Indonesian Competitiveness Declines

The competitiveness of the country in attracting foreign investors has declined as a result of the infrastructure being not adequately available, whereas the country badly needs foreign investment to boost the economic growth.

Until early 1997, the country's infrastructure grew steadily, investment in infrastructure contributed 6% to the country GDP every year. In the past several years, quantitavely, the country's infrastructure grew sluggishly contributed only 2% to the GDP and qualitatively the sector has contracted.

Time to Build Infrastructure

The end of 2006 was marked with improvement of the macro economic indicators such as fairly strong 5.6% economic growth, lower inflation rate to 8% and Bank Indonesia (Central Bank) benchmark interest rate to 9.75% and the increase in the Jakarta
Composite Share Price Index to a record high of 1,800 points and export value to an all time record of around US$100 billion.
No less important is the appreciation of the rupiah to reach the level of 9,100 per US dollar with foreign exchange reserve exceeding US$40 billion. All the indicators are encouraging contributing to stronger economic fundamentals.

However, the real sector has remained in the doldrums. In the first three quarters, the manufacturing sector grew only by 4.11% down from a growth rate of 6% in 2006or falling far short of target set by the industry minister. The slow revival of the real sector diminished the significance of the real sector is feared to undermine the economic growth in mid and long terms.

The improvement of the macro economic condition provides a good momentum for the government to boost development of infrastructure to attract foreign direct investment to the country.

In addition, the government need remove various other bottlenecks hampering the private sector for taking part in infrastructure development. The government should launch major deregulation measures such as in infrastructure management, land clearing, tariff systems, and tax incentives. Participation of the private sector is absolutely needed with the poor financial condition of the government.

PRESIDENT TO LAUNCH POVERTY-HANDLING PROGRAM IN FEBRUARY

2007-01-18T16:06:00.000+07:00

Jakarta (ANTARA News) - President Susilo Bambang Yudhoyono was reported to officially launch the PNPM, a new program designed to accelerate the handling of poverty in urban and rural areas by empowering the people`s economy as of February this year.

"If possible at the end of this year or in February, the people`s empowerment national program (PNPM) will have been launched nationally," said Dr Sojana Royat, Deputy Minister for Poverty Handling at the People`s Welfare Coordinating Ministry, said after attending a meeting on PNPM here on Wednesday.

The launching will be highlighted with a dialogue between the head of state and members of the community, so that the people as a whole will directly know how to participate in the program.

The official launching was designed to provide the people with a information on concrete steps the government has taken to minimize poverty and to create job opportunities, he said.

PNPM is like a instrument which accelerates the handling of poverty and creates people-based job opportunities in 2007, 2008 and in many years to come.

In 2007, PNPM will only handle two programs, namely sub-district development program (PPK) and urban poverty handling program (P2KP).

In 2008, the score of work will have to be extended to become five programs, namely (1) PPK, (2) (P2KP), (3) unfortunate and special regional development program (P2DTK), (4) infrastructure and socio-economic zone development (PISEW) and (5) joint business groups (KUBE).

Under the PNPM program, the number of poor people in 2007 reached 31.92 million or about 9.76 million poor families consisting of (1) rural PNPM target of about 21.92 million poor people (5.46 million poor families) and (2) urban PNPM with a target of about 10 million people people (2.5 million poor families).

In the meantime, new job opportunities that could be created is predicted to range from 12.5 up to 14.4 million annually with an assumption that there are 8 to 20 villages participating in each sub-district for PPK and P2KP programs and each village creates at least 250 new job opportunitoes each year.

In addition, the number of sub-districts included in PNPM program in 2007 reached over 2,891 sub-districts consisting of 2,057 rural PNPM-related sub-districts and 834 urban PNPM-related sub-districts.

Each sub-district was reported to get direct public assistance of Rp500 million to Rp1.5 billion annually tailored with the number of poor people in each sub-district.

PNPM fund for 2007 is estimated to reach Rp4.42 trillion devided into rural PNPM amounting to Rp2.48 trillion and urban-PNPM standing at Rp1.95 trillion, Sojana stressed.

Of the total, Rp3.62 trillion will be taken from the state budget of 2007 and around Rp813 billion constitutes a constribution from the regional governments through cost-sharing mechanism.

PNPM will however give a certain portion of the budget in revolving funds and direct public assistance (BLM) to be managed by wormen, he said. (*)

Copyright © 2006 ANTARA
January 18, 2007

GOVT TO DEVELOP FISHERY INDUSTRIAL CLUSTER

2007-01-18T16:00:00.000+07:00

Jakarta (ANTARA News) - The ministry of fishery and marine resources is set to develop fishery industrial clusters in some districts this year to promote their leading fishery products.

The ministry`s spokesman, Saut P Hutagalung, said here on Wednesday that under the program a district would only focus on developing some of its leading fishery products.

"Then the district will only produce one commodity so that it will be competitive," he said.

He said that actually this program had alredy been developed by other countries such as Japan and Vietnam under their one village one commodity program.

He said the government had already set 10 main fishery commodities to be developed under the cluster system, such as tuna, shrimp, seaweed, crabs and aquarium fish.

He said tuna clusters would be developed in Bitung, North Sulawesi, Benoa in Bali, Makassar in South Sulawesi, Padang and Bungus in West Sumatra, Sorong in Papua, Kendari in Southeast Sulawesi, Prigi in East Java, Cilacap in Central Java and Jakarta.

He said the development of the program would also involve the private sector as well as cooperatives.(*)

Copyright © 2006 ANTARA
January 18, 2007

BOTTLED DRINKING WATER INDUSTRY

2006-12-19T15:05:00.000+07:00

Bottled drinking water (AMDK) becoming attractive because requirement of drinking water public would be increasing along with growth of number of populations. Urban community now have been at level cannot get out of AMDK. This is influence the number and product from the industry growing more and more.

Now total consumption of drinking water reaches 26 liter billions per year. Instead of, water availability that is it is good to drinks with quality and well guaranted of its health and more difficult to be obtained.

From the angle of sale, this industry experiences growth from year to year. Data from Association of the Indonesian bottled drinking water manufacturers (ASPADIN) shows surprising number. If sale of AMDK by 2001 reaching 5.4 liter billions, one year then rising 31.5% becomes 7.1 liter billions. Then, by 2003 increasing 14.1% to reach 8.1 liter billions.

ASPADIN targets sale of AMDK this year grows 10% becomes 12 liter billions. Improvement of consumption is estimated happened at semester II 2006 with assumption of dry season takes its rise at spread at that time. According To Willy Sidharta, public chief ASPADIN, like quote by Bisnis Indonesia, compared to growth of 2005 reaching 11%, this year sales target tends to declines because condition of weather that is below par.

Even AMDK is wet business, does not mean no barrier. The weather that is below par and many drinking water depot store force AMDK industry to correct its strategy.

AMDK businesses play by tens of company, big, middle, and also small. According To ASPADIN, now there are 480 AMDK companies, but productive only 350 with 165 among others is merged into ASPADIN. Now there are approximately 600 AMDK brands which active in market.

This AMDK company excise starts 1973 with capacity produce of 6 million liters per year. Now they have capacity produce of approximately 12.6 liter billions per year (in 2005) with volume of trading 10.1 liter billions.

AMDK business also involves foreign company. Consumption level of AMDK in Indonesia 36 liters per capita per year. This number is still low compared to Thailand (70), USA (80), French (140), and Italy (165).

Local AMDK product has export to various country, like Singapore, Portugal, East Timor, Japan, Malaysia, and Hong Kong. Based on data, product export value AMDK by 1999 reaching US$3.9 million and downwards thus US$3.4 million at 2005.

On the other side, Indonesia also imports AMDK products from French, Malaysia, and Singapore. In 1999 import value this products reach US$0.39 million, in 2001 reducing to US$0.31 million. And in 2005 the imports increased again becomes US$0.99 million.

Among others, there are some AMDK industry player which still have not applied good productivity ways and correctness, many of them use of secondhand bottle, or other company brand gallon, and existence of usage forgery of sign of National Industry Standard (SNI).

Has not been known how much/many market share total AMDK in Indonesia. But, sale total of AMDK in Indonesia now is estimated more than IDR 3 trillion per year. From the number, simply brand Aqua and VIT lead the market share 45%, then equal to 30% by other brands, that is AdeS, Total, Club, 2-Tang, and Oasis. Meanwhile, other 25% fought over by hundreds of brand which spread over in all Indonesia.

Growing of AMDK industry, besides because of its practice to use , also because the taste is fitting in with tongue most Indonesia public. More than anything else, with consuming AMDK, likely there are guarantee for their hygienic and right processed. While for investor, the AMDK industry is one of primadona investment choice because, firstly, its processing process not too complicated and easy goes technology. Second, its investment not too big, more than anything else more and merely many local companies capable to make processing machines of AMDK with international quality. Third, its market prospect is hardly promises.

Hence, it is not strange if in story at retail AMDK product leader about 67% of beverage market share. Rest share for ready powder for drinking product (11.75%) and carbonate beverage (10.42%).

INDONESIA IMPOSES ZERO TAX ON IMPORTED GOODS FOR UPSTREAM OIL/GAS PROJECTS

2006-11-20T14:52:00.000+07:00

Jakarta (ANTARA News) - The government has decided to impose zero tax on imported goods for upstream oil and gas projects in a bid to attract fresh investment into the sector, the Ministry of Finance said in a statement.

The move is retrospective from July 16 2006 and will be valid for one year until July 15, 2007.

The statement said the tax free facility is being given to companies that operate in cooperation with state-run oil and gas firm PT Pertamina and with upstream oil and gas regulator, BP Migas.

Lack of new investment into the oil industry has been cited as one of the reasons for a decline in the country's oil output. (*)

MINISTER CALLS FOR HIGH IMPORT DUTIES ON AGRICULTURAL TOOLS

2006-11-20T14:48:00.000+07:00

Jakarta (ANTARA News) - Industry Minister Fahmi Idris called on the Ministry of Finance to impose high import duties on agricultural machineries and tools which could have been produced and met domestic demand at home.

"We should have stopped the import of agricultural machineries and tools which could have been produced and have met domestic demand," the minister said after a meeting with associations in the agro-chemical sector here on Monday.

Fahmi said that so far the existing policies had not yet supported the growth of agricultural tools and machineries which production at home was very simple such as mattocks and sickles. Chinese tools of these types had flooded Indonesia, he said.

"In the past our orientation was import but the import duty scheme of this goods did not support industries (at home)," the minister added.

As a result, Indonesia`s agricultural tool industry did not develop though Indonesia was an agriculture-based country.

The minister said that simple agricultural tools such as mattocks and sickles should have been developed by small and middle scale industries at home, and should have been evenly distributed to the country`s agricultural production centers.

Fahmi was also of the view that the import duties --which ranged at 5-7.5 percent and were effective until 2009-- on agricultural tools were not conducive for the development of industries in the country.

He said that the finance ministry should encourage efforts to increase the import duties of finished agricultural tools but reduce the import tax for their raw materials.

"At present, the import duties on finished agricultural tools ranged at 5-7.5 percent but the one for their raw materials were about 15 percent," the minister said adding that the import duty for raw materials of this good should be zero percent.

He also expressed his hope that the imposition of high import duties on agricultural tools would not be limited only until 2009.(*)

BUSH EXPECTED TO HELP BOOST INDONESIAN BIOFUEL DEVELOPMENT PROGRAM

2006-11-20T14:39:00.000+07:00

By Andi Abdussalam

Jakarta (ANTARA News) - Indonesia`s preparations to develop biofuel will seemingly get a further boost when President Susilo Bambang Yudhoyono and US President Geoerge W Bush meet in Bogor, West Java, on Monday.

It was reported that among the six topics the two leaders will focus on during their talk at the Bogor palace will be cooperation in the development of biofuel.

Once rich in oil reserves but now facing depletion of the energy source, Indonesia has launched an intensive biofuel production program aimed at cutting its fossil oil consumption by 10 percent in 2010.

Cooperation with the United States is expected to solve the problems Indonesia is facing in carrying out its biofuel development program such as lack of funding and technology.

So far the Indonesian government has mentioned four plant species that can be developed to produce biofuel, namely oil palm and jatropha curcas for biodiesel and sugarcane and cassava for bioethanol or gasoline.

The country is now producing some 14 million tons of palm oil per annum. In terms of production volume, this fact uggests that among the four plant types, only oil palm is ready to be developed to produce biofuel.

Jatropha, cassava and sugarcane still need to be planted on vast tracts of land to reach large enough production volumes. But most of the palm oil being produced is still intended for export. Of the 14 million tons, 11 million are exported and three million are for consumption as cooking oil.

Aware of the need to develop vegetable oils other than palm oil for the development of biofuel, Indonesia`s Agency for the Assessment and Application of Technology (BPPT) in cooperation with the University of Groningen in the Netherlands will hold an international seminar to discuss the economic prospects of jatropha curcas plants.

The two-day seminar will be held beginning on Monday when President Yudhoyono and his US counterpart also discuss the same topic at the Bogor palace.

"The international seminar will discuss government policies on jatropha curcas fuel oil, jatropha curcas plantations, jatropha curcas oil making processes, its economic prospects and jatropha curcas oil conversion into non-energy materials needed by pharmacies and industries," Dr Marzan Aziz Iskandar of the BPPT said.

On the same day, the Indonesian Chamber of Commerce and Industry will also hold a national workshop on alternative energy business.

Marzan said the Indonesian government wants 10 percent of the country`s need for fossil fuels to be replaced by vegetable-based fuels by the year 2010.

But it was feared that the government would not be able to meet the target because it takes several years before jatropha curcas plants can be exploited optimally.

President Susilo Bambang Yudhoyono showed serious attention to development of bio-energy when he convened a limited cabinet meeting in Magelang, Central Java, last July to discuss national energy policies and bio-energy action plans.

"We will continue with the preparations and planning in 2006, and implement (the program) in 2007," the President said.

In order to carry out the program, the Indonesian government has set up a national team in charge of formulating policies for the development of bio-diesel or biofuel program.

Chaired by former manpower minister Al Hilal Hamdi, the national team would formulate policies, including on matters relating to cultivation of land, infrastructure, processing, marketing and funding.

With the program, Indonesia expects to be able eventually to reduce the use of fossil fuel oils by 10 percent in 2010, namely using bio-fuel to replace premium, kerosene, diesel oil and fuel oils used to generate electricity.

Hilal said some 6.5 million hectares would be made available for the development of bio-fuel. Thus it would provide employment for about three million workers and boost rural economies.

Of the 6.5 million hectares, three million hectares would be developed for oil palm, 1.5 million hectares for jatropha curcas, 500,000 hectares for sugarcane and 1.5 million hectares for cassava.

The investment per hectare was estimated at Rp30 million for oil palm, Rp15 million for sugarcane, Rp3 million for jatropha curcas and Rp3.5 million for cassava.

Hilal said the program needed an estimated investment of Rp100 trillion (US$10.8 billion) in the sector within the next five years.

The government also unveiled a crash program to build 11 biofuel plants, with production targets of 187 million liters next year and 1.3 billion liters by 2010, or equivalent to 3 percent of the country`s total fuel consumption of 41 million kiloliters in 2005.

Therefore, up to 2010, the use of fossil oils for the transportation sector was expected to be cut by 10 percent and by 50 percent in the power generation sector.

With the reduction in the use of fossil oils, the amount of foreign exchange that could be saved would reach some 10 billion dollars, Hilal said.

SOES SHOULD NO LONGER ACT AS PASIVE PARTNERS: MINISTER

2006-11-03T16:40:00.000+07:00

Investors interested in participating in infrastructure projects need no longer worry about having to team up with freeloading state firms now that the government has reformed its policies on state-owned enterprises, says a minister.

Speaking during the second day of the Indonesia Infrastructure Conference and Exhibition 2006 on Thursday, State Minister for State Enterprises Sugiharto said the government had been working hard to shake up the country's SOEs and convert them into professional, commercial entities, and prospective business partners for investors.

Among the SOEs the government is touting as prospective partners for infrastructure projects are turnpike operator PT Jasa Marga, local-government water utilities, seaport operator PT Pelindo, power firm PT PLN, and telecommunications provider PT Telkom.

The government is offering 111 projects worth US$19.1 billion during the infrastructure conference, including 10 model projects worth $4.4 billion in the transportation, power, seaport, water-supply and telecommunications sectors.

In his presentation to investors, Sugiharto outlined three ways by which investors could work together with SOEs in promoting infrastructure projects, one of which was to form a new company to execute the project.

"Such an investment could be based on 85 percent ownership for the private investor and 15 percent for Indonesia, with a time horizon of 15 years," Sugiharto said.

Another way would be for the private investor and SOE to act as equal partners in a project, with the government playing the role of regulator.

Thirdly, the government would consider allowing a private investor to take a direct stake in an SOE undertaking an infrastructure project -- meaning that the government would sell part of its shares in the SOE.

Sugiharto said the government planned to sell stakes in up to 14 SOEs next year, including Jasa Marga and PLN subsidiary Indonesia Power. He also said the government planned to sell more shares in state gas utility PT PGN by the end of the year. -- JP/Urip Hudiono

COSMETICS AND PERSONAL CARE MARKET IN INDONESIA

2006-11-01T10:15:00.000+07:00

With a total population in excess of 215 million inhabitants, Indonesia provides a potential large domestic market for personal care products. Considered to be indispensable in our daily modern life style, such products have already been long established in the Indonesian market. Traditionally, cosmetics, personal and beauty care preparations are deeply rooted and specifically among the ancient Indonesian society and the aristocracy, these products have always been part of the tradition. Indonesia, the largest archipelago in the world, is blessed with rich tropical rain forest and fertile soil, providing abundant natural plants and other materials used as basic ingredients in such products. Even until today, the Indonesian traditional cosmetics products and other beauty care preparations and treatments are gaining more and more popularity among domestic as well as international consumers in view of the popular trend of “back to nature”, whereby people nowadays prefer to use products made of natural materials and ingredients.

Although less sensitive towards overall economic condition, personal care products are generally items people are daily in need of and closely connected with the income level of the consumers. The potential vast domestic market has not only attracted major foreign companies to invest in Indonesia, also domestic manufacturers have expanded into international markets beside established substantial domestic market share. Foreign companies, who are the market leaders in the Indonesian market are UNILEVER INDONESIA, PROCTER & GAMBLE, AVON, BEIERSDORF, CUSSONS, JOHNSON & JOHNSON, SARA LEE, KAO INDONESIA, just to name a few. Renowned international product brands such as AVON, LUX, and LIFEBUOY, CLEAR, SUNSILK, BRISK, BIORE, ZWITSAL, PEPSODENT and many more are present in this market. The latest popular trend “back to nature” has given rise to a number of domestic manufacturers to develop the market; among the famous companies are PT MARTINA BERTO, PT MUSTIKA RATU, PT RISTRA INDOLAB. The latest popular innovation is the beauty treatment and services of a spa, applying traditional and natural formula and ingredients aiming at providing a healthier, more relaxing body and mind. The overall economic and financial condition in Indonesia in the post-crisis era of 1998 is quite promising and progressing; per capita income, US$ 460.- in 1998, the lowest level ever for Indonesia, is expected to exceed US$ 1,100.- for the current year of 2004, an income level also, which will bring Indonesia back into the rank of middle-income level countries. The economy is expected to grow by between 4-5%, assuming that political stability and security is under control. With the completion of the legislative and direct presidential election as well as the formation of the new government by October, 2004 Indonesia shall fully concentrate on further developing and improving the economy and by doing so, improving the purchasing power and living standard of the majority of the population.

GOVT SELECTS 10 PROJECTS TO SERVE AS PILOTS

2006-11-01T10:04:00.000+07:00

Urip Hudiono, The Jakarta Post, Jakarta

The upcoming three-day "Indonesia Infrastructure Conference and Exhibition 2006" will not only showcase major investment opportunities, but also the government's progress in improving the country's investment climate.

At least 10 infrastructure projects, involving the construction of power plants, toll roads, seaports, municipal water systems and telecommunications facilities worth an estimated US$4.5 billion, will be put up for grabs during the event, which starts Wednesday and will be opened by President Susilo Bambang Yudhoyono.

On top of that, Public Works Minister Djoko Kirmanto also plans to present another 20 projects worth Rp 30 trillion ($3.2 billion), during the event's first day of meetings with investors, said Suyono Dikun, the deputy for infrastructure to the coordinating minister for the economy, on Monday.

Meanwhile, Transportation Minister Hatta Radjasa may offer another 17 projects, while further projects will be put on the table by Communications and Information Minister Sofyan A. Djalil.

On the second day, Energy and Mineral Resources Purnomo Yusgiantoro will outline four power plant projects.

Coordinating Minister for the Economy Boediono, Finance Minister Sri Mulyani Indrawati and State Minister for State Enterprises Sugiharto are each scheduled to present updates on what the government has done to improve the investment climate.

The conference follows on from last year's "Infrastructure Summit 2005". It was originally scheduled to be held last November, but was then rescheduled to February and later to November due to the then unfavorable economic situation in the wake of last year's fuel price hikes.

Projects to be put on the table:

Telecommunications sector:
1. The "Palapa Ring" fiber optics network........US$1.5 billion

Power plants:
2. 2x600 megawatt (MW) coal-fired power plant...US$1.2 billion
in Central Java

3. 500MW coal-and-oil-fired power plant..........US$275 million
in Pasuruan, East Java

Toll roads:
4. 165-km Solo-Kertosono.............US$928 million
toll road in Central Java

5. 60-km Medan-Kuala Namu-Tebing Tinggi..........US$142 million
toll road in North and West Sumatra

Sea ports:
6. Surabaya's Tanjung Perak port expansion.......US$280 million
7. Margagiri-Ketapang ferry terminal.............US$ 97 million

Water projects:
8. Dumai, East Kalimantan........................US$ 44 million
9. Tangerang, Banten.............................US$ 37 million
10. Bandung.......................................US$ 26 million

Source: National Development Planning Board (Bappenas)

RI PRESIDENT LAUNCHED NEW POWER PLANT

2006-10-17T09:19:00.000+07:00

Business and Investment - October 16, 2006

Jakarta Post: President Susilo Bambang Yudhoyono with a scale model of the Tanjung Jati B power plant, which he launched Saturday in Jepara, Central Java, with Energy and Mineral Resources Minister Purnomo Yusgiantoro (to the President's left) and State Minister for State Enterprises Sugiharto (far left).

Yudhoyono said he expected the coal-fired plant, which can generate up to 1,320 megawatts of electricity, would be able to fulfill the nation's increasing energy demands and avert a future power crisis.

"Some 100 million Indonesians are yet to enjoy the benefits of electricity, with our power production only at 25,0000 megawatts at present," he said.

"Many others, meanwhile, have already become dependent and more demanding in their use of electricity. That is why the government is working to build more power plants, totaling 10,000 megawatts in capacity, within the next three years."

The new plants will secure the country's whole power supply by 2009, with the Tanjung Jati B itself adding enough at present for the country's main Java-Bali grid. The government is currently conducting bidding on plants, and will provide investors with a guarantee of the plants' output by state power firm PT PLN.

Yudhoyono also asked the country to seek other energy resources to reduce its dependence on oil-based power plants, mentioning pilot solar power generation projects in Yahukimo, Papua and biomass power plants in Tomohon, North Sulawesi.

The Tanjung Jati B power plant was built jointly at a cost of US$1.6 billion by Japanese Sumitomo Corporation and PLN subsidiary Central Java Power. PLN will operate and fully own the plant after 20 years, Purnomo said.
The plant's construction was delayed due to the Asian financial crisis in the late 1990s. Its sister projects -- the Tanjung Jati A and C plants -- are still postponed. --Suherdjoko

RUSSIAN COMPANY TO BUILD FIRST RI NUCLEAR POWER PLANT

2006-10-17T09:16:00.000+07:00

National News - October 16, 2006

Jongker Rumteh, The Jakarta Post, Gorontalo

Russian electricity company Raoues is slated to build Indonesia's first nuclear power plant. The facility will be located in Gorontalo, Sulawesi, in order to meet long-term demand for electricity there and in nearby provinces, Gorontalo Governor Fadel Muhamad said.

"The new plant is expected to start operating by the end of 2007. Gorontalo will be registered as the first province in Indonesia to enjoy nuclear electricity," Fadel said.

Fadel said the nuclear plant would be designed to have a generating capacity of 90 megawatts, which would be sold to state-owned electricity company PT PLN at a price one-third lower than that of conventional electricity.

Fadel made the remarks at a Ramadhan get-together in Gorontalo over the weekend with PLN business director Sunggu Anwar Aritonang, PT PLN Suluttenggo general manager Sigit Prakoso Suyoto, and Raoues' representative in Indonesia, Bambang Waskito.

Bambang said the power plant would be built aboard a ship floating off the shore of Gorontalo. The electricity would be transmitted to PT PLN Suluttengo.

A cooperation agreement will reportedly be signed by Fadel and Raoues representatives in Russia. "The Russian side has prepared everything. It's now waiting for Gorontalo province's response," Farino Sariowan, a Raoues project developer in Indonesia, said as quoted by Tempo Interaktif news portal.

Aritonang said the project would help address the growing need for electricity in the country.

Commenting on fears about its safety, Aritonang said while Indonesia does not have experience operating a nuclear power plant, it does have a solid base of knowledge.

"We have many experts who have studied it. Based on existing literature, nuclear power plants are safe," he said.

"We have to cooperate with other countries, though. For the first stage, we will just buy the nuclear-powered electricity from the other country."

In a related development, a member of the Gorontalo Legislative Council, Amir Piola Isa, said the council had approved a plan to establish three infantry headquarters with the aim of safeguarding the security of investments in the province.

"All the people of Gorontalo, as well as the security officers, are ready to safeguard all important installations, including the installation of the floating nuclear power plant belonging to the Russian company," he said.

GOVT ALLOCATES RP 100 BILLION IN DEALING WITH FOREST FIRES

2006-10-13T11:37:00.000+07:00

Jakarta (ANTARA News) - The government has proposed an allocation of Rp 100 billion which will be taken from the state budget to overcome forest fires in Sumatra and Kalimantan, Coordinating Minister for People`s Welfare Aburizal Bakrie said.

"The president has requested an allocation of some Rp 100 billion to overcome the haze. I came to the House of Representatives last night and the government will propose such allocation from the national disaster handling fund," Aburizal said after meeting with President Susilo Bambang Yudhoyono at the presidential office here on Thursday.

The minister said such amount will be used among other things to lease helicopters and aircraft which will be used to carry water bombs or Hercules aircraft for cloud seeding.

"On Sunday (Oct 15) two helicopters which we have hired from Malaysia will start carrying 9,000 liters of water bombs," the minister said, adding that another hired helicopter is also expected to come from Australia.

In addition, the cloud seeding would be carried out two days before the Meteorology and Geophysics Agency decided that cloud seeding is feasible.

According to him, the first cloud seeding will be carried out in Jambi province (Sumatra) and the second in Central Kalimantan province.

The haze in Sumatra and Kalimantan which has been going on for the last two months, had caused disappointment of two neighbouring countries, Malaysia and Singapore.

Previously, Forestry Minister Malam S. Ka`ban said that the haze in the past several days was the result of smoke accumulating from forest and bush fires raging in the previous days.

He said that there were about 6,000 hotspots in Indonesia in the past weeks but now their number had dropped to 600. The decrease was thanks to the use of water bombs from helicopters.(*)

Copyright © 2006 ANTARA

October 13, 2006

NEW GOLD MINING IN KALIMANTAN

2006-10-13T11:13:00.000+07:00

JAKARTA: Vancouver, Canada-based mining company Kalimantan Gold Corp. Ltd. has teamed up with Australian firm Oxiana Ltd. to explore and develop the Kalimantan Surya Kencana (KSK) copper-gold site in Central Kalimantan.

Under the agreement, Oxiana will receive up to two thirds of all proceeds from the exploration contract after funding a US$37.5 million bankable feasibility study of the site within two years.

Kalimantan Gold owns 75 percent of the 941-square-kilometer site, which since its initial exploration in 1996 has already shown a total of 38 copper-gold prospects. Local firm PT Pancaran Cahaya Kahayan will hold the remaining stake.

Company Information:

KALIMANTAN GOLD CORPORATION LIMITED
Address:
UNIT 1 - 15782 MARINE DRIVE
WHITE ROCK
British Columbia
Canada, V4B 1E6
Phone: +1 (604) 536-2711
Fax: +1 (604) 536-2788
Website: http://www.kalimantan.com/
Type: Public

OXIANA LIMITED
Address:
9TH FLOOR, 31 QUEEN STREET
MELBOURNE
Victoria
Australia, 3000
Phone: +61 3 8623 2200
Fax: +61 3 8623 2222
Website: http://www.oxiana.com.au/
Type: Public

INDONESIA TO SPEND US$1.4 BLN FOR BIOFUEL DEVELOPMENT

2006-09-29T15:48:00.000+07:00

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

2006-09-29T15:35:00.000+07:00

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

2006-09-29T14:58:00.000+07:00

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

2006-09-15T12:29:00.000+07:00

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

2006-09-15T12:23:00.000+07:00

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

2006-09-04T15:32:00.000+07:00

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

2006-09-01T10:48:00.000+07:00

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.

COTTON IMPORT MARKET IN INDONESIA

2006-08-28T15:01:00.000+07:00

Indonesia is heavily dependent on cotton import for fulfilled supply for spinning industry. The scarcity of cotton supply in Indonesia from 1993 to 1995 posed difficulties on textile and clothing producers in the country in obtaining cotton and synthetic fiber supply.

Indonesia's cotton imports has so far been managed by several shippers like Collon of the USA, Daiwa, KIA, Nisho Iwai, and several other Japanese companies as well as International Kokkon, a shipper from Uzbekistan.

Indonesia's cotton import rose from 454,000 tons in 2004 to 570,000 tons in 2005, but the import value was down from US$686 million in 2004 to US$427 million in 2005.

Most of imported cotton supply has so far been received from the United States (31.37%), and the rest come from Australia (19.87%), Brazil (8.80%), South Africa (5.30%), India (2.74%), Pakistan (2.80%), and several other countries.

The biggest cotton consumer in Indonesia is the spinning industry, especially industrial company’s that produce yarn with 100% of their basic material consisting of cotton fiber. Other kinds of yarn that consume much cotton are tetoron cotton (TC) and CVC. The other cotton consumers of cotton are cosmetics industry, which produce cosmetic cotton that only consume around 2% from total consumption.

DEVELOPMENT AND PROSPECT OF PULP INDUSTRY IN INDONESIA

2006-08-23T08:57:00.000+07:00

INTRODUCTION

In Indonesia, timber industry is facing serious shortage in supply of wood raw material as a result of the government policy of tightening regulation to preserve the country’s dwindling tropical forest. The government has launched intensive operations against illegal logging and smuggling, which have partly been responsible for the extensive damage to the country’s natural forests. However, the government policy of imposing tighter logging quota has also contributed to rampant illegal logging involving timber processing companies which could not rely on legal sources for log raw material.

Amid the growing difficulties, pulp industry managed to continue expansion and increase production. The past five years saw a significant growth in the country’s pulp production. Good prices on the domestic and international market have boosted the industry. Scarcity in raw material supply is still a threat but pulp industry fares better than other timber processing industries as it could use trees from private-owned forest, plantation forest (HTI) in addition to natural forest.

A number of pulp making companies have collapsed over heavy debt burden in the wake of the monetary crisis in 1997/1998, but many such as the Sinar Mas Group and the Raja Garuda Mas Group, have succeeded in overcoming the impact of the crisis. PT Kiani Kertas is now seeking to sort out its debt problem with its creditors mainly state Bank Mandiri.

PULP PRODUCERS

In Indonesia have 20 pulp producers with a total production capacity of 6.3 million tons and 10.4 million tons of paper per-year. It placed Indonesia as 9th largest of pulp producers and 12th largest of paper makers in the world.

INDAH KIAT PULP AND PAPER

PT Indah Kiat Pulp and Paper is the largest pulp maker in the country. The company is placed in Riau-Sumatera Island, with production capacity 1.8 million tons per year, its mean 29% from the country total capacity. The company is part of Sinar Mas Group that has 7 pulp and paper manufacturer in the country.

RAJA GARUDA MAS GROUP

This company group is also a major pulp and paper producer. It is controlled by APRIL (Asia Pacific Resources International Holding Ltd.). Among its pulp and paper producing subsidiaries is PT Riau Andalan Pulp and Paper with production capacity 1.3 million tons per-year or 21% from the country’s total capacity. Other subsidiaries include PT Toba Lestari, formerly known as PT Inti Indorayon Utama.

PT KIANI KERTAS

Kiani Kertas is facing debt repaying problems to the Bank Mandiri, the state-owned bank and now in the process of restructuring. The Banks plans to sell the company to recover their non-performing loan. The company valued assets around US$ 788 million and its debts are around US$ 400 million.

LIST OF INDONESIAN PULP PRODUCER, 2006
(Names of company, Location, Production capacity tons/year)
- PT Indah Kiat Pulp and Paper, Riau, 1.8 million
- PT Riau Andalan Pulp and Paper, Riau, 1.3 million
- PT Lontar Papyrus Pulp and Paper Industry, Jambi, 850 thousand
- PT Kiani Kertas, Berau, 550 thousand
- PT Tanjung Enim Lestari, Muara Enim, 450 thousand
- PT Wirakarya Sakti, Kuala Tungkal, 430 thousand
- PT Toba Pulp Lestari, Porsea, 240 thousand
- PT Kertas Kraft Aceh, Lhok Nga, 165 thousand
- PT Pakerin, Mojokerto, 145 thousand
- PT Bekasi Teguh, Bekasi, 90 thousand
- PT Kertas Leces, Probolinggo, 72 thousand
- PT Polapulpindo Mantap, Lampung, 42 thousand
- PT West Kalindo, Kalimantan, 39.6 thousand
- PT Eureka Aba, Mojokerto, 30.5 thousand
- PT Basuki Rahmat, Banyuwangi, 10 thousand
- PT Kertas Blabak, Magelang 5.4 thousand
- PT Pura Nusa Persada, Kudus, 5 thousand
- PT Kertas Padalarang, Bandung, 3 thousand

Referring to lack of wood timber raw material in the country, pulp industry remains to show good performance. In the past five years the capacity utilization of pulp industry has remained high at around 80%.

In 2000 the country’s pulp production totaled 4.1 million tons, up 15% to 4.7 million tons in 2001. The tightening of logging quota caused a decline of 0.4% in 2004, but in 2005 the production rose again to 5.5 million tons.

EXPORT MARKET

Indonesia has exported part of its pulp production. In 2000, exports of pulp were valued at 1.3 million tons valued at US$ 710.6 million, up to 1.7 million tons but down in value to US$ 564 million in 2001. In the next two exports rose further to each 2.4 million tons valued at US$ 791 million in 2003. In 2004, exports fell to 1.67 millions tons, but in 2005 exports surged again to 2.55 million tons valued at US$ 932 million.

Exports of pulp by Indonesia are dominated by the type of chemical wood pulp, soda or sulfate bleached of non-coniferous. In 2003, exports of pulp of this type totaled 2.37 million tons at US$ 789.1 million or 99.8% of the country’s total exports.

The main countries of destination for the country’s exports of pulp are Asia countries such as China, South Korea, Japan, Taiwan, Vietnam, and India. In Europe the main countries of destination are Italy, the Netherlands, France, and Germany.

IMPORTS MARKET

The country still needs to import pulp and tended to increase. Imports market are relatively small, only 17% of the local consumption. In 2000, imports of pulp totaled 617,804 tons valued at US$ 395 million, up to 825,704 tons in 2002 but down in value to US$ 373 million.

Imported pulp is put in 16 different tariff categories. The type of chemical wood pulp, soda or sulphate bleached of coniferous dominated of imports, and followed by the chemical wood pulp dissolving grade, which is used mainly by rayon fiber industry.

Imports of pulp have come mainly from Canada, Brazil, South Africa, and the United States.

LOCAL MARKET

Local consumption of pulp, 95% is for paper industry, and followed by rayon fiber industry from 3.8 million tons in 2005. It was decrease 14.2% form the 2004 for 4.4 million tons.

INDONESIAN GOVERNMENT WILL GIVE ANOTHER INT'L CALL SERVICE LICENSE

2006-07-05T15:55:00.000+07:00

The Jakarta Post, Jakarta: The government plans to allow another telecommunications company to provide direct international call services in competition with the two existing operators, PT Indosat and PT Telkom Indonesia.

Information and Communications Minister Sofyan Djalil said in Jakarta on Tuesday that the new license would be sold by way of auction to an existing telecommunications firm.

"But, as the issuance of the new license is aimed at reducing Internet bandwidth tariffs, the license will only be given to a company willing to develop a fiber-optic network connecting Indonesia and other countries," he said after inaugurating a new Information Access Center (IAC) at the head office of state postal services operator PT Pos Indonesia.

He said that existing telecommunications companies would be allowed to participate in the auction. However, he added that the government would give priority to firms with large customer bases.

In Indonesia, 50 percent of Internet access uses global bandwidth.

Sofyan said that if Indonesia had fiber-optic connections to countries like Hong Kong and Singapore, bandwidth tariffs could be reduced.

For example, the bandwidth tariff in Indonesia (using Telkom's Speedy service) was about Rp 300,000 (about US$32) for internet use of 500 megabytes per month, with a connection speed of 20 kilobytes per second, while in Australia customers could access unlimited bandwidth for only $45 per month.

Sofyan said that the government was making serious efforts to increase Internet access in Indonesia.

According to figures supplied by the Indonesian Association of Internet Providers, 16 million people in Indonesia currently have access to the Internet.

Sofyan also said that a new joint venture between local and foreign companies would build an undersea communications network connecting Java and other islands in Indonesia.

"We will sign an agreement with the joint venture next week," he said. However, he did not name the companies.

The Information Access Center (IAC) was developed using a design produced by the Korea Agency for Digital Opportunity and Promotion (KADO), which donated 55 linked personal computers and one server worth Rp 5 billion, with broadband Internet access facilitated by Wasantara.net.

The center consists of an Internet lounge, seminar room, business center and workshops.

Sofyan said that this integrated model should serve as an example for other internet and telephone rental providers throughout Indonesia.

A WORLD FORUM ON INDONESIAN INFRASTRUCTURE 2006

2006-07-05T15:29:00.000+07:00

The Jakarta Post, Jakarta: Indonesia is due to hold its twice-delayed 2nd infrastructure conference and exhibition in November in an effort to drum up much needed private-sector investment to bring the country's woefully inadequate infrastructure into the 21st century.

Titled Indonesia Infrastructure 2006, the conference will be held from Nov 1-3, and will include a two-day forum and workshop on Indonesia's infrastructure needs in which senior decision makers from the government, industry and international agencies will address a variety of strategic issues.

Participants from the technical, commercial, legal and financial sectors will attend the event.

Coordinating Minister for the Economy Boediono said in a press statement Tuesday that the government would announce new investment rules and policies during the conference.

"At the conference, presentations will be made by officials from the relevant ministries on the projects on offer and the new rules," he said.

Meanwhile, Suyono Dikun, the deputy for infrastructure to the coordinating minister, said that it was expected that a number of new regulations and laws would be put in place before the conference.

The new rules would replace regulations dating back to 1967, and would seek to improve legal standards, ease restrictive central and local government interference, and reduce the length of time required to set up a business to about 30 days compared to 150 days at present.

Dikun said that over the coming five years, Indonesia would need about Rp 600 trillion (about US$63 billion) in new investment in the infrastructure sector.

"We hope that between Rp 120 trillion and Rp 150 trillion of this will come from the private sector," he said.

He added that the coordinating ministry, in collaboration with the Indonesian Chamber of Commerce and Industry (Kadin) and the National Development Planning Board (Bapenas), was drawing up a list of infrastructure projects that would be offered during the conference.

The government offered about 91 projects valued at $22 billion during an earlier conference, titled the Infrastructure Summit, in January last year. Disappointingly, only one of those projects has been completed, and only five others are currently underway.

Besides the forum and workshop, the three-day event will also feature an exhibition in which leading companies will get the opportunity to showcase their products and services.

Individual one-to-one meetings with the exhibitors will be arranged for interested parties.

Kadin deputy chairman Chris Kanter said that so far, 375 participants had registered to participate in the conference, while 80 local and international companies would take part in the exhibition.

Organized by:
INDONESIAN CHAMBER OF COMMERCE
Address:
KADIN EVENT SECRETARIAT
Menara Kadin 29th Floor
Jl. HR Rasuna Said X-5 Kav. 2-3
JAKARTA 12950 - INDONESIA
PHONE: 6221 5274454, 6221 3157749
FAX: 6221 5274634, 6221 3152979
Official Website: http://www.indonesiainfrastructure.com
email: info@indonesiainfrastructure.com

INDONESIAN NUKE PLANT WILL BE TENDERED ON 2007

2006-06-29T15:19:00.000+07:00

Rendi Akhmad Witular, The Jakarta Post, Jakarta

The government will hold a tender next year to select contractors to construct the country's first nuclear power plant, a minister says.

"The nuclear reactor is part of our national energy policy. It will come onstream between 2015 and 2016 in Gunung Muria (in Central Java). We will launch the tender next year so as to be able to meet the deadline," Energy and Mineral Resources Minister Purnomo Yusgiantoro said Wednesday after meeting Vice President Jusuf Kalla.

He said that investors interested in bidding should have a proven track record in the construction of pressurized water reactors. Most such companies come from the United States, Japan, France and South Korea.

The reactor is expected to be able to produce a total of 4,000 megawatts (MW) by 2025. The National Nuclear Power Agency (Batan)'s Nuclear Energy Development Center will coordinate the ambitious project.

When asked whether the reactor would be producing electricity by 2011, as stated Tuesday by Research and Technology Minister Kusmayanto Kadiman, Purnomo said this would be impossible.

"It will require comprehensive studies by our nuclear scientists before the reactor is started. We don't think it will be onstream by 2011. It is just too short a time," said Purnomo, adding that he was not aware of any local investors interested in developing the project as hinted earlier by Kusmayanto.

During the first phase of construction, the Muria nuclear power plant will consist of six generators, with each capable of producing 1,000 MW of power.

The New Order regime under the leadership of former president Soeharto had originally mooted the possibility of constructing a nuclear power plant. However, the suggestion met strong resistance from the public and non-governmental organizations over concerns about public safety and environmental hazards.

Separately, the acting president director of state power utility PLN, Djuanda Nugraha Ibrahim, told reporters that PLN would definitely buy power from the nuclear reactor.

"PLN will need an additional 1,500 MW to 2,000 MW annually after 2016. If the nuclear power plant can supply 4,000 MW, we will definitely buy the power based on the prices set for independent power producers," said Djuanda.

PROJECT HEADS MUST BE QUALIFIED: BAPPENAS

2006-06-22T16:06:00.000+07:00

The Jakarta Post, Jakarta

The director of the National Development Planning Board (Bappenas) has stressed the need for the leaders of government-funded projects to possess procurement and project leadership certificates.

In a speech to a provincial development planning forum in Banten on Wednesday, Bappenas director Paskah Suzetta stressed the importance of certification to prevent incompetent officials being assigned to lead government projects.

He was quoted by Antara as saying that the certification process, which commenced in 2005, was intended to ensure the competence of project leaders, which, in turn, would help accelerate project execution and improve compliance with the law.

Meanwhile, the Bappenas director of regional affairs, A. Rudiyanto, expressed concern about the poor performance of officials charged with heading up government projects. For example, he said, out of 100,000 regency and municipal officials from throughout the country, only 12 percent, or 12,000, had passed the recent procurement and project leadership examinations.

However, he added, those who failed could retake the examinations after receiving additional training.

"We need more than 7,040 project leaders for the country's 440 regencies and municipalities," he said.

He added that the test papers had been set by a Bappenas team in collaboration with a number of universities.

INDONESIA, BEEFING UP DEFENSE, SEEKS SUBMARINES AND JETS

2006-06-22T15:39:00.000+07:00

JAKARTA (Bloomberg): Indonesia's defense minister said the country plans to buy submarines, fighter jets and frigates in a shopping spree stretching from Russia to the Netherlands.

The world's largest archipelago plans to buy two new German submarines next year, doubling its fleet, and four Dutch frigates within three years, Defense Minister Juwono Sudarsono said in a Tuesday interview in Jakarta.

Indonesia, which owns four Russian-made Sukhoi fighters at $45 million each, will buy a further six over the next four years.

The government, which also owns six F-16 jets, is considering asking London-based BAE Systems Plc, Europe's largest weapons maker, to recondition Indonesia's eight Hawk fighters, Sudarsono said.

Indonesia, which emerged from military dictatorship in 1998, is updating its aging arsenal amid pressure from Asian neighbors and the U.S. to tackle piracy in the Malacca Strait and other coastal waters. Sudarsono, who called the purchases "the bareessential," is buying the weaponry even as he says his defense budget can't cover a soldier's minimum wage.

"It's a reflection of the international concern," said Bruce Gale, a Singapore-based independent political risk consultant who has studied Southeast Asia since 1988. "Indonesia has seen a lot of pressure from the U.S. to do something about the Malacca Strait. The navy does need to be boosted. Whether they can afford it is another question."

Indonesia's defense budget may swell to as much as US$3 billion next year from $2.6 billion this year, Sudarsono said. He's relying on economic growth over the next decade to boost government revenue and fund additional equipment purchases.

Indonesia expects the economy to expand 6.3 percent next year from 5.9 percent in 2006.

"You can't have a powerful military if you don't have a powerful economy," Sudarsono said. "It's nothing threatening, just enough to maintain what we call minimum essential force. We must provide some degree of deterrent."

Though the government is likely to choose German submarines, it's also considering South Korean and Russian boats, he said.

Indonesia, which bought its current pair in 1980, needs a fleet of eight to patrol its waters properly, he said.

Pirate attacks on ships rose to 61 in the first three months of the year from 56 a year earlier, according to the International Maritime Bureau. Indonesia accounted for almost one third of the attacks, the group said. Indonesia, made up of about18,000 islands, neighbors Malaysia, Singapore, the Philippines, Papua New Guinea, East Timor and Australia.

Indonesian is also in talks with China and South Korea about developing jointly a missile-carrying patrol boat, Sudarsono said. South Korea may supply radar and communications equipment, he said.

Spending on border defenses won't necessarily bolster the military's logistical capacity, which is used to respond to natural disasters. An earthquake on May 27, the worst tragedy since the 2004 tsunami, killed 5,782 people in the central Java region. Floods and landslides over the past week killed at least 180 people on the island of Sulawesi.

Sudarsono said he plans to spend 70 percent of future defense budgets on equipment to improve the military response to such catastrophes, adding planes, trucks and logistical supplies. He plans to add as many as seven C-130 Hercules transport planes,which can carry aid or troops. Indonesia currently has dozens of the aircraft but only eight operational.

"We anticipate in the next five to 10 years there will be more earthquakes, natural disasters and volcano eruptions, so our defense will be on focused on providing immediate and timely relief," Sudarsono said.

INDONESIA PLANT TO DEVELOP LIQUID COAL COOPERATE WITH JAPAN

2006-06-13T15:45:00.000+07:00

Jakarta (ANTARA News): The Indonesian government was sounding out the possibility of the liquid coal development with the Japanese Investor, J-Coal, the ESDM Nenny Sri Utami headword of the Body of the Department's Research And Development.

According to her, ended the liquid opening of the coal seminar in Jakarta, on Tuesday, the government will ask Earth Resource co-operated with J-Coal in the development of liquid coal that will be made the synthetic oil.

The "location that possibly was built was Berau, East Kalimantan, Bangko, South Sumatra or Muriah, South Kalimantan," he said.

Beforehand, Earth Resource will co-operate with the South African company, South Africa Synthetic Oil Liquid (SASOL) developed the liquefaction of the coal.

"However, this co-operation was postponed because SASOL was concentrating on developing liquid coal in Qatar, Nigeria, and China," said Nenny.

Nenny added, the liquefaction capacity of coal was with J-Coal sounded out 3 thousand tonne per the day and it was hoped could produce 12 thousand barrel synthetic oil per the day.

Planned, the factory could begin to be built in 2012 and 2015 has begun to be productive.

According to him, was based on the estimate, thought development investment of liquid coal was 2,4 billion US dollar for produced 55 thousand barrel synthetic oil per the day or 23-29 US dollar per barrel. The coal that was needed reached 12 thousand tonne per the day.

In the meantime, the Director General of the Mineral, coal, and the Department's Geothermal of ESDM Simon F Sembiring added, the government was still studying giving of the incentive for the development of liquid coal. His incentive could take the form of the reduction in royalties or the import duty tax for the owner of the mine and the liquid coal developer. Giving of the incentive was enabled in accordance with President Instruction No. 2 in 2006 about the provisions and the Utilisation of coal that was diluted as the Other Fuel dated January 25 2006.

This President Instruction mentioned Minister ESDM was assigned to prepare the incentive for the development of liquid coal and afterwards proposed to the Department of Finance. Simon also added, the coal reserve in Indonesia very abundant that is reached 58 billion tonne.

RI, SINGAPORE LEADERS TO INK DEALS ON ECONOMIC ZONE

2006-06-13T15:35:00.000+07:00

The Jakarta Post, Jakarta: President Susilo Bambang Yudhoyono and Singapore Prime Minister Lee Hsien Loong are slated to sign an agreement on economic cooperation that will include arrangements for the establishment of special economic zones in Indonesian territory.

The agreement, which will open up more opportunities for Singapore manufacturers to invest in Indonesia, will be signed by the two leaders on June 25 in Batam, presidential spokesman Dino Patti Djalal told reporters Monday.

"The agreement will include the establishment of special economic zones in Batam and Bintan to facilitate investment in these areas by more companies from Singapore," he said without going into details.

Vice President Jusuf Kalla has initiated several meetings with officials from Singapore to promote Batam and Bintan as Indonesia's main investment destinations for investors from the neighboring country.

Singapore is interested in Bintan and Batam because the islands are located less than an hour by ferry from Singapore, and have adequate business infrastructure, abundant water and labor supplies, and more relaxed customs management and supervision than other areas in Indonesia.

Due to a lack of land, Singapore is now trying to expand its manufacturing into neighboring countries. Bintan and Batam are likely to be its main focuses in this regard.

Under the new customs and excise bill currently being deliberated in the House of Representatives, companies operating in special economic zones will be exempted from paying excise and import duties.

Indonesia to buy transport planes from Poland

2006-06-07T10:06:00.000+07:00

JAKARTA (Agencies): Poland agreed Tuesday to sell 10 M-28 Skytruck light transport airplanes to Indonesia as part of a memorandum of understanding to increase defense cooperation.

The memorandum was signed by Defense Minister Juwono Sudarsono and his Polish counterpart Radoslaw Sikorski in Jakarta.

The purchase will use a US$75 million loan offered by Poland. The east European country initially offered a loan up to $260 million to buy the airplanes.

The Skytrucks -- produced by Polish state aircraft maker PZL Mielec -- will be operated by the National Police and the Navy for maritime patrol missions.

Indonesia purchased several Skytrucks for $135 million during the presidency of Megawati Soekarnoputri in 2003.

Juwono also said that state aircraft maker PT Dirgantara Indonesia (DI) would get a work contract of between 3 to 6 percent of the value of the purchase as part of efforts to empower state-owned defense industries.

Skytruck is a dual-engine light transport airplane with similar capabilities to PT DI's own CN-212 Aviocar.

RI to Rumsfeld: Let nations decide how to fight terrorism

2006-06-07T10:04:00.000+07:00

JAKARTA (AP): Indonesia warned U.S. Secretary of Defense Donald Rumsfeld Tuesday that Washington risked triggering a backlash if it tried to force its approach to fighting terrorism on the rest of the world.

Rumsfeld, wrapping up a three nation tour of the region, held talks with President Susilo Bambang Yudhoyono, Defense Minister Juwono Sudarsono and other senior government officials.

Topics discussed included improved ties between the two nations' militaries, security in the Malacca Strait and ways to boost cooperation in the fight against terrorism.

Juwono said he told Rumsfeld that, "as the largest Muslim country, we are very aware of the perception ... that the United states is overbearing," and advised against trying to force itstough anti-terror approach on other nations.

"It's best that you leave the main responsibility of anti-terrorist measures to the local government in question and not to be overly insistent about immediate results arriving from your perception of terrorists," he said at a joint news conference.

INDONESIA PLANS TO BUILT NUCLEAR POWER PLANT

2006-05-16T14:22:00.000+07:00

Jakarta (ANTARA News) - Indonesia is considering cooperating with a few foreign countries to set up a nuclear reactor on the Muria Peninsula, Central Java, in order to reach its traget of having a 1,000 MW nuclear power plant by 2015, a cabinet minister said.

"We plan to be in possession of a 1,000 Megawatt facility by 2015 as the first stage of a plan to have a 4,000 Megawatt nuclear power capacity. Because implementation of the project will take six years, it means we must start it in 2009. So we should make the necessary preprations within the next two years," Mineral Resources and Energy Minister Purnomo Yusgiantoro said here Monday.

"At the moment we are still considering four foreign countries to cooperate with, namely France, Japan, South Korea, and the US," he said.

According to Purnomo, since several years ago the government has placed some monitoring instruments in the Muria Peninsula to evaluate whether it was safe to use the area as the location of a nuclear power plant.

"Apperently, up to now the conclusion obtained from the monitoring instruments are showing that the area is stable enough for a nuclear power plant," he said.

Purnomo said Indonesia actually already had a reactor producing about 30 Megawatt in Serpong, West Java.

"And, it is using BWR (Boiling Water Reactor) technology So, our human resources and experts are already familiar with BWR technology. Most possibly we will also use BWR technology (in the Muria project) but maybe of a more sophisticated kind ," he said.(*)

OPPORTUNITY ON POULTRY MARKET IN INDONESIA

2006-05-11T14:35:00.000+07:00

The poultry industry in Indonesia is playing an important role in the nations’ economic development in respect of employment creation and opportunity, generating and developing especially rural economic income growth and in earning foreign exchange. Poultry products are also a source of protein and affordable to the majority of the population. An estimated number of 500.000 households are involved in the traditional poultry farming of indigenous fowls, nationwide. The economic and financial crisis of 1997 has hit the poultry industry badly due to drastic decrease of the purchasing power of the people causing a drastic downfall of the demand for poultry products in the domestic market and the devaluation of the local currency. Many poultry farms were forced to close the operation due to the fall of the local currency against the US Dollar and as a matter of fact, the required components in the farming industry, from animal feed to antibiotics and vitamins are still heavily importing dependent. The Directorate General of Livestock Production of the Ministry of Agriculture registered only 22 parent stock breeding farms remained in 1998 out of 101 in total, whereby the survivors were only operating at a capacity level of around 30%, as a negative impact of the economic crisis.

The poultry industry, however, recovered earlier than expected as the foreign exchange situation was relatively stable after the year 1999. In the year 2000 the total poultry meat production was registered at more than 817.000 tons, an increase of 24% from the previous year of 1999 of 620.000 tons. Assuming a relatively stable economic and political climate, the poultry meat production is estimated to reach a figure in excess of 855.000 tons for the current year 2001, an average annual increase of 4.7%. The consumption of poultry meat during the crisis period was merely 450.000 tons and estimated to increase to a level of some 600.000 tons in the year 2000. The fact that Indonesians tend to consume more poultry meat as a substitute for beef and that the demand for poultry products is characterized as income elastic, leads to a higher consumption figure in the near future.

Currently, per capita consumption of poultry meat in Indonesia is 3.8 kg and with expected improvement in the living standard and better purchasing power of the people, the consumption should easily reach a figure of between 740.000 to 750.000 tons annually. This condition indicates that the production output has not yet been fully utilized domestically, the supply side with regard to production capacity has not reached the so-called levelling-off position; the up-stream industry still has over capacity. This means in turn, that more than sufficient room for development and expansion is available for the future.

TRADE POLICY

Indonesia imposes a 5% import duty on all poultry products as listed in the import classification (HS-code system), although there is a WTO bound rate of 40%. All poultry meat products to be imported must be attached with a “halal” label and certified by the Indonesian Islamic Council (MUI). The label is issued by a number of U.S. Islamic centres, which in turn are approved by the Indonesian MUI.

Since the end of 1999 general importers are allowed to import poultry products; they however have to inform the Directorate General of Livestock Production detailed information on the type of product imported, volume, code number of the slaughtering house, port and market destination. In view of the growing import trend of such products recently, the government attempts to control the internal distribution of imported poultry products away from traditional markets in order to protect the domestic poultry producers. Imported poultry products indeed are channelled to market outlets requiring high quality products such as specialized super markets, hotels and restaurants businesses. In the same period of time the government has also removed poultry farming business from the so-called Negative Investment List, a former regulation restricting or prohibiting foreign companies to invest in certain business sectors. Foreign companies are now allowed to establish breeding farms or animal feed mills. A regulation was also revoked in mid 2000, where foreign poultry farms no longer have the obligation to export at least 65% of its production.

INDONESIA DEVELOP AND RESEARCH ON ALTERNATIVE ENERGY

2006-05-09T15:12:00.000+07:00

Jakarta, 9/5/2006 (Kominfo-Newsroom)

The research and Implementation of Technology Bureau (BPPT) as the research and implementation of technology consistently and research the development and the engineering to give solution to find other source of alternative energy.

This matter was sent by the BPPT Head, Prof. Ir. Said D. Jenie, Sc. D. was in the address written that was read out by the Deputy the Information Technology Field, Energy, material & the Environment, Dr. Ir. Marzan A. Iskandar in the opening of Vegetable Oil of the Utilization Workshop Directly as the Alternative Fuel, in Jakarta, on Tuesday (5/9/2006).

They said, the price of petroleum in the world of this year was high enough compared to last year, to revolve US$ 60-70/barel, that could it was worried about strike the Indonesian economy because despite this country the producer of oil, but also including wasteful oil in the use of oil, this year was estimated reached 1.13 million barrel per the day.

Whereas the production of Indonesian oil in general only 1.06 million barrel per the day so as to the deficit happen 70 thousand barrel per the day, so as since 2005 Indonesia had the predicate of the importer's country of net oil. The other problem, oil that was consumed was crude oil, at this time with the price of crude oil US$ 70 per barrel, then the price of diesel fuel reached US$ 87 per barrel.

Moreover, the oil refinery capacity could only satisfy the requirement for fuel until 992 thousand barrel per the day. With consumption of fuel that not balanced, where around 43% was consumption of the diesel fuel kind, government was forced to import a third him, because generally an oil refinery did not produce certain kind fuel like diesel fuel until as big as that, the BPPT headword.

The height of the price of world oil and consumption of Indonesian oil according to him, was worried not only will disrupt in a manner the departure tax but also could result in the decline in the exchange rate of Indonesian currency, because of the fall of the foreign exchange reserve importing crude oil and fuel oil, said Said while adding, the government must begin to make use of the source of energy alternative like natural gas, coal, bio-energy and appropriate geothermal the requirement.

So, BPPT carried out various researches including various production technology bio-energy like bio-ethanol, bio-diesel and bio-oil was studied and sat this through the Centre of Development Technology of Energy-TIEM resources also was done by the upper study of the source of alternative energy for the replacement of diesel oil and kerosene that were known with the term “Pure Plant Oil”, he said.

Pure Plant Oil was vegetable oil that was used directly without the modification in manner chemistry. His use needed extra fuel tanks and the heater, as well as the additional filter that make use of hot from the machine to guard vegetable oil stayed hot so that his viscosity is equal to diesel fuel, said Said.

With the existence of various sorts to the replacement of fuel of alternative technology, according to him, was hoped the difficulty could be resulting from the rise in the price of petroleum reduced.

KRAKATAU STEEL PLANS TO BUILD NEW FACTORY

2006-05-09T12:05:00.000+07:00

TEMPO Interactive, Monday, 08 May, 2006

Jakarta: Investors from India and China are interested in joining PT Krakatau Steel in a steel factory construction project in South Kalimantan worth between US$600 million and US$1 billion.

Both investors are interested in building roads, steam powered electricity power plants, and harbors.

Director General of Metals, Machineries, and Multifarious Industry, Anshari Bukhari, said Krakatau Steel can only afford fifteen percent of the project's cost.

That is why this state company needs investors.

“However, Krakatau Steel has the right to choose the investors it prefers,” said Anshari in Jakarta last weekend.

Krakatau Steel has two options for expansion to South Kalimantan, either to build only the factory, or to build an integrated factory.

For building a steel processing factory, the funds required are US$119 million, but Krakatau Steel can only prepare some US$30 million.

Building an integrated factory will require between US$600 million and US$1 billion.

This includes not only building a factory, but also for funding the construction of supporting infrastructure.

Due to the large funding requirements, Krakatau Steel will build the factory first.

“The proper study of this factory building will be complete in June,” said Anshari.

Construction of the factory can start next year and is scheduled to be completed in 2008.

The new factory is necessary because the state's steel demand currently reaches between four million and five million tons per year.

However, national production is only between two million and 2.5 million tons, and the remainder must be imported.

The demand for steel will keep increasing and it is predicted that by 2008, it will reach six million tons.

PT Krakatau Steels's President Commissioner, Amir Sambodo, confirmed that investors from India and China were interested in working together to develop an integrated steel factory in South Kalimantan.

He said that the two investors' interest was a positive signal in terms of the plan to build an integrated steel factory.

Krakatau Steel is preparing the technical plans, including the plan to build infrastructure including roads, bridges and a harbor.

Some time ago, Krakatau Steel's President Director, Daenulhay said this expansion project to South Kalimantan is part of the business plan to increase steel production up to 20 million tons per year.

This target will be carried out in phases, starting in 2008 by producing a million tons per year, 10 million tons by 2013 and 20 million tons in 2020.

The funding required to meet this target is US$2 billion.

INDONESIAN DEFFENSE AND SECURITY PROCUREMENT

2006-05-08T15:39:00.000+07:00

Indonesia is the 4th most populous country in the world after China, India and the USA and total number of population in 2002 is nearing the 210 million mark; it is by far the largest country in South East Asia in terms of population and area. The total land area of 1.92 million sq. km (five times that of Japan and about one-quarter that of the Australian continent) is in form of more than 17.000 islands, the largest archipelago in the world, strategically located between the Indian and the Pacific oceans, which link East Asia to the Indian subcontinent, Africa, Europe and the oil-rich Middle East. Indonesia is also located in a region where burgeoning economic growth, political transformation and realignments of power place stability and security in potentially dangerous flux.

The Indonesian defence and security concept is the consolidation of the nation consisting of different ethnic groups living scattered within an archipelagic geography. It was for this reason that the Archipelagic Outlook concept was incorporated into the Armed Forces’ doctrine first in 1969 and later reaffirmed as national doctrine in 1973, which is indeed in line with the national motto of Indonesia, known as “unity in diversity”. The Archipelagic Outlook obliges the Armed Forces to defend and secure the entire archipelago; in the practice, the approach is implemented in form of territorial defence and command structure, army units are deployed across the archipelago, the Air Force has begun basing units outside the main island of Java and new naval bases to provide supports have been developed.

Within the governmental structure, the Indonesian President is the supreme commander of the Armed Forces and is assisted by the National Defence and Security Council (an advisory body and national policy think tank), the Coordinating Minister for Defence and Security (responsible not only for the Defence and Security department, but also for routine coordination between the departments of Information, Home Affairs and Justice), the Minister for Defence and Security (executive role) and lastly the Commander-in-Chief of the Armed Forces (ex-officio member of cabinet, directly responsible to the President for the employment of the Armed Forces in support of the national strategic objectives).

The annual state budget allocates budgets for each and every department, including the defence and security department. No matter what policy or plans have been laid down, the realisation of such plans depends on allocation within the annual state budget. Historically, the official defence and security budget since 1980 has been less than 3% of GNP and less than 10% of the total government expenditures. For the current state budget of 2002, the defence and security budget is allocated at totally some Rp. 3.4 trillion ( 7.2%) out of total state budget of Rp. 47.1 trillion. This trend seems to further be continued for some time, unless there are dramatic changes in the defence and security outlook.

The present government puts clear priorities for the economic development rather than any other intention and the question remains to answer is whether or not the allocations are sufficient to achieve the plans and goals set without substantial increases in capital outlays and economic growth in the years to come. The Armed Forces actual defence and security spending is in fact difficult to determine and measure, simply because it does not include special allocations to some large capital projects or services provided, profits from Armed Forces-owned business enterprises or contributions from companies and business communities. Examples and cases in the past have shown that the official defence budget is only a starting point for assessing actual defence expenditure.

In the current national plan (1994-2019), objectives and plans are laid down in order to consolidate and improve the quality and effectiveness of the Armed Forces. Among others are development within the Army of a three-division strategic strike force (so-called KOSTRAD), establishment of one combat brigade of three infantry battalions and supporting arms in several military area commands as well as augmentation of military reserves. The Navy plans a small increase in the number of combat vessels but emphasis will be more on the replacement und upgrading of the current fleet. The Air Force will consolidate its existing 20 operational squadrons and air defence system. The police force, now fully separated from the Armed Forces, will attain a better police to population ratio, which currently stands at 1 to 1.750 as compared to for instance 1 to 400 in Japan. In details, the future military defence requirements would include the following list of equipments and instruments:

communications and intelligence networks (including early radar warning systems)
air and maritime defence and surveillance systems
coastal defence
support systems and logistics
medium-lift helicopters
flight training simulators
air defence missile systems
advance fighter aircrafts
replacement and upgrading of ageing air/sea transport fleets.

The domestic defence and security industry has so far supplied defence requirements, either by private manufacturers or by state-owned “strategic industries”. The private sectors provides pretty much the Armed Forces’ daily needs, ranging from uniforms, boots and other outfits to building materials, infra structures and vehicles. The strategic industries are more a central for development of skills and expertise, which are necessary for Indonesia to compete in advanced industrial manufacturing. Some of these industries provide defence requirements or have the potential to provide them in the future; the manufacturing of a range of defence products is arranged either under licence, joint production or assembly agreements.

PT PINDAD, a former Army factory, supplies mostly small arms and ammunition, PT PAL, a former naval shipyard, supplies patrol boats up to a certain length only and the aircraft manufacturer PT DIRGANTARA INDONESIA (formerly known as IPTN) assembles helicopters and small passenger aircrafts under licence from Spain. The Armed Forces have however expressed dissatisfaction with the cost-competitiveness and appropriateness of some of the products supplied by the strategic industries, who are heavily subsidized and protected by the former government. Only the time will tell and reveal whether or not the investments made so far have been worth-while in building advanced industrial manufacturing base. The present government has already taken the necessary steps to evaluate and restructure these strategic industries, most of which will eventually be privatised.

Armed Forces’ acquisitions and purchases are first of all to be approved by the National Development Planning Board (BAPPENAS) and the Ministry of Finance before being further processed by the respective units within the Armed Forces (e.g. Army, Navy and Air Force). Furthermore, the Board of Study and Implementation of Technology may give advise on major military purchases and is generally interested in offset possibilities and transfer of technology. Requirements are then undergoing a bidding process and suppliers are requested to submit business offer and proposal. The guidance for procurements of goods and services is laid out in the Presidential Decree no. 18/2000 entitled “ Guidance for Procurement of Goods and Services by Government Institutions”.

Doing business with the Indonesian defence and security department requires the involvement of a local legal entity as an agent or representative. This legal entity (often owned or run by retired military officials) must be a member of and registered with the Association of the Military and Defence Suppliers (ASPERDIA-HANKAM), who will provide knowledge of local business practices, arrange meetings with project officers within the respective ministry, promote and demonstrate defence equipments and products on behalf of the manufacturers, in addition to access to the military procurement offices of the ministry. Manufacturers and their respective representatives should also be prepared to deal with the possibilities of an offset deal or other industrial benefits and most important, to address and present attractive financial or funding schemes to finance the procurement, especially in view of the current, very tight financial resources of the Indonesian state budget. The Indonesian government has stated that all financing for procurements by the government institutions must be in the form of “soft loans”, which among others is possible to get by through a combination of attractive financing and pricing or offsets.

The latest significant acquisitions for the defence were back in mid 1990’s with the purchases of the modern F-16 Fighting Falcons from the USA and a navy fleet from the former German Democratic Republic (GDR). Since then, no further significant acquisitions or purchases of the Armed Forces have been registered or taken place, especially since the economic and financial crisis hit Indonesia in mid 1997; in addition to this situation, weapon embargo was imposed on Indonesia by the USA and Great Britain since 1998 and is still effective until today, although negotiations between the governments to lift this embargo have been underway. Badly hit is especially the Air Force due to shortage of crucial spare parts and components for the sophisticated F-16 Fighting Falcons, Hercules C-16 Transporter as well as for the Hawk aircraft fighters from Great Britain.

Suppliers of the various defence equipments and instruments are mostly from the USA, Western European countries, particularly Germany, France, Sweden, Great Britain, whereby explosives and ammunition are being supplied by many countries, including the Far Eastern countries such as Japan and Korea. Brazil has some involvements in the supply of small fire arms such as revolvers or pistols. There are no restrictions with regard to supply possibilities from any country of origin as long as the specific requirements and guidelines to conduct business with the Indonesian Armed Forces are met.

WORLD SOFTWARE COMPANY PLANS TO INVEST IN INDONESIA

2006-05-08T14:30:00.000+07:00

The Jakarta Post -- 4 May 2006

Statistical Analysis System (SAS) Institute Inc, one of the world's largest private software companies, plans to invest US$2 million in Indonesia in the coming three years.

Chief operating officer for Indonesia, Erwin Chan, said Wednesday that the company, which focuses on providing integrated business intelligence software, planned to put the money into infrastructure to support its services and the development of its human resources here.

"Our main strategy for the future in this country is to have a direct presence by investing more, including the opening of a Jakarta office, as well as the doubling of the number of our employees," Chan said.

Over the last 10 years the company has been monitoring its operations in Indonesia from its branch office in Singapore.

He added that the company would also expand its business through strategic partnerships to serve its customers, mostly from the financial sector, better by providing them with integrated business intelligence software that enables them to rapidly integrate data from branch offices.

The software can simplify company information processes as it uses a single application, Chan said.

SAS's major customers in Indonesia include Citibank, HSBC, BNI, Bank Mandiri and PT Telkom Indonesia.

"So far, the financial sector has been contributing 40 percent to our growth," he said. "We still expect it to be the main contributor followed by other sectors, such as telecommunications, commerce and the government."

He explained that Indonesia was displaying a better economic performance in both the public and private sectors.

The country was also consolidating and restructuring its banking and telecommunications industries, Chan added.

Executive director for Asia Pacific field strategy and support division, Andrew Quek, said that Asia-Pacific contributed about $170 million, or 10 percent, to the company's total revenues of $1.68 billion in 2005.

"This figure was 15 percent higher than the amount we obtained in previous year in the region," he said.

The U.S.-based company, established in 1976, has 356 branch offices around the world, including 21 in Asia-Pacific, and boasts subscribers in more than 110 countries.

THE INDONESIAN MARKET FOR BUSSES

2006-05-03T15:38:00.000+07:00

The Indonesian automotive market is divided into two main categories, e.g. commercial cars and passenger cars or sedan. In the commercial car category, busses and trucks are grouped into category II for light trucks and busses (for gross vehicle weight of 5-10 tons) and category III for trucks and busses (for gross vehicle weight of 10-24 tons). The Indonesian automotive industry, after 3 decades since its beginning in the early 70’s, is still a typical assembling industry rather than a full manufacturing activity; for trucks and busses, chassis and motor are still imported, whereas the body and other automotive parts and components are already domestically manufactured. The government deregulated the automotive industry completely in June, 1999 and opened-up the domestic market among others also for direct imports of built-up cars for all types and classes. In the case of busses, however, the vehicles are up till now still assembled domestically and none has so far, for obvious reasons, been imported in completely built-up condition.

The market in Indonesia for trucks/busses is dominated by two makes, e.g. Japan and Germany. Japan is represented with brands such as Hino, Mitsubishi, Nissan and Germany has Mercedes Benz; the dominant players are Mitsubishi and Mercedes Benz in the light truck/bus category II and Hino and Mercedes Benz in the truck/bus category III.

It is quite obvious from the above numbers that the market for such commercial vehicles is yet to grow and develop; a total market share of only 13.6% for such commercial cars of category II and III still allows room for growth and expansion and considering the market potential in Indonesia with 210 million people, the 4th largest most populous country in the world, and scattered in over more than 13.000 islands, land transportation is somewhat crucial and essential to the population. Not only the expected economic recovery but also the necessary replacement and revitalization of existing and already ageing fleets of busses being the major means of land transportation vehicle will consequently create a growing demand for busses in not too distant future.

Currently, Indonesia does not provide any preferential tariff for the importation of automotive products in general; the import tariff structures in general, follow and adopt the rules generally applied by the World Trade Organization (WTO) and as a general rule, the following tariff structure may be applicable:

- Import Duty: percentages of import duty may vary between 0% and 40% depending on the types or kinds of goods imported
- Sales Tax/VAT: either 0% or 10%
- Sales Tax on Luxury Goods: either 10% or 30% depending on the types or kinds of goods imported.

PROVIDENT FUNDS IN INDONESIA

2006-05-03T15:06:00.000+07:00

The existence of provident funds in Indonesia is far from satisfactory; following the conception and nature of provident funds, only one program so far exists, e.g. JAMSOSTEK (translated: Employees’ Social Security Program) besides pension funds, which shall further be elaborated below.

1. PENSION FUNDS
Pension funds in Indonesia started in the early 70’s with the Ministry of Finance, Directorate General of Financial Institution, Directorate of Pension Funds functioning as the supervisory body. Pension’s funds are managed by trustees in form of legal entities, mostly in form of a foundation. Typical characteristic for pension funds is that the participation is voluntary. By the end of the year 2001 there are 335 pension funds legal entities providing two pension programs, e.g. defined benefit and defined contribution programs, out of which the defined benefit program is the dominant program, provided by 271 pension funds trustees or institutions. More than 1.5 million employees are participating in pension funds programs and the total net asset value of pension funds at the end of 2001 is exceeding Rp. 35 trillion. Depending on the program, contribution from the participants is ranging from 4.04% to 26.68% from the pension or retirement income.

Pension funds covering civil servants and military personnel are managed separately and are not included in the pension funds schemes mentioned above.

2. JAMSOSTEK
Introduced since the mid of 70’s, JAMSOSTEK is a compulsory employees’ social security program, which meanwhile has become more popular than other existing pension or retirement programs. Participating conditions as well as benefits are simple and more attractive.

The conception of JAMSOSTEK is to provide basic security and protection to the employees against social-economic risks caused by accident, sickness, disability, retirement and death. The program was originally introduced as ASTEK (Employees’ Insurance) back in the middle of 70’s and through Law no. 3 of the year 1992, JAMSOSTEK as a compulsory social security program was introduced. The operational enforcement was regulated by Government Regulation no. 14 of the year 1993, Presidential Decree no. 22 of 1993 and Decree of the Minister of Manpower no. 5 of 1993. The programs cover work accident, retirement, death and health care security program.

PT JAMSOSTEK, a state-owned business enterprise is commissioned to implement and manage the program and the participants are every legal entity either with a minimum number of 10 employees or paying total monthly salaries or wages of no less than Rp. 1 million; the contribution is payable every 15th of the respective month. Contribution is regulated as follows:

The contribution is calculated based on percentage from total monthly income of the respective employee except for the health care program, where the calculation for the contribution is based on a maximum monthly income ceiling of Rp. 1 million; income exceeding this amount is considered as the maximum income ceiling of Rp. 1 million.

In the course of 2002, more than 21 million employees from more than 106.000 legal entities are active participants of this program and total assets are worth some Rp. 20 trillion. Compensation paid out to participants during 2002 amounted to more than Rp. 1.5 trillion with retirement program being the dominant program with more than Rp. 1.26 trillion in compensation.

US$1 BILLION INVESTMENT FROM RUSSIA

2006-05-02T16:19:00.000+07:00

Tempo Interactive -- 1 May 2006

TEMPO Interactive, Jakarta: Indonesia targeted trade and investment volume with Russia to reach US$1 billion up until 2008. Indonesian Ambassador to Russia, Susanto Pudjomartono, last weekend said up to now, the volume of Indonesian trade with Russia is still low. To increase potential cooperation and investment, both countries agree to create a trading house as a means of information exchange.

The volume of trade between Indonesia and Russia is increased in 2004. The trade volume in 2004, amounting to US$360 million, rose to US$500 million in 2005. However, this number is still far below the trade volume of Russia with other ASEAN countries, such as Vietnam, Malaysia, and Thailand, which are above US$600 million on average. Russia has not been included in the top five countries investing in Indonesia.

According to Susanto, one of the obstacles in trade relations between Indonesia and Russia is the matter of payment. Russia is not accustomed to the letter of credit payment system from Indonesia. However, Russia has the potential to invest due to a large reserve of foreign exchange. “Their reserve on foreign exchange reached US$300 to US$400 million,” he said.

NEW RULE ARMS PROCUREMENT

2006-05-02T16:17:00.000+07:00

The Jakarta Post, Jakarta

The government plans to enact new policies to minimize corruption in arms deals, an official says.

Defense Ministry secretary-general Lt. Gen. Safrie Sjamsuddin said the 2000 Defense Law and the 2004 Indonesian Military Law regulated weapons procurements by giving the Defense Ministry the sole authority to coordinate purchases with Indonesian Military (TNI) Headquarters, the Army, Air Force and Navy.

The government later issued a presidential decree in 2003 to enforce the two laws.

"We are now campaigning for two new ministerial decrees (to be) issued by the defense minister to ensure transparency in arms procurements both in the Defense Ministry and in the military," Safrie told The Jakarta Post recently.

Ministerial Decree No. 01/2004 regulates the supply of goods and services to the ministry and the TNI through the export credit facility, while Ministerial Decree No. 15 regulates all goods and services bought through other channels. The two decrees require transparency and accountability in arms procurements. All are required to be conducted in public tenders and military chiefs of staff are barred from any involvement.

Safrie said the ministry had adopted a "one-door" system.

However, he said it was proving "impossible and ineffective for us to purchase all spare parts and non-lethal weapons needed by all the forces. The ministry, the TNI Headquarters and forces, therefore, would continue to "have their own lists of private companies who are partners in arms procurements," he said.

The decrees require all arms tenders to be offered to the public. However, in the past most military procurement projects have been won by supplier companies linked to retired military officials or their families.

Safrie said the government had centralized the management of arms procurements because of the Defense Ministry's limited budget.

"We have adopted a one-door policy in arms procurements however, all forces and the TNI Headquarters are still allowed to be involved in procurements and are allowed to buy certain military equipment they need," he said.

Ideally, the Defense Ministry needed funding of around Rp 58 trillion this year but the government had provided it with only half that amount, he said.

This meant the ministry was mostly focused "on routine expenditure to pay servicemen and civilian staff and to finance core military operations," he said.

The country's defense budget -- at only 1.1 percent of the gross domestic product -- was the lowest in Southeast Asia, "Malaysia and Singapore have allocated around 4 percent of their GDP for defense."

Because of the limited defense budget, Indonesia had several times bought weapons, including Russian-made Sukhoi jets and Mi-17 helicopters, under government-to-government export credit facilities, he said.

Separately, ministry director general of arms procurement Rear Admiral Pieter Wattimena said the ministry would follow the directions in two ministerial decrees to clean up future arms deals.

"The supply of weapons, spare parts and other materials will be conducted under the ministry's coordination, and chiefs of staff and other officials in all the forces will no longer be allowed to be involved. We will no longer purchase military equipment at the behest of willing partner companies," he told Detik.com here recently.

"All tenders will offered to the public. The direct appointment of partner companies will only be allowed in emergency cases and for certain spare parts," he said.

NEW RAILROAD TRACK WILL BE BUILD

2006-04-28T09:55:00.000+07:00

The Jakarta Post, Jakarta

The government is planning a major rail and expressway building program to link industrial zones located near Jakarta to ports and airports so as to increase the attractiveness of the zones to investors.

Director of Turnpikes and Urban Affairs at the Public Works Ministry, Nurdin Manurung, said in Jakarta on Wednesday that the government would build a Rp 2.36 trillion (US$253 billion) highway linking industrial areas in Cikarang, West Java, to Tanjung Priok harbor in North Jakarta. It was expected that the new expressway would be completed in 2009.

He said that in addition, the government would also build an expressway connecting Cikampek in West Java with the Jagorawi (Jakarta-Bogor-Ciawi) turnpike at Cileungsi, the Tanjung Priok Access Highway linking the proposed Cikarang-Tanjung Priok highway with the Jakarta inner ring road at Sunter, North Jakarta, and a flyover at Cikarang.

"These projects will cost Rp 7.5 trillion in total and will be completed between 2008 and 2011," he explained.

He said that they were designed to provide the sort of transportation infrastructure that was needed to allow industry to grow.

The latest figures for February show that the vehicle-to-capacity ratio on the Jakarta-Cikarang route stood at 1.36 and Cikarang-Cikampek route at 1.16, compared to the accepted tolerable ratio of 0.6.

Nurdin acknowledged that the congestion was also caused by imbalances in the utilization of transportation modes as 90 percent of freight was transported by motor vehicles, while railway and sea transportation had yet to be used as much as it could.

At the present time, Indonesia has 6,482 kilometers of railway track in place in Java and Sumatra. Of this figure, 2,122 kilometers are disused.

Expert advisor at the Transportation Ministry, Cucuk Suryo Suprojo, said that in order to deal with the congestion problem, the government would also promote the use of railways to support industrial development by building new lines and reopening disused lines linking industrial zones with ports and airports.

"A 30.3-kilometer rail line linking an industrial zone in Tangerang with Soekarno-Hatta Airport will be built between 2007 and 2008 at a cost Rp 490 million," he said.

Meanwhile, a senior official at the Directorate General of Railways, Sugiadi Waluyo, said that a 2.5 kilometer line connecting Pasoso station and Tanjung Priok harbor, which was closed in 1967, would be reopened.

"Because of the closure, traders have to pay additional costs for loading and unloading, as well as transportation by truck, after their freight arrives at Pasoso station," Sugiadi said. "If we reopen the line, their costs will be reduced as their freight will be delivered directly to the port."

"I hope that the project will start next year with the involvement of private sector investors," he said.

He added that the government also planned to build a number of container terminals and freight yards in industrial zones in West Java, such as Gedebage in Bandung, Cibungur in Purwakarta and Cikarang.

Indonesian Industrial Estate Association chairman Johannes Archiadi responded positively to the plan.

"I think that rail is the most efficient and effective way of overcoming the transportation problems faced by industrial zones," he said. "The construction of railway infrastructure costs less than building highways and the operation of trains is cheaper than trucks."

Johannes expressed the hope that private sector investors would participate in the development of the railway infrastructure so badly needed by industry.

ETERINDO BUILD NEW BIO-DIESEL PLANT

2006-04-28T09:42:00.000+07:00

TEMPO Interactive, Jakarta:

PT Eterindo Wahanatama will start producing biodiesel for fuel mixing.

“The product will be produced by one of our affiliated companies, PT Anugerahinti Gemanusa in Gresik,” said Yudianto Kosman, an Eterindo Director.

According to Yudianto, the entry of a company into the biodiesel industry is one of the efforts to improve the company's performance.

This step is also in anticipation of Pertamina's plan to sell biodiesel as a mix for environmental friendly automotive diesel oil.

This chemical producer is exploring cooperation with Pertamina to provide biodiesel at the gas stations.

COMPANY DETAIL:

PT. ETERINDO WAHANATAMA
Menara BTN Building, 15th Floor
Jl. Gajah Mada No. 1, Jakarta Pusat 10130, INDONESIA
TEL: +62-21-6332622
FAX: +62-21-6342635
Website: http://www.eterindo.com

FINISHED LEATHER MARKET IN INDONESIA

2006-04-26T11:43:00.000+07:00

The Indonesian leather industry plays an important role in the country’s economy. The industry is among the ten largest export earning industries within the so-called non-oil and gas sector; it is a labor-intensive undertaking as the majority of the processing and manufacturing industries consists of medium and small-scale industries. The leather processing industry consists of leather tanning industry and the leather manufacturing industry, producing various finished leather articles such as footwear, bags, suitcases, belts, gloves and apparels.

The development of the Indonesian leather industry, however, has shown a downward trend especially during the period of 1996 to 2002. Up until the year 1996, the industry flourished due to a government regulation prohibiting the exports of raw leather. The total export value of processed leather and finished leather articles in 1996 was in excess of US$ 2.2 billion as compared to US$ 1.1 billion in 2002. The export ban was lifted in 1998 as part of an agreement signed with the IMF to deregulate the international trade sector, causing thereby a decline in the exports of semi-finished and finished leather articles as a result of shortage of domestic raw material supply in the subsequent years. Suppliers of raw leather prefer to export their product of raw leather rather than selling to the domestic leather processors or manufacturers. The production situation became even worse due to the fact that the leather raw material needed by the tanning industry of some 70.000 tons can only be supplied domestically at a level of less than 50%, e.g. around 31.000 tons, out of which, approximately 70% of this output is being exported and the balance sold to the domestic manufacturers. This condition has forced many leather manufacturers of finished leather articles to change the raw material from raw leather to plastic or imitation leather.

The current situation with the Indonesian leather processing industry is that there is a shortage in the supply of raw leather due to the raw leather material being exported. The leather manufacturers are faced with the choice of either closing down their factories or using substitute materials such as plastic or imitation leather with the latter being mostly the better choice for the industry. The exports of finished leather articles logically also decline as a result of the raw material supply shortage. On the other hand, a potential domestic market for finished leather articles is not being given enough attention to and demand for such finished leather articles is to a certain extent being fulfilled by imported articles. To be added to this is the fact that Indonesian leather manufacturers are still facing the obstacle of appropriate product design as well as production method, technology and know-how. The majority of the Indonesian finished leather manufacturers are small-scale industries, more of a type of cottage, home industries with limited resources on capital, market and product design. Unless the government re-considers its trade policies and provides assistance to and in favor of the domestic leather industry, the current condition will not be supportive to the future development of this labor-intensive and export-oriented industry.

The future of this particular industrial sector, however, may be looking bright especially when considering the potential raw material availability as well as a vast domestic market. What the industry needs is supportive government regulation to protect domestic supply of raw materials and at the same time provision for improvements in various production aspects. Only by doing so will the industry be capable of competing not only in the international market but also fulfilling the potential domestic market demand.

INDONESIA PLAN TO BUILD ANOTHER OIL REFINERY

2006-04-25T11:21:00.000+07:00

PT Pertamina, State-owned oil company and Saudi Aramco, a Saudi Arabian oil company, will cooperate in building a refinery in Indonesia.

According to Pertamina's Managing Director, Ari Sumarsono, in addition to Saudi Aramco, several other Middle Eastern countries are interested in investing in Indonesia.

Earlier, Ari explained that the refinery to be built will have a capacity of 250,000 barrels per day. Construction will be prioritized for the Tuban Refinery, East Java.

Pertamina's Vice Managing Director, Iin Arifin, is currently visiting several Middle Eastern countries such as Saudi Arabia, Kuwait, Dubai, and Qatar, to look for cooperation opportunities in building refineries in Indonesia.

US$10 MILLION FOR INDONESIA

2006-04-19T11:35:00.000+07:00

TEMPO Interactive, Jakarta: The government estimated that Indonesia requires a US$5-10 million (RP90 billion) investment to accelerate the investment growth in Indonesia's outer islands.

According to the Maritime Affairs and Fisheries Minister Freddy Numberi, this investment is for building the facilities and infrastructure in the outer islands which benefit Indonesia's tourism. The investment can be from domestic and foreign investors. “But this number is still a broad outline,” Freddy told the press, Monday (17/4).

He explained that by building the facilities and infrastructure, the respective central and regional governments will benefit, because so far the outer islands have not been reached by the central government. For example, there are islands whose ownership are lost, such as Sipadan Island and Ligitan Island which Malaysia claims are hers.

There are also islands that are not supervised such as Bidadari, West Flores, East Nusa Tenggara Islands, which are managed by foreign parties. “What we are worried about are the islands in Marore and Miangas, North Sulawesi, because there are only 20 thousand residents and many of them have moved to the Philippines.”

Currently Indonesia has 17,499 outer islands. From that number, only 7,349 islands have been named, and 67 islands directly border neighboring countries.

To support the investment, Freddy said, the government will give a tax holiday for 2-3 years. Besides that, during the permit process, the regional government will not be allowed to collect any tax or fees.

INDONESIAN ELECTRICITY PLAN TO USE CBM

2006-04-19T11:23:00.000+07:00

Jakarta (ANTARA News) - State electricity company PT PLN is ready to use coal bed methane (CBM) gas as a replacement for fuel oil which is used by diesel-generated power plant, PLN`s Energi Primer deputy director Tonny Agus Marwoto said here Tuesday.

"We are ready to use CDM gas if is developed well," he said on the sidelines of a conference on CDM Development in Indonesia.

Tonny said based on reports tabled during the conference, CBM gas will be produced in the next three years at the fastest.

Accordingly, PLN needs a year to change its equipment to use CBM gas instead of fuel oil, he said adding that the state electricity firm will be capable of saving money if it uses CBM gas to produce power.

Tonny said CBM is found in many areas in Indonesian islands such as in Kalimantan, Sumatra, and West Java so that the country will no longer face the shortage of electricity and fertilizers in the future if PLN is capable of taking advantage to produce power using the coal bed methane.

Some domestic and foreign companies have begun interesting to study the CBM gas, Tonny said.

The CBM gas began to be exploited and mass produced by major companies in Australia and the United States in 1980s.China, which has vast coal deposit has already begun to develop CBM.A research which was jointly conducted by state oil and gas company PT Pertamina and PT Caltex Pacific Indonesia (Chevron) in 2001 found Indonesia deposited about 337 trillion cubic feet of CBM in many areas in the country -- making the country the world?s seven largest CBM depositor. (*)

LKBN ANTARA Copyright © 2005

INDONESIA PLAN TO USE BIODIESEL

2006-04-19T11:18:00.000+07:00

Batam (ANTARA News) - Minister of Energy and Mineral Resources Purnomo Yusgiantoro said here on Friday he hoped several regions in Indonesia would be able to start producing biodiesel fuel from castor kernel as an alternative fossil fuel next year.

Hopefully commercial production of biodiesel fuel could begin next year as a long-term profitable business potential, he said.

Castor planting technology has already been developed in the regions which have the potential for castor plantation development.

He said the government and the people already started raising castor plants to produce biodiesel to reduce dependency on conventional fuels.

He said the government planned to build a castor oil industry if castor plantations had been developed in a large scale.

"Not only castor, oilpalm kernel can also be used to produce biodiesel," he said.(*)

LKBN ANTARA Copyright © 2005

INCOMING INDONESIAN TRADE SHOW FOR 2006

2006-04-18T15:02:00.000+07:00

THE NATIONAL MERCHANDISE AND COMODITY SHOW 2006
Date: October 2006
Place: Jakarta Fairground, Kemayoran
Jakarta, INDONESIA
Organizer: National Agency for Export Development
Ministry of Trade Republic of Indonesia
Address: BPEN Building, Jl. Kramat Raya No. 172
Jakarta Pusat 10430, INDONESIA
Telp: (62 -21) 3100569
Fax: (62 -21) 31904914
Email:nafed@nafed.go.id
Website: http://www.nafed.go.id/

MANUFACTURING INDONESIA SERIES 2005
Date: 7 – 10 December 2005
Place: Jakarta International Expo, Kemayoran
Jakarta, INDONESIA
Organizer: PT. Pamerindo Buana Abadi
Address: Deutsche Bank Building, 13^th floor
Jl. Imam Bonjol No. 80
Jakarta Pusat 10310, INDONESIA
Telp: (62 -21) 3162001
Fax: (62 -21) 3161981
Email: promotions@pamerindo.com
Website: http://www.pamerindo.com/

The development of the industrial estate continued till 2007

2006-04-18T14:05:00.000+07:00

Benjamin M. Lamberte, the senior Consultant Coldwell Banker Commercial Indonesia suggested that through to quarterly III 2005 occupancy rates (physical occupancy) the industrial region (KI) in Jakarta, Bogor, Depok, Tangerang and Bekasi (Jabodetabek) was not yet maximal or around 65,7%, but the KI development will continue till 2007.
According to David Cheadle, Chief Executive Officer PT Procon Beautiful, the shortage of the absorption because of the property investor more was interested developing the office complex, ritel and the dwelling.
Whereas according to Benjamin the condition was caused the infrastructure in an amount of KI did not yet support and must be straightened out became better.
The new region opening and the development of the available region were still being carried out by the developer and the investor, because of being estimated when the infrastructure improved the region will be full and till the next three years was estimated improved around 655 ha., with the data as follows:

Milenium Industrial Estate
Location: Tangerang, Banten
Size: 40 ha.
Realitation: 2006

JABABEKA Phase3
Location: Bekasi, West Java
Size: 100 ha.
Realitation: 2006

Delta Mas Industrial Estate
Location: Bekasi, West Java
Size: 250 ha.
Realitation: 2006

Bukit Indah Extention
Location: Kerawang, West Java
Size: 265 ha.
Realitation: 2006

Moreover after one stagnant semester, to quarterly Ii 2005 happened the increase 30 ha by Millenium IE in Tigaraksa, 65 ha in Bekasi the IE Dawn and 80 ha in Modern Cikande was finished quarterly I in 2006.

(the source: the Indonesian business, on November 18.2005, T4)

IRON AND STEEL PRODUCT MARKET

2006-03-27T16:39:00.000+07:00

Considered a vital industry to the country’s economy, the steel industry in Indonesia developed rapidly during the last 3 decades, a period of time, during which Indonesia experienced and enjoyed economic growth rates way above average. The economic and financial crisis, however, that hit the country since 1997/1998 dealt almost all industry a heavy set back; with no exception, the steel industry also suffered heavy losses following the collapse of the construction sector and drastic production decrease in the automotive industry, pillar industries also, that are crucial in determining the pace of a country’s economic growth and development. Overall economic and financial improvements expected for 2000/2001 have not taken place, causing sluggish demand for steel products. Only since 2002 has the situation on the domestic market slowly improved, especially with the building and construction sector as well as the automotive sector showing clear tendency of recovery.

The development of commercially large-scale iron and steel industry in Indonesia began at the late 60’s early 70’s with the construction and completion of PT Krakatau Steel, the first integrated iron and steel manufacturing plant, built with the technology and financial assistance from Germany and this government-owned enterprise remains until today the largest, integrated iron and steel manufacturing plant in Indonesia and at the same time also functions as the country’s steel industry barometer. The policy of the Indonesian government to open the door to foreign investors to boost the economic and industrial development at the beginning of the 70’s gave reason to investors to fund priority sectors such as the building and construction, infrastructure projects, mining and energy. Subsequently, respective steel manufacturing industries were also developed along the way with the establishment of the first steel pipe factories and steel structure plants.

Large occurrence and extensive exploration of oil and gas began since early 70’s and the oil and gas exploration and distribution remain until today the largest customer for the steel industry in Indonesia. The economic and financial crisis that hit Indonesia does not seem to have affected this particular industry sector negatively due the typical characteristics of oil being a world commodity. Overall current world political condition has even positively influenced the oil and gas production in Indonesia aiming at higher production output. Natural gas is another potential demand for future source of energy, whereby gas pipeline construction works are currently underway, not only within Indonesia but also connecting gas-producing areas with the neighboring countries such as Singapore and Vietnam. For the near future, the oil and gas industry will remain one of Indonesia’s pillar industries.

The Indonesian automotive industry revived distinctively since the year 2000 with total sales exceeding the sales figures of the previous years. Sales of cars and especially motorcycles are expected to further increase for the following years due to improved domestic financial market and the consumer’s purchasing power.

Another promising sector, the construction sector, is sluggish following uncertain current domestic political and security conditions. In 2002, however, overall condition improved and the construction sector clearly revived. The government-related projects such as infra structure projects (clean water, electricity) will for the time being remain slow due to tight government budget.

The weak iron and steel world market and the decreased sales in major iron and steel markets such as the USA and Europe forced steel producers to turn heavily to the Asian market including Indonesia. Influx of imports with cheap prices weakened additionally the domestic iron and steel industry causing a number of iron and steel producers to close down their factories completely. Although the Indonesian iron and steel industry has been confronted with many serious problems in the last few years causing a drastic decline in production and sales performance, the industry remains optimistic as to the future development of various economic sectors, which shall contribute positively to the development of this particular manufacturing industry especially with the overall expected economic recovery by the year 2004, after which period of time Indonesia will already have completed its most important political event, e.g. the general and direct presidential election, the first time ever in the country’s political life and history.

CUTLERY MARKET

2006-03-27T16:35:00.000+07:00

Indonesia, the fourth most populous country in the world, has slowly recovered from the economic and financial crisis that hit the country since 1997. Signs of recovery have been registered with real GDP confirmed economic growth, the local currency rupiah appreciated strongly and inflation rate fallen. Overall economic and monetary conditions remain stable and within controlled parameters despite ongoing constraints to promoting higher levels of economic growth; the country plans to exit and end the IMF economic and financial rescue assistance extended since the beginning of the turmoil by the end of this year 2003.

Cutlery products such as knives, scissors, spoons, forks, skimmers and sugar tongs are products or tools, which are used practically every day and in our today’s modern life are indispensable. The consumers of cutlery products may be divided into private households and commercial establishments, such as hotels, cafés and restaurants, catering services and similar hospitality institutions. The majority of the Indonesian private households, although quite large in number (estimated in the region of around 40 million private households), are low income private households; only some 10 to 15% would be categorized as medium income households and less than 5% as high income private households. Consequently, the consumption pattern of such households is geared towards fulfillment of consumers’ basic necessities, e.g. food, clothing, housing and education. To the low income group, a cutlery product, although indispensable, is a simple tool to fulfill a certain function. The attitude would already be different in the next, higher private household categories, for which a cutlery product does not only have to fulfill a certain function, but the product must also be of a certain quality and design. Specifically for the hotels, cafés and restaurants establishments, product quality and product design are the most important and determining product elements for cutlery products to be purchased. With another word, design and quality elements are crucial for a cutlery product and this is exactly the field, in which the Indonesian cutlery manufacturers are still lacking. Cutlery products manufactured domestically for local consumption do not always fulfill the criteria.

The improvement in the overall economic condition will certainly bring a positive impact on the overall income of the private households and the consumption pattern as well and this in turn, will create a greater market demand for various products and services. The Indonesian market is, judging from its number of population, definitely a potential market, although improvements are needed to increase the purchasing power and, therefore, the disposable income of the private households. The service industries, hotels, cafés and restaurants, to a certain extent closely connected with the tourism industry, are definitely the other potential market area, which offer the absolute market opportunity for cutlery products with appropriate product quality and design.

ELECTRICITY INFRASTRUCTURE PROJECT

2006-03-23T09:59:00.000+07:00

Indonesia is now facing a serious crisis in power supply as shown by frequent blackouts in various regions outside Java-Bali Island lately. The crisis is feared to get worse in the future. To solve the problem PLN (state-owned electricity company) have to build some electricity infrastructure that worth US$139.5 billion.

PLN has planned to install 13,405 km total of transmission networks to be completed in the coming year 2005-2015, which will be installed 5,586 km in Java-Bali, and 7,820 km in other islands.

With the additional transmission networks, new sub-stations with total capacity of 28,254 MVA will be needed including 24,026 MVA in Java-Bali and 4,198 MVA in other island. An addition 121,154 km of medium voltage cables and distribution transformers with capacity of 40,326 MVA will also be needed to improve the distribution systems.

Because of The government limited financial capability, they have liberalized the electricity sector and launched privatization of sector. It has invited foreign and domestic investors to take part in the development of the sector. The invitation was extended by President Susilo Bambang Yudhoyono when addressing the Infrastructure Summit held in Jakarta.

CERAMIC TILE MARKET AND INDUSTRY

2006-03-22T14:30:00.000+07:00

The economic and financial crisis that hit Indonesia in 1998 has made the building and construction sector practically bankrupt; the majority of construction projects were stopped and the property or housing industry came to a standstill. Construction companies and property developers were either bankrupt or forced to restructure their company’s financial condition. Along with this, the supporting industry to the construction sector also suffered badly, in particular the cement industry and ceramic tile industry. Many ceramic tile factories were forced to either suspend operation or decrease the production output drastically in order to survive the peak of the crisis during 1999/2000. Although the majority of the ceramic tile producers is also exporting their products, the export market could not completely compensate or substitute the losses caused by the weak domestic demand due to a very tight competition in the international market.

Signs of economic recovery came in late 2000 early 2001 with a number of property projects such as shopping centers, hotel and apartment buildings and housing projects commencing activities. With political stability restored and confidence in the country’s new government and leaders, many buildings destroyed during the riot of 1998 were in need of repair or restoration. Additionally, the government’s commitment to subsidize the low cost housing projects gave the necessary stimulus to the revival of this important economic sector. During this period of time, the total domestic ceramic tile consumption drastically increased to a level of around 153 million square meters, a level also, which was almost the same as for the pre-crisis consumption year of 1996 159 million square meters. Parallel with this positive development, the export performance also increased significantly during the years after 2000, as can be observed later in this report. The year 2003 earmarked the complete revival of the construction sector with further increase of ceramic tile production and consumption and this upswing can be expected for the coming years. Indonesia’s ceramic tile industry is blessed with abundant availability of necessary raw materials for the production of such tiles, e.g. kaolin, clay and feldspar and secondly, cheap manpower. Actually, this industry is developing much faster compared for instance to the development of other ceramic-based industry such as tableware; the reason is that the consumers nowadays will basically only use ceramic tiles to cover the floor of their homes rather than the cheaper and less attractive-looking cement flooring, a behavior change due to improved living standard and better income as well as purchasing power. This attitude is not only specifically referred to the urban population but also to the rural population. Indeed, the Indonesian ceramic tile industry is dominated by the production of ceramic floor and wall tiles, where these tiles are produced in standard sizes mostly ranging from 200 mm to 900 mm square or rectangular shape, glazed and unglazed ceramic surface, plain and textured designs as well as in various solid color finishes. Not only the domestically produced ceramic tiles are competing for customers, the imported ones also play a significant role and specifically marbles and granites for higher quality level of shopping centers, offices, apartment buildings and housing projects, since the marble quality available in the country is of less better quality, whereas granite is fully imported.

When comparing to the other, neighboring countries in the South East Asian region, Indonesia has currently the lowest per capita ceramic tile consumption of less than 1 square meter against 4 square meter in Thailand and 7 square meters in Malaysia; the market prospect, therefore, despite the low consumption figure, looks good for the future with the expected economic stability and growth and the increase in income and purchasing power of this 4th most populous country in the world. Room for future increase of consumption is definitely available.

Prior to the economic crisis in 1998, Indonesia registered nearly 50 ceramic tiles manufacturers and currently not more than 25 manufacturers are still in production with a total annual installed production capacity in excess of 160 million square meters. This capacity level makes Indonesia the 5th largest manufacturers of ceramic tiles in the world after People’s Republic of China, Italy, Spain and Brazil.

LINK EXCHANGE [2]

2006-03-22T14:03:00.000+07:00

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Magazine Racks Online Store
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Swan Figurines Online Store
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Windchimes & Other Treasures
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Earrings & Other Treasures
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Mexican Decor
Our Mexican decor make the perfect home accents for any room with a Spanish decorative theme. The bright colors of chili peppers and gracious sentiments are common in the merchandise of our Mexican decor collection. They also make great gift ideas.
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Our candle chandeliers will help you drench your home with a mood setting, romantic candlelight. Our discount priced candle chandeliers include shabby elegance, wrought iron, acrylic drops, and leather styles. They also make great gift ideas.
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Our clocks would grace any wall, desktop, or mantle. Our huge selection of discount priced clocks are articulately crafted and uniquely designed. Our decorative clocks include antique look clocks, desktop clocks, kitchen clocks, wall clocks and more.
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Our holy crosses are not only great inspirational works that proudly show your faith, but are gorgeous home accents too. Our wide selection of discount priced holy crosses are designed with intricate detailing to become great faith inspired creations.
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Shop Online For Gifts For Boys
Our gifts for boys is a collection of unique gift ideas for that special young man on your shopping list. We have many great discount priced gifts for boys to choose from, so finding a gift that he'll always enjoy and never forget is a snap.
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Country Home Decor Online Store
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Wedding Gifts & Other Treasures
Our wedding gifts provide you with our best wedding gift ideas including fairy tale photo frames, extravagant accents, gorgeous goblets laden with radiant beads and elegant figurines that capture the essence of a newly married couple's love.
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We carry a large selection of decorative lawn ornaments at discount prices. Look no further if you would like to find lawn ornaments for your yard and garden that are both exquisitely designed, yet affordable.
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We carry a large selection of decorative lawn ornaments at discount prices. Look no further if you would like to find lawn ornaments for your yard and garden that are both exquisitely designed, yet affordable.
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Our gifts for dad are a great collection of unique gift ideas for dad for Father's Day, his birthday, or just to show him how much you care. Our discount priced gifts for dad include accessories for his desk and decor for his office or den, and more.
Mothers Day Gifts & Other Treasures
Our Mother's Day Gifts will give you the opportuniity to express your feelings and emotions that are often understated, but never forgotten. Show mom how much you care by giving her a unique gift of love from our online store this Mother's Day.
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Our southwest decor is filled with home accent pieces that are reminiscent of the Southwestern America desert and the Native American art of the region. Our discount priced southwest decor is intricately crafted and uniquely designed by the artisan.
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Our jewelry allows you to accessorize without breaking your bank account. You're sure to find something that will make a perfect addition to your jewelry collection. We carry discount priced jewelry such as watches, rings, earrings, and bracelets.
Giraffe Figurines
Our giraffe figurines will bring the energy of the serengeti into your home. Tall and elegant, these giraffe figurines will make for a unique home accent for your shelf, bookcase, or desk. We carry a wide selection of discount priced giraffe decor.
Bargain Priced Wall Clocks
The wall clock store offers a large variety of wall clocks ranging from wooden pendulum clocks to kitchen clocks. Their everyday low discount prices simply can't be beat.
Online Shopping for Curio Cabinets
Our curio cabinets will hold all of your treasures, trinkets, collectibles and figurines with elegant style. These elegantly proportioned curio cabinets will graciously accent your favorite room. They are available to you at our low discount prices.
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Our candleholders range from classical to contemporary styles. No matter what your taste, you are sure to find something that will make a lovely addition to your home decor theme. Our superbly crafted candleholders also make great gift ideas.
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Our candle lamps will lighten up any room in your home with a warm glow. The unique designs of these finely crafted candle lamps are simply breathtaking. Our discount priced lamps would make great gift ideas or beautiful home accents.
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Our bird feeders will give your feathered friends a cozy place to eat and rest. Our bird feeders are both uniquely designed, as well as affordable. We carry a large selection of bird feeders to help make your outdoor decorating both fun and easy.
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Our bathroom shelves not only make handy storage places for bath supplies, but add a touch of elegance to the room. They also make great display areas for curios and figurines. Our everyday low discount prices make these bathroom shelves a great buy.
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Our candelabras will provide a grand display piece for your living room or den. Our ornately designed candelabras will make an enchanting addition to your home. These discount priced candelabras also make great gift ideas.
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Unique Home Furnishings at Great Prices
The home furnishings store is filled with quality merchandise that is both unique and affordable. We carry a large selection of discount priced home furnishings to make your indoor decorating both fun and easy.
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Our African decor consists of beautiful works of art, decorations and home accents based on an African design theme. These finely crafted, discount priced items will bring an aura of the African tribal culture into your home.
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Our necklaces will allow you or that special lady in your life to accessorize in style and elegance and at an affordable discount price. Our unique collection of necklaces are finely crafted and richly detailed to give the look of class and beauty.
Perpetual Calendars at Discount Prices
Our perpetual calendars make unique home accent pieces that add a touch of country style to a room. Our discount priced perpetual calendars are finely crafted and contain a clock so you're never at a loss for the date or time. Make great gift ideas.
Wind Twirlers at Bargain Prices
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Our scented candles are a great way to meet all of your aromatherapy needs by providing fresh aromatic fragrances. Our discount scented candles also make lovely decorative candles that will add an elegant touch to your home. Many scents available.
Your Best Source For Pendulum Clocks
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Fathers Day Gifts at Bargain Prices
Our Father's Day Gifts are a wonderful collection of great gift ideas for dad on his special day. We have a huge selection of discount priced Father's Day gifts to make finding the perfect gift for dad both fun and easy including tools, and more.
Shelves Online Store
Our shelves not only make a handy place to store your belongings and display pieces, but they make lovely home accents as well. We carry a wide selection of discount priced bathroom shelves, corner shelves, curio shelves, display shelves and more.
Discount Priced Southwestern Decor
Our Southwestern decor is inspired by traditional Southwest art that features the cactus, bull skulls, and Native American art including Kokopelli. These discount priced home accents are uniquely designed to bring an aura of the desert to your home.
Beach Decor & More
Our beach decor will combine a splash of sunshine with the azure waves of the ocean to bring the feel of surf and sand to your home. These discount priced home accents will add color and seaside fun to any room. Great gift ideas for the beach lover.
Beach Decor & More
Our beach decor will combine a splash of sunshine with the azure waves of the ocean to bring the feel of surf and sand to your home. These discount priced home accents will add color and seaside fun to any room. Great gift ideas for the beach lover.
Liberty Bronze Figurines & Other Treasures
Our liberty bronze figurines make lovely decorations for a living room or den. Our articulately crafted liberty bronze figurines are carved in extraordinary detail. You're sure to find something that will make a perfect addition to your home decor.
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Our teas sets are a decorative collection of teapots, creamers, and sugar bowls. Our discount priced tea sets are uniquely designed and intricately detailed to provide beautiful kitchen decor pieces to your tea time. They make great gift ideas too.
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Our Christian gifts consist of an exquisite collection of sculptures, candleholders, plaques, clocks and angels that stir the soul with grace and beauty. You can find glorious scenes of the life of Christ depicting milestones from birth to ascension.
Shop Online For Country Decor
Our country decor will bring back feelings of a more quiet time when farms were prevalent and families seemed closer. Our discount priced country decor features barns, farm animals, fruit and other nostalgic decorations and home accents.
Led Lights & Other Treasures
Our LED lights have a luminous secret. They turn into an enthralling light show as luscious colors slowly change, illuminating them from inside out. Our delicately sculpted led lights make a beautiful display. They also make for great gift ideas.
Unique Wind Chimes
The soothing sound of wind chimes can be heard around your home and garden with an exquisite and uniquely designed set of these music makers. Our wind chimes are designed to last and are available at discount prices.
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Shop Online For Kitchenware
Our kitchenware will provide your kitchen with sturdy cookware and decorative décor. Our discount kitchenware items include long-lasting and non-stick cookware, stainless steel cutlery, barbecue sets, baskets, cookie jars, and salt & pepper shakers.
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Our monkey figurines will show your guests that you're not afraid to "monkey around". Our monkeys, chimps, and chimpanzees are displayed in the classic "see no evil, hear no evil, speak no evil", with palm trees, playing cards and many other poses.
Fine Selection of Media Cabinets
Our media cabinets are elegantly designed pieces of furniture that fit beautifully in almost any entertainment area. These sturdy media cabinets will graciously hold your CD's and DVD's with style. Discount priced, but look like pieces costing more.
Your Best Source For Golf Gifts
Our golf gifts make wonderful additions to the decor of any room, office, or desk. Never miss tee time with our handsome golf clocks and decorate dad's desktop with one of our unique golf themed desk accessories. They also make great gift ideas.
Unique Home Decor
Our home decor comes in many different styles and fashions. We carry a large selection of discount priced home accents to make your interior decorating both fun and easy. Shop for home decor by item category, by theme, or by room.
Aromatherapy & Other Treasures
Our aromatherapy products will bring scents and fragrances to your home that range from sensual to energizing. Our aromatherapy products, such as incense, essential oils, and candles, are just the thing for setting moods or relieving stress.
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Our tealight holders will make a handsome home decoration while emitting an enchanting flame. Our uniquely designed and discount priced tealight holders include eagle, angel, heart shaped plaques, hurricane lanterns, and photo frame styles.
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Our frosted glass figurines will bring the elegant beauty of these precious works of art into your home. Our intricately detailed frosted glass figurines are carefully sculpted by the artisan. They also make great gift ideas for friends and family.
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Fine Selection of Christmas Lights
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Our fairy figurines will bring a storybook fantasy to life in your living room or girls bedroom. Delicately crafted and finely detailed, our winsome sprites make adorable home accents. At our everyday low discount prices, they make a great gift idea.
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Great Selection of Christmas Gifts
Our Christmas Gifts collection contains some of our best Christmas gift ideas. Our entire website is filled with finely crafted and exquisitely designed merchandise that, at our everyday low discount prices, would make great Christmas gifts.
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Our Japanese decor will bring the grace and elegance of the Orient into your home. Our Oriental themed decor and home accents are richly detailed and finely designed to help bring this culture to life in any room featuring a Japanese decor theme.
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Our floor lamps will brighten up any room and be a lovely addition to your home or office. The elegant designs of these sturdy and finely detailed floor lamps are indeed breathtaking. Our discount priced lamps would also make a great gift ideas.
Fine Selection of Birthday Gifts
Our birthday gifts are unique items that say Happy Birthday! in their own special way. If your tired of the usual birthday card, then send them a cheerful birthday gift instead to go with an item that takes into account their interests and character.
Elephant Collectibles at Bargain Prices
Our elephant collectibles and decor will add the accents of an african jungle safari to your home decor. We carry a fine selection of various elephant decor such as candle holders, clocks, and much more all available at discount prices.
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Our decorative candles make lovely home accents and stunning table centerpieces. Our discount priced decorative candles are finely crafted and uniquely designed and will look great with your home decor. They also make great gift ideas.
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Discount Priced Christmas Decorations
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Our hurricane candle holders will give your home a classical old world look and display an enchanting glow. These discount priced and ornately designed hurricane candle holders are superbly crafted by the artisan. They also make perfect gift ideas.
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Our oil bottles would make a lovely and unique addition to your kitchen decor. Our discount priced oil bottles are made from glass with a stainless steel spout. These uniquely designed decorative pieces make a welcome gift for the homemaker.
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Our wall hooks make lovely home accent pieces and can be used to hang coats, scarves, keys, towels, and other items. These discount priced wall hooks make quaint decorations for a kitchen or entryway. They also make a great gift idea.
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Our votive candle holders will enlighten your home with an enchanting glow. Our uniquely designed votive candle holders are like beautifully detailed works of art. You're sure to find that perfect discount priced votive holder you been looking for.
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