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2007-05-08T19:31:00.000-07:00

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SOUTH KOREA FIRMS IN PERTAMINA DEAL

2007-04-30T23:56:00.000-07:00

Business News - Tuesday, May 01, 2007

Ika Krismantari, The Jakarta Post, Jakarta

State-run Korea National Oil Corporation (KNOC) and SK Corp. are to sign a memorandum of understanding (MoU) Tuesday on oil and gas exploration and production with Indonesia's national oil and gas firm, Pertamina.

The three companies will collaborate on oil and gas exploration and production both in Indonesia and other countries, KNOC exploration manager Sukyeon Hwang told The Jakarta Post following a meeting with senior officials from the Energy and Mineral Resources Ministry on Monday.

The meeting was only one of many to be held during a three-day visit by a South Korean business delegation, which comprises 190 senior executives representing major South Korean companies. They will be in Jakarta until Wednesday.

During Monday's meeting, another Korean energy firm, E1, said it would form a joint venture with Pertamina to build an LPG (Liquefied Petroleum Gas) plant in South Sumatra.

E1 representative Moon Soo Dong said the plant would have a designed capacity of 350 million cubic feet a day, and would cost about US$155 million to build.

He also said construction of the plant would begin in 2008, and that it was expected to commence commercial operations in the first half of 2010.

In the electricity sector, Korea Electric Power Corp. (Kepco) said that it agreed with state-owned electricity firm PLN to build a gas-fired power plant in Bojonegara, Banten, with an installed capacity of 750 megawatts (MW).

The plant is scheduled for completion between 2009 and 2010.

During the meeting, the world's largest LNG importer, Korea Gas (Kogas), said it was interested in taking part in the construction of a third train (processing unit) at the LNG plant in Tangguh, Papua.

The Tangguh LNG plant, owned by a BP Indonesia-led consortium, takes gas from a field that contains proven reserves of more than 14 trillion cubic feet. Trains I and II are currently in the final stages of construction. Based on existing contracts, Tangguh will deliver most of its LNG to South Korean firms Posco and SK Power.

According to a Kogas executive, who requested anonymity, the plan to invest in the Tangguh plant was part of the company's strategy to secure future LNG supplies from the plant.

Of the total of 24.6 million tons of LNG that South Korea imports every year, Kogas imports 5.3 million tons from Indonesia.

The company also expressed its interest in participating in the development of the country's gas fields by announcing its plan to take part in the next government tender for oil and gas blocks.

SOUTH KOREAN BUILD RAILWAY IN BORNEO

2007-04-30T23:37:00.000-07:00

RI, South Korea sign billion-dollar rail deal
05/01/07 10:02

Jakarta (ANTARA News) - Two South Korean companies signed an agreement with an Indonesian state firm Monday to build a railway line in Borneo in a deal worth one billion dollars, a report here said.

South Korea's POSCO and Canatect Ltd signed a memorandum of understanding with PT Kereta Api Indonesia, according to Detikcom news portal.

Indonesian Transport Minister Hatta Radjasa was quoted saying the railway line would be built in east Kalimantan, the Indonesian part of Borneo island.

No further details were available and a transport ministry spokesman declined comment.

The reported deal comes on the first day of a visit here by a large South Korean delegation made up of business leaders and government officials to follow up on an agreement to forge a strategic partnership between the two countries.

The agreement was reached during South Korean President Roh Moo-Hyun's visit to Indonesia in December.

Radjasa was quoted saying Monday's deal was the second since a new transport law was enacted, allowing the private sector to play a greater role in the development and operation of railways in Indonesia.

A Japanese consortia qualified this month to bid for a railway project in West Java at a cost of about 660 million dollars. (*)

S Korean bizmen to build railway track in E Kalimantan
04/30/07 23:52

Jakarta (ANTARA News) - South Korean businessmen were interested in investment in a railway track project for coal transportation to a special port in East Kalimantan, a member of cabinet said.

"Their investment is significant," Minister of Trade Mari E. Pangestu said after the signing of a memorandum of understanding between state-run railway company PT Kereta Api Indonesia and the businessmen here Monday.

She said that the ratification of the railway law has attracted the investors to invest in the sector.

Since it is a cooperation with PT KAI, she said she did not remember whether or not the businessmen would fully finance the project.

"The realization depends on the construction the rail tracks," Mari said.

Indonesian and South Korean businessmen also signed a deal on the building of an infusion factory in West Java.

Around 190 South Korean businessmen are also interested in investment in the textile industry.

They will evaluate whether or not they can invest in the sector and assist Indonesia to revitalize its textile machinery.

The minister said her office did not find any investment in 2006 and hoped there would be an increase this year.(*)

Copyright © 2007 ANTARA

OPEN SOURCE COMMUNITY SHOULD SET UP COMPANIES

2007-04-26T23:22:00.000-07:00

Open Source Community Should Set Up Companies
Thursday, 26 April, 2007 | 17:03 WIB

TEMPO Interactive, Jakarta: The government wants open source software developers to establish software companies.

Information and Communication Minister Sofyan Djalil has said that up until now, open source users have experienced problems because there are no user support services.

The support, said Sofyan, takes the form of usage consultation and assistance.

“As a result, the users are forced to be independent,” he said yesterday (04/25) in Jakarta.

The situation has resulted in open source software being considered less attractive by many computer users.

In addition, open source community could also take part in computer software legalization tenders in regional government offices by forming companies.

“So that government officials and general users know where to ask when they face a problem,” said Sofyan.
In addition, the software legalization process would be cheaper and could empower local potential in developing software.

According to Rusmanto, Editor-in-Chief of InfoLinux Magazine, there are already many open source developer companies.

“They are innumerable,” said Rusmanto.

In fact, all information technology companies in Indonesia are capable of providing open source software.

Many information technology companies, said Rusmanto, are ready to join government computer software legalization tenders.

“As long as the conditions are not discriminative and the tender is neutral,” he said.

Based on research results, the use of open source can reduce cost by between 50 and 70 percent compared to using proprietary software.

M Nur Rochmi

SEVEN GAS CONTRACTS SIGNED

2007-04-26T23:16:00.000-07:00

Seven Gas Contracts Signed
Thursday, 26 April, 2007 | 15:26 WIB

TEMPO Interactive, Jakarta: Seven gas trading contracts with a total volume of 738.52 trillion British thermal unit (TBTU) valued at US$3.1 billion were signed yesterday (04/25).

Head of Oil and Gas Executing Body Kardaya Warnika has said that of the total volume, almost half of them were used to meet the gas needs of electric generating plants belonging to PT PLN (the state-owned electricity company).

“Of the agreed amount, 343 TBTU are aimed at electricity needs whereas the remainder will be used for meeting gas needs in Pupuk Sriwidjaja's factory, fuel refinery in Balikpapan and Java,” said Kardaya after witnessing the contract signing in Jakarta, yesterday (04/25).

Among the seven signed contracts, four gas contracts were Pertamina EP's with US$430 million.

Kardaya said that Pertamina EP made use of flare gas from Semanggi, East Kandanghaur, Pegaden and Sukamandi Fields.

Financial Director of PT PLN Parno Isworo said that there was a possibility that the gas will be used for the Muara Tawar and other electricity generating plants in Java.

PLN bought the gas at a price of US$2.95 per MMBTU.

“By using gas, compared to oil-based fuel, we can reduce our expenses by around Rp36 trillion,” said Parno.

NIEKE INDRIETTA

GOVT PLANS MORE IMPORT, MARKET INTERVENTION TO CURB PRICE HIKE

2007-01-18T19:04:00.000-08:00

JAKARTA (Jakarta Post): The government may have to import more rice over the year, on the likelihoods of a shortage in supply of the staple food from still limited local production, and their current prices still running high.

Indonesia's domestic rice production --having been affected by last year's drought-- may remain low until the harvest time in March, Deputy the Coordinating Minister Bayu Krisnamurthi said, while the government still needs to distribute subsidized rice for the poor and supply the market from its national rice stock to keep prices at check.

"If the government's rice stock declines by all of this, then we will continue our policy to import rice," he told reporters Thursday after a meeting on the issue with the Trade Ministry, Agricultural Ministry, the National Logistics Agency (Bulog) andthe Central Statistics Agency (BPS).

Bayu declined to mention how much more rice the government may have to import again, saying it will be determined after a full assessment of the situation in March.

The government had previously decided to import at least 500,000 tons of rice this month, already holding biddings for it earlier this month.

Bayu expected the imported rice to begin coming in next week, which the government will use partly for the national rice stock, and to distribute twice as much subsidized rice for the poor than usual, totaling more than 600,000 tons until the end of February.

The rice will also be used for price stabilization efforts, with the government having assigned Bulog to continue supplying the market with rice at an even lower price of Rp 3,700 per kilogram, from Rp 4,000 previously.

Trade Minister Mari Elka Pangestu, meanwhile, had said the government will ensure distribution of the rice, including prevention of any attempts of hoarding, to prevent any shortages and price spikes again in the market.

Bayu explained that the rice price stabilization efforts has shown results, but admitted that the prices were still relatively high at between Rp 4,400 and Rp 4,950 (55 U.S. cents) per kilogram.

He only referred to rice prices in March last year at some Rp 4,300 a kilogram, without specifying at what exact price level the government is targeting.

"We want to bring the rice prices back to their level in November before they fluctuated, which is still favorable for

The government's policy to import rice has gathered pros and cons, with those supporting it arguing its necessity to ensure food security for the poor, while those against argue the policy will only be at the expense of domestic rice farmers.

BPS head Rusman Heriawan also mentioned that the rice import plan this month has yet done much to bring down rice prices, which has 3 percent since December, and could therefore affect the inflation rate this month.

Monthly inflation rose higher at 1.21 percent in December, from 0.34 percent in November, as rice prices creeped up by the end of last year. Although 2006's full-year inflation at 6.6 percent was lower than its 8 percent estimate, the rising riceprices had foiled previous optimism that inflation could end up even lower at 6 percent.(Urip Hudiono)

RI, AZERBAIJAN EXPLORE COOPERATION IN OIL AND GAS SECTOR

2007-01-18T18:58:00.000-08:00

JAKARTA (Jakarta Post): In a sign of a more concrete relations between Azerbaijan and Indonesia, ministries and companies from both countries have explored possible cooperation in education, transportation and energy.

In energy sector, both government officials and private sector have exchanged ideas on how they can embark on cooperation in oil and gas sector.

Azerbaijan Ambassador to Indonesia Ibrahim A. Hajiyev said that state-run oil and gas company Pertamina recently, for instance, had submitted to Azerbaijan government a proposal on possible cooperation in oil and gas sector for both countries.

"We have sent the proposals to our foreign ministry and our state committee on oil in Azerbaijan. They are now considering the proposals," he said during a press gathering at the Azerbaijan embassy on Thursday.

Hajiyev added that Azerbaijan and Indonesian companies have very good prospects in investing in both countries' oil and gas sector.

Located along petroleum-rich Caspian Sea, Azerbaijan, a nation of 8.5 million people, majority of them are Muslims, has huge oil and gas reserves.

With its booming oil industry, Azerbaijan was the world leader in economic growth last year, with 34 percent GDP growth from January-October 2006 while Indonesia, home to the world's largest Muslim population is Southeast Asia's biggest economy.

In transportation and education sectors, Azerbaijan has submitted its draft of treaties directly to the ministries to get a reciprocal responses.

"They have replied with their proposals. In general, they are acceptable for us. The final negotiation will take place, and the treaties will be signed soon. Transportation agreement will coveronly the air," Hajiyev said.

He said the agreement in education sector would enable both countries to have exchange of students.

Foreign Ministry director for South and Central Asia Mohamad Asruchin said that Indonesia and Azerbaijan will formalize its relations with establishment of a joint commission, paving wayfor regular meetings between officials from both countries.

"We already have draft agreement of establishing the joint commission. As a facilitator, foreign ministry hopes that private sector to seize business opportunities in Azerbaijan, and other Central Asian states.

Asruchin said that Indonesia could send skilled labor to Central Asian countries, especially in construction sector.(Abdul Khalik)

SINGAPORE SHIPBUILDERS RELOCATING TO BATAM

2006-11-19T23:25:00.000-08:00

Business and Investment - November 17, 2006

Fadli, The Jakarta Post, Batam

With Singapore restricting the growth of its shipbuilding industry due in part to environmental reasons, Batam and Karimun islands are taking advantage by attracting increasing numbers of shipbuilders from the neighboring country.

"Batam and Karimun have become the main destinations for Singaporean shipbuilders wishing to relocate. We welcome this trend because the industry has the potential to provide significant employment," said Chandra Dahlan, the chairman of the Batam Shipyard Offshore Association (BSOA).

BSOA figures show that there are currently 33 shipbuilders operating in Batam alone, with over 80 supplier companies. Chandra said that at least five of the shipbuilders had relocated from Singapore.

He added that with the strategic position occupied by the two islands, the trend would likely continue over the next few years.

Johannes Kennedy Aritonang, the chairman of the Batam branch of the Indonesian Chamber of Commerce (Kadin), also applauded the trend, saying it would help spur economic growth.

However, he pointed out that the relocation trend only involved small shipbuilders, which he claimed was the result of Singapore's inconsistency in implementing its environmental policies.

"At the moment, we can see the relocation only concerns small-scale companies, because despite its environment policies, Singapore is still holding on to the large-scale ones. They (the small shipbuilders) do contribute to the local economy, but to a limited extent," Johannes said.

If the trend continued, the environment in the two islands would suffer, he added.

"What Batam and Karimun want are the big shipbuilders, which comply with proper and globally standardized working mechanisms. But not the small companies, which often neglect environmental concerns."

US$1.1B PGN PIPELINE EXPECTED TO COME ONSTREAM NEXT MONTH

2006-11-19T23:06:00.000-08:00

Business and Investment - November 18, 2006

The Jakarta Post, Jakarta

President Susilo Bambang Yudhoyono has been drafted in to inaugurate a US$1.1 billion pipeline linking South Sumatra and West Java some time before the end of this year.

The pipeline, which will be operated by state-owned gas distributor PT Perusahaan Gas Negara (PGN), will supply between 300 million and 400 million standard cubic feet of gas per day (MMSCFD).

PGN's newly appointed president director, Sutikno, said Friday in Jakarta that the construction work was now 85 percent complete.

"We hope that operations can commence on Dec. 21," he said following an extraordinary shareholders, which endorsed his appointment as the company's top executive, replacing WMP Simanjuntak.

The project, comprising two pipeline tracks spanning a total of 1,106 kilometers from Grissik in South Sumatra to Rawa Maju in West Java, started last year.

"We hope we will be able to get additional gas supplies of about 300 million MMSCFD next year, thanks to this project," said PGN finance director Djoko Pramono.

The company said last year that when the pipeline came onstream, the company would see its 2007 revenues triple from the Rp 4.4 trillion (US$488 million) recorded in 2004.

The company booked a 22 percent revenue increase to Rp 5.4 trillion in 2005, as compared to 2004.

The gas distributor's net profit in the first nine months of this year rose 251 percent to Rp 1.5 trillion from Rp 427 billion a year earlier, while revenues from gas sales and transmission as of Sept. 30 jumped to Rp 4.9 trillion from Rp 3.9 trillion in the same period last year.

The meeting also endorsed the appointment of new development director Adil Abas, and also appointed Sutikno to double up as the company's business director.

Djoko was also named director for general affairs, while Simandjuntak was appointed to the company's board of commissioners.

PGN is the dominant player in the Indonesian natural gas market.

Next year, the company is planning to build another pipeline connecting Medan in North Sumatra and Duri in Riau. The 465-kilometer pipeline, which will have a total capacity of 250 MMSCFD, will cost about $490 million.(09)

GOVT PLANS NEW LEGISLATION FOR SPECIAL ECONOMIC ZONE

2006-11-19T22:33:00.000-08:00

National News - November 19, 2006
Urip Hudiono, The Jakarta Post, Hanoi

The government will issue a new regulation providing the legal basis needed for the special economic zone (SEZ) in Batam it is jointly developing with Singapore, ironing out as well several pending problems in business license administration, immigration procedures and labor skills.

The Office of the Coordinating Minister for the Economy is currently preparing the government regulation in lieu of law for SEZs, which is expected to come into effect "as soon as possible", said State Secretary Yusril Ihza Mahendra after a meeting Saturday between President Susilo Bambang Yudhoyono and Singapore prime minister Lee Hsien Loong on the sidelines of the APEC Summit here in Hanoi.

The government has decided not to embed the policies of SEZs in its revision of the country's Investment Law, which the House of Representatives is currently deliberating, as "there were too many SEZ-specific issues to be implemented (under one legislation)," Yusril said.

It may also be a faster and more effective way for the government to set up more investment-boosting SEZs throughout Indonesia.

"We'll talk with the House so that the new government regulation will not face too many challenges when the House deliberates on it," he said, without elaborating on the contents of the new regulation.

The government may initiate the issuance and imposing of a government regulation in lieu of law, with the House having to deliberate and approve or reject it within six months.

Investors have indeed been calling for the government to issue specific laws on SEZs, to provide the certainty of a legal basis for their investments. The government may issue one regulation for each SEZ.

The government will soon revise a 2000 government regulation providing incentives of reduced income tax for investments into 15 industry sectors and nine other region-based investment sectors.

Batam island, along with Riau Islands province's Bintan and Karimun, have since June been declared an SEZ, due to their strategic location near Singapore, with industries there now in need of space to expand. Potential investments in the Batam, Bintan and Karimun SEZ include the shipyard and electronics industries. The government plans to set up 14 SEZs throughout Indonesia.

Meanwhile, Coordinating Minister for the Economy Boediono said Friday's meeting was a follow-up briefing of a recent third round of talks of a joint steering committee established between Indonesia and Singapore for the SEZs.

The government will continue to improve the processing time for business licenses in Batam through the newly established one-stop investment center, Boediono said, and the setting up of an investor relation unit to handle any requirements and complaints from investors.

Immigration procedures for businesspeople from Indonesia and Singapore who frequent the SEZs will also be simplified and improved, using a so-called electronic card identity system for faster processing.

"We will also work together with Singapore in training related administrative officers, as well as skilled labor the industries will need at Batam Polytechnic," he said.

The Batam SEZ has since its establishment in June seen 37 investment projects worth US$90 million, providing up to 10,750 jobs, Investment Coordinating Board head M. Lutfi said.

The government is expecting to make Batam Indonesia's main export center, doubling its export value to US$3 billion, or making up 10 percent of Indonesia's total exports, in the next three years, Lutfi added.

FIRMS EYE UP 3 WATER-SUPPLY PROJECTS

2006-11-03T01:38:00.000-08:00

Andi Haswidi, The Jakarta Post, Jakarta

Three private firms have expressed a keen interest in investing in three water-supply projects worth Rp 1 trillion (around US$109 million) that have been put on the table by the government at the Infrastructure Conference and Exhibition 2006.

"Many investors are interested in our water projects. At least three of them have directly approached me today and stated their intention of tendering for piped-water projects," Public Works Minister Joko Kirmanto said at the conference in Jakarta on Thursday.

Joko said the three companies were Tyco Water of the U.S., Ami Water from Singapore and a local firm from East Kalimantan.

During the three-day infrastructure forum, which will end Friday, the government is offering three water-supply projects that will serve as models for private-public partnership (PPP) projects in the water sector.

The three projects are the Bandung water-supply scheme, which is worth Rp 300 billion, the Tangerang water-supply scheme, worth Rp 300 billion, both of which are located in West Java, and the Dumai water-supply project in Riau province, which is worth Rp 400 billion.

Joko said that the three companies had already conducted studies at the project locations, which would give them an advantage in submitting unsolicited bids.

The tenders for the projects will be launched this month, while pre-feasibility studies will be conducted in November, prequalification in December and acceptance of the final bids by as early as January 2007.

The government is aiming to tackle the chronic underdevelopment of the country's water-supply sector. At present, about two-thirds of Indonesia's 220 million people do not have access to a clean-water supply.

In cities, piped-water coverage averages only about 39 percent, while in rural areas coverage averages less than eight percent.

Under a 2005 presidential regulation, PPP projects can be identified and initiated both by the government and the private sector, but the private-sector promoters must be selected through an open and transparent tender.

The regulation permits tariffs to be set so as to allow for full-cost recovery. Should full-cost recovery exceed the ability of consumers to pay, the government must make good the difference through the payment of a subvention to the operator.

One possible problem facing PPPs is resistance from regional governments in the form of bureaucratic, anti-private sector ordinances.

Aware of this possibility, Joko said that he had ordered the Water Supply System Development Supporting Agency to assist investors when dealing with local administrations.

"I am sure that every regional government wants to work for the benefit of its residents. Local administrations will be allowed to stipulate their own rules as long as these don't conflict with our national objectives," he said.

The minister also said there would be no restrictions on which parts of the country investors, whether local or foreign, would be allowed to develop projects.

"Any restrictions will be set by the market itself. I don't think that many big overseas companies will want to invest in rural areas that can only generate insignificant revenues. They will aim for the big cities and leave the rest to the local government water utilities," he said.

U.S. FIRM SETS SIGHTS ON PURCHASES IN RI

2006-11-03T01:34:00.000-08:00

Tony Hotland, The Jakarta Post, Jakarta

U.S.-based private equity company Texas Pacific Group (TPG) said Thursday it had set up a local subsidiary, Northstar Equity Partners, as a reflection of its growing interest in investing in Indonesia.

TPG is the world's second biggest buyout firm and is reported to have about US$45 billion in assets at its disposal. It has acquired stakes in several major international corporations, such as Baxter International Inc. and Burger King.

TPG chairman David Bonderman met Thursday with President Susilo Bambang Yudhoyono at the latter's office, just a day after Yudhoyono opened the three-day Indonesia Infrastructure Conference and Exhibition 2006.

"Indonesia's economy is growing, a resource-based economy, so we feel now is the right time to start investing," said Bonderman.

Among those accompanying Yudhoyono were Coordinating Minister for the Economy Boediono, Finance Minister Sri Mulyani, Transportation Minister Hatta Radjasa and State Minister for State-owned Enterprises Soegiharto, while Bonderman was accompanied by TPG managing director Tim Dattels and Northstar Equity Partners managing director Patrick Wallujo.

Wallujo said Northstar had start-up capital of $100 million, although he said this figure could grow depending on the value of prospective investments.

"We are looking at the infrastructure sector as well as natural resources, such as biofuel energy and plantations," he said.

Later on, Bonderman met with Vice President Jusuf Kalla, who was accompanied by Emirsyah Satar, the president director of state-owned airline PT Garuda Indonesia, prompting suggestions that the American firm might be interested in acquiring a stake in the debt-ridden airline.

During a question-and-answer session at the presidential office, presidential spokesman Dino Patti Djalal abruptly cut short a journalist who had asked Bonderman whether Northstar was interested in taking a stake in Garuda.

Garuda has long been a chronically loss-making venture, reportedly primarily due to mismanagement. It is seeking to restructure its $794 million debt, while the government is weighing up the options of either injecting fresh capital into the airline or selling it to investors.

RI PRESIDENT PROMISES TO ELIMINATE INVESTMENT OBSTACLES

2006-10-31T19:43:00.000-08:00

Shanghai, China (ANTARA News) - Visiting Indonesian President Susilo Bambang Yudhoyono said he would eliminate major obstacles in every sector in Indonesia to ensure the entry of foreign investment into the country.

"I reitrate that I will do my best to eliminate the major obstacles in every important sector," he said when opening the Indonesia-China Energy Forum (ICEF) II in Shanghai, China, on Saturday.

The president made the remarks in comment on the existing interest of Chinese investors not only in the energy but also in the mining and mineral sectors.

"We are endowed with huge mineral and other resources. I hope Chinese companies will invest in these sectors," the president said.

In the governmnt`s efforts to create legal certainty, Susilo said he had asked all governors in the country to conduct coordination, cooperation and better understanding not only in their own jurisdictions but also with the other provinces and correlate their moves with the national policies.

The head of state also explained that Indonesia had changed the way in which it was managing its oil and gas sector with the objective of having a modern and competitive oil and gas industry.

The president said, Indonesia was providing opportunities for investment in its oil and gas sector at the upstream and downstream levels by cutting the operational costs, so as to make it more atractive to domestic and foreign energy companies.

"We also need major investment to finance measures to improve and expand the infrastructure sector," he said.

In addition, Yudhoyono said Indonesia had also a new power policy by creating similarity for all investors through investment scheme for competitive power market, risk distribution inter investors, improvement of the regional government regulation, consumers and people protection.

"We also promote the new policy on coal to step up production so as to meet the increasing domestic demand and control its sustainability and improve its competitiveness in the international market," he said, adding that for Indonesia and China energy had become the key to success in development, to prosperity and stability.

"The prosperity of our people, the health of our economy and our political stability depend on the trust of sustainability and the aviability of energy resources," he said.

Meanwhile, Chinese Senior Deputy Prime Minister Huang Zu in his address said the strategic partnership between China and Indonesia which was agreed on last year should be stepped up in a bid to turn out good results for the two countries.

Regarding the cooperation in the field of energy, it was expected that ICEF II would bring about better results compared with ICEF I which was held in Bali in 2002.

"ICEF I which was conducted four years ago has turned out positive results and the present ICEF II is also expected to bring about better results in energy cooperation," Huang Zu said, hoping that through this forum not only Chinese investors would come to Indonesia but Indonesian investors would also come to China.

President Susilo Bambang Yudhoyono on the occasion was accompanied by Energy and Mineral Resources Minister Purnomo Yusgiantoro, State Enterprises Minister Sugiarto, Head of the Investment Coordinating Agency Muhammad Lutfi and Chairman of the Indonesian Chamber of Commerce and Industry (KADIN) MS Hidayat.

During his five-day stay in China, President Yudhoyono and his entourage would also visit the tourist city of Guilin and Nanning to attend the China-Asean Relations Commemorative Summit and meet Chinese Prime Minister Wen Jiabao.(*)

INDONESIA TO OFFER 111 PROJECTS WORTH US$16.74 BLN

2006-10-31T19:39:00.000-08:00

Jakarta (ANTARA News) - The government will offer 111 projects worth US$16.74 bln at a two-day infrastructure summit that starts today (November 1, 2006), deputy coordinating minister for infrastructure Suyono Dikun said.

He said the main target is to offer 10 projects worth US$4.51 bln.

"For the 10 projects we will issue information memorandum to potential investors at the summit. Hopefully, right after the summit, we can start the bidding process," Dikun told XFN-Asia.

He said the government hopes interest on the remaining 101 projects valued at US$12.23 bln will follow suit.

The projects range from power plants, toll roads, water, gas pipelines and transportation infrastructure.

"The number (of total projects to be offered) is not fixed. It could change but that is the plan," said Dikun, who heads the summit's steering committee.

During the first infrastructure summit in January last year, the government offered 91 projects worth more than US$22.5 bln, but has so far secured deals for only nine. (*)

REGIONS OFFERS MAJOR INVESTMENT PROJECTS

2006-10-31T19:23:00.000-08:00

The Jakarta Post, Jakarta

Domestic and foreign investors will have plenty of tempting opportunities laid out before them this week. On top of large, national-level projects that the central government plans to offer at the upcoming infrastructure conference, the regions are also lining up ventures for investors to put their money into.

More than 16 provinces will put projects worth some US$3.47 billion on the block at the upcoming Indonesian Regional Investment Forum (IRIF) on Nov. 2-3, says the event organizer.

Toni Gourlay of Sound Initiatives said the projects were in such sectors as tourism, infrastructure, agribusiness, power generation, food processing and manufacturing.

Among the participating provinces, Riau's are the most valuable, including a new highway worth $506 million, the $1.41 billion Dumai international airport, the Pasir Pangarayan-Dumai railroad worth $555 million and a $222-million power plant in Rokan Hulu regency.

Meanwhile, Jakarta province is offering a project worth $110 million for the expansion of the Tanah Abang market.

More than 800 foreign and domestic investors, and business leaders will attend the two-day forum, which will be opened by President Susilo Bambang Yudhoyono, Gourlay said.

"We have also specially invited one of the most influential thinkers on business strategy today, CK Prahalad, as the keynote speaker for this event to enlighten local bureaucrats on how to make their regions more investor-friendly," steering committee chairman Irman Gusman said.

"The problem is that these bureaucrats are not businessmen and in this forum we want to help them meet the needs of investors," Irman explained.

The idea for the forum was initiated by the Regional Representatives Council. (JP/09)

GOVT SUGGESTS EIGHT SOE TO GET ADDITIONAL CAPITAL

2006-10-16T21:27:00.000-07:00

The government has suggested eight SOEs (state owned enterprises) to get additional capital in the form of government funds (PMN) in year 2007.

State Minister for SOE Sugiharto said here Thursday (12/10) the eight governments suggested SOEs are in urgent need of additional capital for their restructuring.

PT Pupuk Iskandar Muda will get US$22 million, PT Kertas Leces US$ 19.4 million, PT Kereta Api Indonesia US$ 11.1 million, Garuda Indonesia US$ 55.6 million, Perum Sarana Pengembangan Usaha US$ 5.6 million, Industri Kereta Api US$ 11.1 million, PT Boma Bisma Indra US$ 8.3 million, and PT PTPN XIV US$ 11.1 million.

House Commission VI suggested two more SOEs to get PMN. They are PT Aceh Asean Fertilizer and Permodalan Nasional Madani.

In view of the 2007 privatization program, the government is selling a maximum 30 per cent of its share to several SOEs. Of the total, 10-20% goes to the State Budget of Revenues and Expenditures and the remainder to SOE.

The move, Sugiharto said, is to see to it that the government remains being the majority share holder.

Commenting on the increased privatization target of US$ 366.7 million, the minister hoped that could come from 14 SOEs that will shortly be privatized. The total includes BNI Bank, Krakatau Steel, PT Jakarta Hotel Development, PT Kertas Padalarang, PT Intirub, PT Reksadana, and PT Kertas Basuki Rachmat.

Meanwhile, the divestment of Perusahaan Gas Negara Stata Gas Corporation) is to be conducted by way of secondary offering and is still being analyzed, Sugiharto said.

source: http://www.bipnewsroom.info

PRESIDENT DECLARES PALM SUGAR PROJECT NATIONAL PROGRAM

2006-10-12T21:48:00.000-07:00

Jakarta (ANTARA News) - President Susilo Bambang Yudhoyono has declared the sugar palm development project part of the national food security program and the alternative energy program, like castor oil, sugarcane and cassava development projects.

Coordinating Minister for People`s Welfare Aburizal Bakrie told the press at the Presidential Office here Thursday that the President made the decision after receiving information about the prospect of this sugar palm development in the creation of job opportunities, alleviation of poverty, enhancement of food security and production of alternative energy resources.

North Sulawesi now has a factory that processes palm sugar into crystal sugar, according to Aburizal. This is the first sugar processing factory in the world, which is oriented to export, has given jobs to 2,222 farmers who serve as sap tappers.

The price of crystal sugar is Rp50,000/kg, and 30 percent of this palm sugar consists of molasses, a basic material for ethanol, which can be used as an alternative energy source.

In the implementation of the sugar development program, the government plans to build six processing factories in North Sumatra, West Java, East Java, Southeast Sulawesi, West Kalimantan and East Kalimantan at a total cost of Rp60 billion from the State Budget in 2007.

The operation of the six new processing factorie is expected to open job opportunities for some 300,000 workers, Aburizal said, and pointed out there are 800,000 of sugar palm plantations in Indonesia today. The optimal cultivation of those plantations will give jobs to some five million people, he added.

The President is scheduled to visit Tomohon, North Sulawesi province, in December 2006 to inaugurate the second crystal sugar factory in Indonesia. On the occasion, the President will hold a dialogue with sugar palm farmers in the province. (*)

Copyright © 2006 ANTARA

October 13, 2006

TOP TRADERS GET PRESIDENT'S SEAL OF APPROVAL

2006-10-12T20:39:00.000-07:00

The Jakarta Post, October 13, 2006 - Jakarta

President Susilo Bambang Yudhoyono presented the Primaniyarta Awards to 23 companies assessed as the best performing exporters this year, and praised them as economic heroes during a ceremony Wednesday.

He said that total exports this year could reach US$100 billion as they amounted to $64.6 billion during the first eight months alone, up 17.1 percent from the same period last year.

Mineral exports posted the highest growth at 35.20 percent, followed by agricultural commodities at 21.7 percent and manufactured products at 14.6 percent.

"We should further develop our exports, notably the products of labor-intensive and resource-based businesses as they have a strong competitive edge on the international market," Yudhoyono said.

He noted that the export sector, besides private and government consumption, had been the main locomotive of economic growth over the past few years. However, investment needed to be increased if the export sector was once again to be the prime mover of the economy as it was before the 1997 economic crisis.

"The government has launched several reform packages to improve the investment climate as it is only through robust new investment that we will be able to create the jobs we need," he said at the opening of the five-day Trade Expo Indonesia at the Kemayoran Fairground.

The Primaniyarta Awards have been presented by the Trade Ministry annually since the 1990s as part of the effort to promote exports and motivate companies to become more active in marketing their products worldwide.

Best export performance is assessed based on increases in export sales, diversification of export markets and products, and the development of Indonesian brand names on the international market.

Resource-based exporters continued to make up the majority of the 23 Primaniyarta awardees this year, which included eight small and medium-scale businesses.

Among the winners were PT Musim Mas, a palm-oil company based in Medan, North Sumatra, which received an award for best performing exporter. This was the seventh time that Musim Mas has won the award.

PT Megasurya Mas from Sidoarjo, East Java, received the exceptional achievement award for promoting its own brands and expanding its exports of soap and margarine products to more than 60 countries in Asia and Africa. This year marked its second Primaniyarta award.

Other awardees were companies that utilized natural gas (such as PT Pupuk Kaltim), timber (such as PT Cahaya Sakti Furintraco) and agricultural products (fruits, spices and palm oil).

Only two of the awardees -- PT LG. Electronics Indonesia and textile firm PT Daya Manunggal -- were not entirely dependent on local natural resources.

PROFILE ON PT KRAKATAU STEEL

2006-09-27T20:28:00.000-07:00

Krakatau Steel Group operates an integrated steel industry. Its holding company is state-owned steel maker PT Krakatau Steel (KS), which was established in 1971. It took over steel factory Trikora. KS is wholly owned by the government. It has increased its authorized capital several times. In 2003, its authorized capital was IDR 2 trillion (US$200 million).

In 35 years, here was no significant increase made in expanding its capacity. Currently KS has 35 million tons of annual production capacity. Its production still falls far short of the requirement in the country. The country’s downstream industry has to rely much on imports for steel basic materials.

At the time B.J. Habibie was Research and Technology Minister and chairman of the agency managing strategic industry including PT KS, the steel maker already planned to build an integrated upstream steel industry. However, the plan is never come to reality, because of the monetary crisis in 1998.

In 2006, PT KS has made another plan to build expansion plant for development of the pellet in South Kalimantan. South Kalimantan was chosen as the most suitable place as it has large iron ore reserves on the island of Sebuku, estimated to have deposit of 560 million tons of iron ores. So far the country still imports iron ore mainly from Brazil and Chile.

The palletizing plant will have 2 million tons annual production capacity for the beginning year. It was reported that five international companies have indicated interest in the project. They are Metallurgical China Construction (MCC) and Sino Steel from China, Essar and Ispat International from India, and Trans Asia International from Europe. The factory to cost around US$460 million is part of PT KS’s expansion program of US$ 897 million to be carried out by phases until 2010.

In utilizing the iron ore reserve, KS will cooperate with PT Sebuku Iron Leteric Ores (PT SILO) as the mining operator in the island of Sebuku and with CV Source Daya Alam which holds the mining authority in the Karang Tunggal sub-district, Tasikmalaya, West Java.

From part of its strategic plan, PT KS plan to expand its production capacity. In the first stage it will expand its capacity by 1 million tons a year in 2008 and continues the expansion program to bring its annual capacity to 10 million tons in 2013 and to 20 million tons in 2020.

Installed production capacity of PT KS in 2005.
Sponge Iron: 2.3 million ton per year (HYL I: 1 million tons; HYL III: 1.3 million tons)
Steel Slab: 1.8 million tons per year (Plant I: 1 million tons; Plant II: 800,000 tons)
Steel Billet: 675,000 tons per year
HRC: 2.5 million tons per year
CRC: 650,000 tons per year
Wire Rod: 450,000 tons per year

PT KS Subsidiaries

There is 3 subsidiary companies under PT KS, they are PT. Krakatau Wajatama (concrete reinforcing iron producer), PT KHI Pipe Industries, and PT Pelat Timah Nusantara (PT LATINUSA=Tin plate producer).

PT Karakatau Wajatama was establish in 1992 producing various types of high quality steel bars such as INP, IWF, H-Beam, U-Channel, and L-Angles, Deformed and Plain Bars and steel wire rod. This company has three production facilities – Section Mill, Bar Mill, and Cold Wire Drawing.

PT KHI Pipe Industries (PT KHI) was established in 1972, producing steel pipe. This company has an annual production capacity of 155,000 tons of spiral pipe. PT KHI is the only producer of spiral pipes in Indonesia with international recognition.

Its factory is located over a 160,000 m2 plot of land in Cilegon, producing welded spiral steel pipes with diameters from 4 to 8 inches from various types of steel with a thickness of up to 25mm. Its products include column pipes, oil and gas pipes, water pipe, and protection services.

PT LATINUSA was established in 1982 as a joint venture with PT Tambang Timah and Nusantara Ampera Bhakti. Latinusa produces tin coated thin steel plate as a basic material for can in the Cilegon Industrial Estate. Latinusa has an annual production capacity of 130,000 tons in sheet and rolls with prime quality (90%) and non prime quality (10%) that can be used for milk can or food critical, general can or non critical.

Supporting Infrastructure and Facilities

PT KS has supporting facilities separately managed such as an industrial estate under subsidiary PT Krakatau Industrial Estate Cilegon (PT KIEC), power plant under PT Krakatau Daya Listrik (PT KDL), water processing plant under PT Krakatau Tirta Industri (KTI), port facility under PT Krakatau Bandar Samudera (KBS), health care subsidiary under PT Krakatau Medika.

PT KIEC was established in 1982. KIEC was built to accommodate upstream and downstream steel and chemical industries. KIEC also has property business such as hotel, office building and sport facilities.

PT KDL was established in 1996, wholly owned by PT KS. The company operates a power plant supplying electricity to all consumers in the KIEC and surrounding areas. PT KTI produces clean water to supply consumers in the industrial estate and surrounding areas such as the public in Cilegon.

PT KBS operates the special port of Cigading in Cilegon, Banten. KBS handles loading and unloading of bulk cargoes such as iron ore, dry bulk, gypsum, sugar, soybean meal, coal, and scrap iron. With 855 m outer quay and 243 m deep quay and 75 m barge quay, it makes Cigading become one of big port in Indonesia with the deepest basin. The port could accommodate and serve 10 ships at the same time.

PT KS also has to subsidiaries operating as consultant. One is PT Krakatau Information Technology (Krakatau IT) was established in 1993. It operates as information technology service company. The second is PT Krakatau Engineering was established in 1988 operating as EPC (Engineering, Procurement, and Construction) contractor and consultant (studies, project management and industrial management).

List of Contacts

PT KRAKATAU STEEL
Address:
ADB Building
Jl. Industri No. 5, Cilegon 42435, INDONESIA
Website: http://www.krakatausteel.com/

PT KRAKATAU WAJATAMA
Address:
Wisma Baja Building, 7th Floor
Jl. Jend. Gatot Subroto Kav. 54, Slipi,
Jakarta Selatan 12950, INDONESIA

PT KHI PIPE INDUSTRIES
Address:
Wisma Baja Building, 7th Floor
Jl. Jend. Gatot Subroto Kav. 54, Slipi,
Jakarta Selatan 12950, INDONESIA
Website: http://www.khi.co.id/

PT PELAT TIMAH NUSANTARA (LATINUSA)
Address:
Jl. Letjen. S. Parman No. 7-8, Slipi,
Jakarta Barat 11480, INDONESIA
Website: http://www.latinusa.co.id/

PT KRAKATAU INDUSTRIAL ESTATE CILEGON
Address:
Wisma Baja Building, 8th Floor
Jl. Jend. Gatot Subroto Kav. 54,
Jakarta Selatan 12950, INDONESIA
Website: http://www.kiec.co.id/

PT KRAKATAU DAYA LISTRIK
Address:
Krakatau Industrial Estate Jl. Amerika I,
Cilegon 42443, Banten, INDONESIA
Website: http://www.kdl.co.id/

PT KRAKATAU BANDAR SAMUDERA
Address:
Jl. Letjen. S. Parman Km. 13, Cigading,
Cilegon 42445, INDONESIA
Website: http://www.cigadingport.com/

PT KRAKATAU INFORMATION TECHNOLOGY
Address:
Wisma Baja Building, 7th Floor
Jl. Jend. Gatot Subroto Kav. 54, Slipi,
Jakarta Selatan 12950, INDONESIA
Website: http://www.kit.co.id/

PT KRAKATAU ENGINEERING
Address:
Wisma Baja Building, 7th Floor
Jl. Jend. Gatot Subroto Kav. 54, Slipi,
Jakarta Selatan 12950, INDONESIA
Website: http://www.krakataueng.co.id/

INDONESIA METAL MINING INDUSTRY PROFILE

2006-09-24T22:20:00.000-07:00

In 2005, nickel mining industry woke up from slump development in 2003-2004. As until now, no other investor interested in copper mining in Indonesia, the futures of copper mining will depend on the operational activities of PT Freeport and PT Newmont, which have large recoverable reserves, enough for around 20 years. As already occurred in the last 5 years, copper price is expected to continue rising as already started in 2005, related to the rising copper consumption by China. Copper production in Indonesia is expected to increase by an average annual rate of 2.0% in coming 5 years from 1.09 million tons in 2006 to 1.18 million tons in 2020.

Until now, PT Freeport Indonesia and PT Newmont Nusa Tenggara will remain the only two copper mining companies in Indonesia marked by Grasberg and Batu Hijau copper mines. Grasberg is reported as one of the largest copper mine in the world. The two companies are producing porphyry copper ore containing gold and silver.

Gold mining industry in Indonesia has actually very promising prospect with regard to the huge resources available in West, Central and East Kalimantan.

In West Kalimantan there is a village called Beringin in Singkawang Regency have 35 million tons of alluvial placer gold containing 169 mg of gold per cu.m.

In Central Kalimantan, there are a lot more villages having huge gold ore deposits, which include:

Village Tumbang Liling (42 million tons deposit of 280 mg of gold per cu.m)
Village Cempaka Buang (15 million tons deposit of 300 mg of gold per cu.m)
Village Tewang Tampang (24 million tons deposit of 220 mg of gold per cu.m)
Village Batuah (31.3 million tons deposit of 268 mg of gold per cu.m)
Village Baamang Tengah (30 million tons deposit of 184 mg of gold per cu.m)

All of the villages are in Waringin Timur Regency, Central Kalimantan.

In East Kalimantan, there is a village called Muara Asa recorded of having a total gold ore deposit of 300 million tons containing 400 mg of gold per cu.m.

There are many other villages having adequate amount of gold ores, including those located in Banten Province, and West Java Province. Although not as spectacular as those in Kalimantan.

Silver production fluctuated from 255.4 tons in 2000 to 238.7 tons in 2005. Silver mining in Indonesia is combining with gold mining, highly notable silver ore deposits are found in Dairi - North Sumatera, Kelapa Kampit – Belitung, and in Papua (Kucing Liar, Grasberg Deep, Big Gossan and DOM).

Nickel production in term of Ni+Co in matte produced by PT Inco increased from 55,589 tons in 2000 to 77,471 tons in 2005 with an average growth rate of 10.7% per year. PT Aneka Tambang (Antam) produced 10,111 tons of Ni in FeNi in 2000 then gradually dropped to 7,945 tons in 2010 with an annual growth rate of (-13.6%).

Tin metal is produced by PT Timah and PT Koba Tin, which increased from 47,129 tons in 2000 to 67,600 tons in 2005 with an annual growth rate of 8.1%. Tin mining prospect will still expected to be in Bangka-Belitung province, particularly in Simpang Rusa and Koba, which are in the mining areas of PT Timah and PT Koba Tin.

Bauxite production grows slowly in 2000 – 2005 due mainly to some depletion of PT Antam’s bauxite recoverable deposits. Bauxite production was 1,151 thousand tons in 2000 then fluctuated to drop to 1,082 thousand tons in 2005 with annual growth rate of (-0.7%) per year. The future of bauxite mining will be in Riau island, including Pualu Bintan (101 million tons) and Kampung Bugis (1,332 million tons), which are in PT Timah’s mining areas. There are also huge bauxite deposits in West Kalimantan with total 2,368 million tons deposits, but nothing done until now to exploit the deposit, yet. They are located in the villages of Balai Tinggi (54 million tons), Kendawang Kanan (532 million tons), Baru Lombang (198 million tons), Tanjung Batu Belati (1,146 million tons), Menyumbang (200 million tons), and Menukung village (238 million tons).

Iron sand production is produced by PT Antam at a very discouraging development, producing only 489 thousand tons in 2000 then decline to only 26 thousand tons in 2005, despite abundant recoverable reserves is available. Iron sand deposit is plentiful in South Kalimantan, especially in Batu Licin (125 million tons) and Sebuku Islands (626 million tons).

In order to decrease the dependence on raw material import, PT Krakatau Steel, the only integrated steel industry in Indonesia, plans to set up new palletizing plant in South Kalimantan. The plant will use iron ores from South Kalimantan and West Kalimantan. In the first stage, PT KS will build sponge iron plant with a production capacity of 300,000 tons per year, and will be expanded to around 4 million tons per year. Government also encourages the mining companies to support PT KS’s plant and develop the iron mining in Kalimantan.

LIST OF CONTACTS

PT. FREEPORT INDONESIA
Address:
Plaza 89 Building, 5th Floor
Jl. HR. Rasuna Said Kav. X-7 No. 6, Kuningan,
Jakarta Selatan 12940, INDONESIA
Website: http://www.ptfi.co.id/

PT. NEWMONT NUSA TENGGARA
Address:
Menara Rajawali Building, 26th Floor
Jl. Mega Kuningan Lot f 5.1,
Jakarta Selatan 12950, INDONESIA
Website: http://www.newmont.co.id/

PT. INTERNATIONAL NICKEL INDONESIA (INCO)
Address:
Plaza Bapindo Building Citibank Tower, 22nd Floor
Jl. Jend. Sudirman Kav. 54-55,
Jakarta Selatan 12190, INDONESIA
Website:

PT. ANEKA TAMBANG TBK.
Address:
Jl. Pemuda Ujung-Raya Bekasi Km. 18, Pulogadung,
Jakarta Timur 13210, INDONESIA
Website: http://www.antam.com/

PT. TIMAH TBK.
Address:
Jl. Jend. Sudirman No. 51,
Pangkal Pinang 33121
Bangka Belitung, INDONESIA
Website: http://www.timah.com/

PT. KOBA TIN
Address:
Arthaloka Building, 12th Floor
Jl. Jend. Sudirman Kav. 2,
Jakarta Pusat 10220, INDONESIA
Website: http://www.ptkoba.co.id/

PT. KRAKATAU STEEL
Address:
ADB Building
Jl. Industri No. 5, Cilegon 42435, INDONESIA
Website: http://www.krakatausteel.com/

DEVELOPMENT OF STEEL INDUSTRY IN INDONESIA

2006-09-04T21:48:00.000-07:00

Indonesia will deficit on steel supply on 2009. Steel consumption in the next 3 years will need 11.7 million tons, instead of local steel production only 5.7 million tons.

Lack of steel supply on hot rolled coil (HRC) and cold rolled coil (CRC) is done since 2001. In 2001 local consumption was 3.25 million tons, instead of local production only 2.16 million tons. So lack of supply around 1.08 million tons was supplied by import. Lack of steel local supply, because of there is no new investment or expansion for steel mill or manufacturer since 1998.

Steel local producer only produce steel for construction supply. Meanwhile, the biggest local need of steel is for automotive industry, such as electrical galvanized and galvanic. Consumption of this kind of steel increase very significant for 32% in the year 2003-2004. This cause of national automotive industry increases their production.

To solve lack of steel supply in Indonesia, the government since April 2004, reduce steel products import duty to 0%, such as hot rolled coil/ plate (HRC/P). Because of that local demand on steel product continue to increase, in 2004 local consumption increase to 4.2 million ton from 3.18 million tons in 2003. Also in 2005 local consumption increase to 4.3 million tons.

Increasing on local consumption is not followed by local production. In 2002 local production of HRC/P reach 1.62 million tons, otherwise local production continue to decrease to 1.52 million tons in 2003 and 1.32 million tons in 2004. Local consumption of HRC/P in 2004 mostly for produces CRC (36.9%) and pipe industry (23.3%). The other is for produce steel profile (14.6%), shipbuilder (2.1%), and automotive (2.1%).

RUBBER YARN EXPORT MARKET FROM INDONESIA

2006-08-28T20:20:00.000-07:00

The price of world rubber yarn has been increasing in the last few years, but unfortunately this good opportunity has not been used by Indonesia’s rubber yarn producer to boost their exports, which have been fluctuating in the last five years.

In Indonesia, rubber yarn has developed for quite a long time and now there are four producers of the commodity with a total production capacity of 17,208 tons per year. They are PT CILATEXINDO GRAHA ALAM, PT BAKRIE RUBBER INDUSTRY, PT PERKEBUNAN NUSANTARA III, and PT SWASTHI PARAMA MULYA.

According to the Central Bureau of Statistics (BPS) in 2001 the exports stood only at 6,337 tons worth US$9,282 thousand, and in 2002 increased by 5.7% to 6,697 tons, but in 2003 reached only 4,409 tons estimated at US$9,818 thousand. After increasing to 6,576 tons in 2004, the rubber yarn export in 2005 dropped to 5,542 tons worth US$13,971 thousand.

Of the destination of Indonesia’s rubber yarn exports in 2004, the biggest was Hong Kong with 2,987 tons (45.4% from total exports), followed by Turkey (644 tons=9.6%), South Korea (632 tons=9.6%), the United States (622 tons=9.5%), and Thailand (621 tons=9.4%).

List of Contact

PT. CILATEXINDO GRAHA ALAM
Address:
Jl. Raya Narogong Km. 23 Desa Dayeuh,
Cileungsi, Bogor 16820 – INDONESIA
Tel: (62 21) 8230153
Fax: (62 21) 8230152

PT. BAKRIE RUBBER INDUSTRY
Address:
Bunut Kisaran, Kisaran,
Asahan 21211, North Sumatera – INDONESIA
Tel: (62 623) 42501, 41884
Fax: (62 623) 42451
Email: bakrieri@indosat.net.id

PT. PERKEBUNAN NUSANTARA III (State-owned Company)
Address:
Jl. Sei Batanghari No. 2,
Medan 20122, North Sumatera - INDONESIA
Tel: (62 61) 8452244, 8455775, 8453100
Fax: (62 61) 8455177, 8454728
Website: www.ptpn3.co.id
Email: ptpn3@indosat.net.id

PT. SWASTHI PARAMA MULYA
Address:
Desa Ganda Mekar Km. 24, Cibitung
Bekasi 17520 - INDONESIA
Tel: (62 21) 88321318
Fax: (62 21) 88320008, 88320910

LIST OF LUBRICATING OIL PRODUCER IN INDONESIA

2006-08-28T01:05:00.000-07:00

1. PERTAMINA
Start operations: 1956
Status: State-owned company
Factory location: Jakarta, Surbaya, Cilacap
Brands: Mesran, Prima XP, Mediteran SX, Rored EPA, Fastron
Production capacity: 280,000; 90,000; and 135,000 kiloliters/years

2. PT DIRGA BUANA SARANA
Start operations: 1989
Status: Local investment
Factory location: Jakarta
Brands: Union 76, Valvoline
Production capacity: 24,000 kiloliters/years

3. PT WIRASWASTA GEMILANG INDONESIA
Start operations: 1996
Status: Local investment
Factory location: Bekasi
Brands: Evalube, Penzoil
Production capacity: 120,000 kiloliters/years

4. PT AGIP LUBRINDO PRATAMA
Start operations: 1998
Status: Local investment
Factory location: Pasuruan
Brands: Agip
Production capacity: 40,000 kiloliters/years

5. PT NUSARAYA PUTRAMANDIRI
Start operations: 2001
Status: Local investment
Factory Cilegon, Banten
Brands: Penlube
Production capacity: 83,333 kiloliters/years

6. PT CASTROL INDONESIA
Start operations: 1998
Status: Foreign investment
Factory location: Merak, Banten
Brands: Castrol
Production capacity: 26,666 kiloliters/years

SINGAPORE COMMITTED TO STRENGTHENING DEFENSE COOPERATION WITH RI

2006-08-22T19:31:00.000-07:00

Jakarta (ANTARA News) - Singapore is committed to strengthening defense cooperation with Indonesia through the Defense Cooperation Agreement (DCA) to be further discussed by the two neighbors at the end of August 2006.

The purpose of the defense cooperation between the two countries is to build stronger mutually beneficial partnership, Singapore`s Defense Minister Teo Chee Hean said here Tuesday after meeting with his Indonesian counterpart, Defense Minister Juwono Sudarsono.

The different interpretation of several points in the discussion on the defense cooperation between the two countries is common in efforts to foster understanding aimed at developing cooperation and partnership mutually beneficial to both sides, he explained.

Giving an example, he pointed out that the Indonesian Air Force and Singapore`s Air Force have long engaged in cooperation in promoting their capabilities on the basis of mutual trust and mutual benefit.

What already achieved by the two air forces in the defense cooperation indicates that two military bodies can work together and become friends to each other, according to Hean.

More over, Indonesia and Singapore have long exchanged their military officers to share their experiences, he said, adding that the core of the defense cooperation is very close and strong interaction between the Armed Forces as well as people of the two countries, which can be further promote in the future.

Thus, different interpretation is not an important impediment in strengthening the future defense cooperation based on understanding and mutual benefit between the two countries, he revealed.

As part of the effort to strengthen defense cooperation, Indonesia and Singapore have carried out joint military exercises in the Military Training Area (MTA) since 2000. The two countries have agreed to launch joint military exercises in MTA I in Tanjung Pinang waters and MTA II in the South China Sea.

However, Indonesia has noticed that Singapore has frequently violated Indonesian sovereignty during the joint military exercise, including the involvement of the third parties such as the United States and Australia.

Indications that Singapore has often committed violations have caused Indonesia to make a unilateral decision to stop the use of MTA facilities in 2003. To resume defense cooperation between the two countries, Singapore`s Prime Minister Lee Hsien Loong has forwarded a DCA concept to President Susilo Bambang Yudhoyono in Bali in 2005.

Indonesia has accepted the concept, which includes the use of MTA in the enclosure. But up to fourth round of the meeting on resumption of the defense cooperation, the two countries have not reached agreement.

Minister Juwono Sudarsono disclosed that the factor hampering the talks to reach agreement is different interpretation of six matters, including the period of the bilateral defense cooperation, the involvement of the third parties, the settlement of disputes, and Indonesia`s acknowledgement of Singapore`s traditional right in the South China Sea.

The two countries have agreed to continue the bilateral talks at the end of August and the beginning of September 2006 in Indonesia to seek solution to the difference, according to Juwono.(*

RI'S FIRST RETAIL BONDS UP FOR GRABS

2006-07-18T20:15:00.000-07:00

Urip Hudiono, The Jakarta Post, Jakarta

The government officially launched Indonesia' first-ever retail bond sale Monday.

Individual investors interested in the three-year treasury bonds, which carry a 12.05 percent fixed coupon, can place minimum orders of Rp 5 million (US$543) with designated sales agents up until Aug. 4. The actual auction of the bonds will be held on Aug. 9.

Speaking during the launch ceremony, Finance Minister Sri Mulyani Indrawati said she expected the introduction of retail bonds would help encourage the development of an "investment society" in Indonesia, in which citizens could participate in helping finance the country's development needs through capital market investments, besides the paying of taxes and depositing of funds in the banking sector.

The right to purchase the bonds is limited to Indonesian citizens, although non-nationals will be able to buy them later on the secondary bond market.

"All the proceeds of the bond sales will go into the state budget so that investors can rest assured that their money is being used accountably ...," Mulyani said.

The government has set an indicative target of Rp 2 trillion from the retail-bond sale, which will form part of the total Rp 35.8 trillion in expected net proceeds from government bond sales this year. The proceeds will be used to help finance the budget deficit, now expected to come in at Rp 37.6 trillion, or 1.2 percent of gross domestic product.

Mulyani was upbeat about the market's appetite for the retail bonds, pointing to their main attraction for individual investors, namely, higher yields compared to bank deposits, and potential capital gains if their prices rise in trading on the secondary bond market.

"We will see how the market actually responds to this new investment instrument. What is important now is that all the necessary information be made available to potential investors," Mulyani said, adding that the government intended to regularly offer retail bonds in the future.

Fully informing the investing public during the three-week-long offer period was crucial, the Finance Ministry's director of bond management, Rahmat Waluyanto, explained, as the government did not want the retail bond market to experience a similar crash to that seen by the country's mutual fund industry last year. This crash was due to a lack of understanding on the part of investors about capital market investment.

"Investing in bonds and mutual funds is different from stocks, which are higher risk and tend to be shorter term in nature. Investors should have long-term horizons for bonds and mutual funds, and avoid being panicked by market fluctuations," he said, explaining why the government had decided to postpone the retail bond auction from Aug. 2 to allow the sales agents more time to better inform investors.

Meanwhile, Bank Indonesia (BI) Governor Burhanuddin Abdullah welcomed the launching of the retail bonds, saying they would provide an alternative investment instrument for the public, and would eventually help reduce the central bank's monetary costs.

"People can invest their money somewhere else besides deposits, the funds from which are sometimes used by the banks to buy our bills," he said.

High inflation and interest rates have recently eroded the demand for loans, encouraging lenders to put their excess funds into BI money-market bills.

The government also hopes to lower its borrowing costs following the introduction of retail bonds as local bonds are not subject to the same risks of fluctuation associated with overseas bonds and loans.

Bank Mandiri president Agus Martowardojo said that the retail bond sale was timely given the current bullish bond market and that the coupon rate was attractive. However, he said that the government needed to clarify its policies on taxation and funding sources to eliminate investor doubt.

Mandiri is one of the 11 designated sales agents for the bonds , with the others being Danareksa Sekuritas, Bank Bukopin, Bank Permata, Bank Danamon, Trimegah Securities, Bank Mega, Bank NISP, Bank Panin, Citibank and Valbury Asia Securities.