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.(*)