Japfa builds new factories to expand capacity

The Jakarta Post, Jakarta

Publicly listed poultry and aquaculture firm PT Japfa Comfeed Indonesia is enhancing its production capacity by constructing two new factories at a total cost of Rp 100 billion (US$11.3 million).

To help finance the expansion, the company will issue its first bond next month. The bond will be worth Rp 500 billion, have a maturity of five years and carry a fixed annual coupon of between 12.33 and 12.87 percent, said Japfa director Herry Wibowo on Wednesday.

The bond, which will be underwritten by PT Trimegah Securities and PT Bahana Securities, will be on sale to the public from June 26 to 28, and will be listed on the Surabaya Stock Exchange on July 5.

The new factories, which are currently under construction, are located in Bati Bati, South Kalimantan, and in Padang, West Sumatra.

"The Bati Bati plant is expected to commence operations by the end of this year, while the Padang plant, which is still in the early stages of construction, will begin operations in the first quarter of 2008," Herry said.

Herry added that besides financing the expansion, his company would use half of the proceeds from the bond issue to refinance its debt of Rp 250 billion and strengthen its working-capital base.

With the establishment of the two new factories with a total capacity of 360,000 tons per year, the company's poultry processing capacity will increase to 2.08 million tons from the current 1.72 million tons.

Japfa, which currently operates seven poultry processing plants in Java, Sumatra and Sulawesi, is also building a corn processing plant in Grobogan, Central Java, to supply raw materials to its poultry processing factories.

Besides processing poultry and breeding day-old-chicks, the company also runs an aquaculture business that produces shrimp and fish food with a total annual capacity of 148,800 tons.

Its net profit reached Rp 238 billion last year, almost five times its 2005 profit of Rp 41 billion.

Japfa's head of treasury and financing, Putut Djagiri, said that the company was looking to Rp 7 trillion in sales and Rp 245 billion in net profit this year.

Austria interested in investing in biofuel in Indonesia

Jakarta (ANTARA News) - Austria was interested in investing in a biofuel industry development, both from crude palm oil and jatropha curcas plants, according to a diplomat.

Austrian Ambassador to Indonesia Klaus Wofer made the statement in Purwakarta, West Java, on Friday after attending the inauguration of a waste treatment industry of PT South Pacific Viscouse (SPV), which is a rayon fiber producer of Austria.

"A number of Austrian companies are interested in investing in biofuel sector as the demand for biofuel in Europe is increasing," Ambassador Wofer said.

He said that biofuel development was very potential to be carried out in Indonesia for exports to European countries.

The ambassador said that a number of Austrian businessmen would hold a seminar in Indonesia in October and November this year on biofuel development by presenting Austrian experts as speakers.

The Austrian Ambassador said that his country`s total investment in Indonesia currently reached up to US$300 million. One of the Austrian investments was PT South Pacific Viscouse, which is a subsidiary of Lenzig AG.

Other Austrian investments in Indonesia included those in the sectors of environmental technology, medical equipment, and clean air quality technology.

Plan to build hydro-power plant in Jambi no lie, governor

Jambi (ANTARA News) - Jambi Governor H Zulkifli Nurdin said that a plan to build a hydropower plant (PLTA) in Kerinci District, Jambi, was not a lie as work to set up a 180-MW capacity PLTA in the district was officially begun earlier this week.

The governor said he had laid the first corner-stone of the project in Muaraimat village, Batang Merangin sub district, Kerinci district, on Friday.

He said PT Bukaka Teknik Utama which was taking over the project from a Norwegian investor was sending heavy equipment to the location to begin building the plant this week.

The failure of the Norwegian investor (PT Statcraf SF) to realize the hydropower plant had caused a number of community leaders to criticize the planned project, saying it was a "public lie."

The governor said the idea to develop the hydropower plant came in 1983 when JICA of Japan made a study of the possibility to build such a plant in areas around the Kerinci Sablat National Park (TNKS).

The same study was later resumed by the World Bank in 1985. In 1999, the Jambi regional government invited the Norwegian investor and signed a Memorandum of Understanding to build the plant.

The PLTA which would be developed based on the agreement with the Norwegian company would have a design capacity of 250 MW.

But the company failed to realize the plan in connection with the political conditions which was developing in the country at that time

China finds its way to space despite U.S

The nation seeks prestige and profit with a plan to launch satellites and probes.

Jim Yardley, The New York Times

Orlando Sentinel, May 26, 2007

BEIJING -- For years, China has chafed at efforts by the U.S. to exclude it from full membership in the world's elite space club. So, lately, China seems to have hit on a solution: create a new club.

Beijing is trying to position itself as a space benefactor to the developing world -- the same countries, in some cases, whose natural resources China covets here on Earth. The latest, and most prominent, example came last week when China launched a communications satellite for Nigeria in a project that serves as a case study of how space has become another arena where China is trying to exert its soft power.

Not only did China design, build and launch the satellite for oil-rich Nigeria -- it provided a huge loan to help pay the bill. China also has signed a satellite contract with another major oil supplier, Venezuela. It is developing an Earth-observation satellite system with Bangladesh, Indonesia, Iran, Mongolia, Pakistan, Peru and Thailand. And it has organized a satellite association in Asia.

Read More ....

Indonesia Bakrie wins M'sian deal

The Brunei Times, 27-May-07

Kuala Lumpur (Reuters): Indonesia's PT Bakrie & Brothers Tbk has won a contract to supply steel pipes for the development of a US$7 billion crude oil pipeline across the northern part of peninsular Malaysia, a source familiar with the plan said yesterday.

Bakrie, a diversified company controlled by the family of Indonesian chief social welfare minister Aburizal Bakrie, is part of a consortium that will build the 320-km pipeline, providing a link between Middle East producers and east Asian consumers. The government earlier this month approved the project which includes a new refinery at its western end and huge storage tanks for use by Asian nations. Unlisted local firm Trans-Peninsula Petroleum is the project developer while the other partners are Malaysian engineer Ranhill Bhd, Saudi Arabia's Al-Banader International Group and Indonesia's PT Tripatra, a unit of integrated energy group PT Indika Inti Energi. Tripatra will manage the project.

Further details are expected to be announced tomorrow. Trans-Peninsula Petroleum will invest US$7 billion over eight years to build the pipeline, helping ships avoid the busy Malacca Strait, conduit for over a quarter of the world's seaborne crude. The first phase, costing US$2 billion, could transport two million barrels per day, the source said, which would rank it among the largest oil pipelines in the world. The source said the equity structure has not been finalised.

Construction of the pipeline is expected to begin next year, the source said, adding that project funding plans include possible listing and tapping local and offshore debt markets. Oil tankers currently take Middle East crude through the Malacca Strait and around Singapore before sailing to ports in Japan, China, and South Korea.

The pipeline would stretch from the west coast town of Yan, which the government has designated a petroleum development zone, to the small fishing port of Bachok in the east.

Nuclear plant received coldly

Suherdjoko, The Jakarta Post, Salatiga

The government's plan to build a nuclear power plant was put under the microscope again as experts said the plan was criminal, would put thousands at risk and did not make any sense.

Philosophy lecturer Franz Magnis-Suseno SJ said the plan was criminal because it could cause a disaster of huge proportions.

"Why does such a risky power plant have to be built in Indonesia?" Franz said during a seminar focused on analyzing critically nuclear power plant construction in Indonesia.

"If it's being built on the north of Mount Muria in Jepara (Central Java), how will residents suffer when there's a nuclear disaster like Chernobyl?

"If this kind of disaster takes place in Muria, the nuclear radiation might reach Semarang.

"So I doubt residents can be persuaded by the government to take the risks," he said from the Salatiga-based seminar in Central Java.

President Susilo Bambang Yudhoyono last year announced plans to start building a nuclear power plant in 2010 to become operational by 2016.

The power plant would be the first of its kind to provide energy to the Indonesian public and industrial sectors.

It is expected to meet four percent of the total power demand in Java, Madura and Bali -- an energy demand expected to reach 175 terawatt hours (TWh) by 2015.

Nuclear energy was essential for the country's development given Indonesia would need an additional 1,500 to 2,000 megawatts (MW) annually after 2016, the government said.

However, Franz said he feared widespread corruption practices for most projects, including the government's.

He said lowering the quality of building materials was just one way the project would suffer corruption.

Franz asked the seminar to consider the busway road construction project as an example and said many roads in this project were already damaged because of corruption and poor building materials, just six months after operations had commenced.

"So nuclear power plant construction should not start until Indonesia successfully fights corruption," Franz said.

Coordinator of Working Group on Power Sector Restructuring Fabby Tumiwa said during his seminar presentation the government had conducted no social study on the plan and had not sought approval from the public.

"The big risk of a nuclear power plant is that it will get a lot of attention," he said.

Fabby referred to a document from the International Atomic Energy Agency and reminded the audience that, "nuclear energy poses special risks to the health safety of persons and to the environment: risks that must be carefully managed".

South Pacific awaits green light to lift fiber output

The Jakarta Post, Jakarta

PT South Pacific Viscose (SPV), the country's largest viscose fiber manufacturer, expects to increase production next year amid rising demand for fibers on both the global and domestic markets.

SPV said Friday it was negotiating with its parent company -- Austria-based Lenzing, the world's leading cellulose fiber producer -- to set up a new production plant.

"We are hoping for the green light from SPV's owners by the second half of this year," said president director Guenther J. Krohn after the inauguration of SPV's expanded wastewater treatment plant and a new waste gas treatment plant at its factory in Purwakarta, West Java.

"It's hard to convince SPV's owners as (the new line) will require a major investment," he added.

SPV, which currently produces 150,000 tons of viscose fibers per annum, is planning to operate at its full capacity of 154,000 tons per annum by the end of this year, Krohn said.

If SPV received the go-ahead from its parent, he said, it would need US$120 million to build a new plant with a capacity of another 50,000 tons of fiber per annum.

SPV, Krohn said, had increased its production capacity over the past four years from 120,000 tons per annum to the current level through a process of "debottlenecking and improving machinery efficiency without the need for a major investment."

The fiber SPV produces is used as raw material by garment and yarn manufacturers, as well as by non-woven industries like the manufacturers of beauty and medical products.

According to the Industry Ministry's director general for metal, machinery, textile and miscellaneous industries, Ansari Bukhari, who visited the factory for the inauguration ceremony, the country's two cellulose fiber producers -- SPV and PT Indo Barat Rayon -- only supplied 110,000 tons per annum to the domestic market, amounting to only half the country's demand, which amounts to some 200,000 tons a year.

SPV's Southeast Asia marketing manager Ida Purnama Sirait said the country imported its remaining fiber needs from Thailand, India, China and Taiwan, with the latter supplying the most.

Meanwhile, Ansari said he hoped the two domestic producers could further increase production and pay more attention to the domestic market as SPV only sold 60 percent of its production on the local market, and Indo Barat, which produces around 100,000 tons of fiber per annum, only sold 80 percent.

High fiber prices on the global market, he said, had encouraged producers to sell their output overseas.

Ida said that fiber on the domestic market was priced at around $1.7 per kilogram last year and $2 this year, while fiber sold on the world market for between $2.70 and $3.

"Fiber prices are rising as the prices of pulp, the raw material for fibers, are going up, combined with high global oil prices and high demand for fiber," she said.

Austrian Ambassador to Indonesia Klaus W”lfer, who was also at the inauguration ceremony, said Austrian companies had invested a total of $300 million in Indonesia, with SPV being the biggest investor.

Blue Bird to purchase 740 Mercedes Benz cars

The Jakarta Post, Jakarta

Taxi firm Blue Bird Group will invest Rp 320 billion (US$36.7 million) over the coming five years to procure 740 Mercedes Benz C-Class cars to replace its existing Silver Bird luxury taxis.

The replacement program will be carried out in stages, starting with the initial purchase of 300 taxis worth Rp 130 billion, chief commissioner Chandra Suharto said Friday during a ceremony marking the handover of the first Mercedes cars from PT Daimler Chrysler Indonesia, the local unit of Germany automaker Daimler Chrysler.

"As we prioritize the safety and comfort of our customers, we have selected Mercedes C Class cars to replace all of our existing Silver Bird taxis as we know that Mercedes vehicles are durable and reliable. In addition, Mercedes has a well-established brand image," he said, adding that Blue Bird currently operated a 740-vehicle Silver Bird fleet in Jakarta.

The company, the only taxi operator providing a luxury service, currently uses Nissan Cedrics and primarily serves serve star-rated hotels around the city.

Blue Bird president director Purnomo Prawiro said that the new Mercedes taxis were expected to hit the road by the end of next month after being equipped with taximeters.

He said that although the new cabs would use more gasoline than the existing ones, the company did not intend to increase fares.

"We are not going to increase fares at the moment, but we might do so in the future," he said.

Silver Bird taxis currently have a flag-fall of Rp 6,000 for the first kilometer, and Rp 3,200 for each subsequent kilometer.

Besides Silver Bird taxis, the company also operates about 10,000 Blue Bird taxis with a flag-fall of Rp 5,000 and a per-kilometer charge of Rp 2,500.

For Daimler Chrysler, this marks its first foray into the Indonesian taxi market.

President director Rudi Borgenheimer said that his firm was proud to supply its Mercedes C Class taxis to serve discerning taxi customers in Indonesia.

VW may join Japanese rivals in Indonesia

nzherald.co.nz

5:00AM Saturday May 26, 2007

The world's fourth-largest carmaker, Volkswagen, is considering setting up a production base in Indonesia, a senior government official has said.

Budi Dharmadi, a director general at the trade ministry, said the company had expressed interest during a recent meeting with Trade Minister Fahmi Idris.

"They are interested in entering the Indonesian market. It might be in the form of investment in an assembling plant. Right now, they are still conducting a study for the possible investment,'' Dharmadi said.

No financial details were available.

The Indonesian automotive market is dominated by Japanese firms, with Toyota holding the number one spot in sales. Toyota, Honda, Nissan, Daihatsu, Mercedes-Benz and BMW have production bases in the country.

Vehicle sales in the world's fourth most-populous nation plunged by around 40 per cent last year after the government more than doubled domestic fuel prices in October 2005.

Sales reached a record high 533,910 units in 2005 before dropping to 318,883 units last year. Analysts predict volume may reach 350,000-400,000 units this year.

CP Prima wins Dipasena for $76m

The Jakarta Post, Jakarta

Local aquaculture firm PT Central Proteinprima (CP Prima) and its parent company, Thai agribusiness giant Charoen Pokphand, both operating under the Neptune consortium banner, have finally won the tender for the sale of Southeast Asia's largest shrimp farming firm, PT Dipasena Citra Darmaja.

State Asset Management Company (PPA) president Syahrial said in a statement released Thursday that the consortium had bid Rp 688.12 billion (US$76 million) for Dipasena, exceeding the minimum bid of $53.5 million set by the government.

The winner is also required to invest Rp 1.7 trillion on developing Dipasena.

Finance Minister Sri Mulyani Indrawati said the PPA had carried out the sale of Dipasena in line with all the relevant procedures and having consulted with all the relevant parties.

Financial advisor to the sale was Ferrier Hodgson, while lawyer Marsinih Martoatmodjo Iskandar Kusdihardjo acted as legal advisor. Meanwhile, the Attorney General's Office and the State Finance and Development Comptroller (BPKP) served as independent advisors.

The final bids for Dipasena were assessed by legal expert Pradjoto, economist Chatib Basri and the Maritime Affairs and Fisheries Ministry's director general for aquaculture, Made L. Nurdjana.

CP Prima outbid competitor PT Kemilau Bintang Timur, a Makassar-based major seafood processing firm.

Dipasena's acquisition will strengthen CP Prima's position as the world's largest aquaculture firm, as well as Charoen Pokphand, which owns a stake in CP Prima and in the nearby Bratasena shrimp farm.

Dipasena boasts 186,000 hectares of shrimp ponds run collaboratively with some 11,000 local shrimp farmers under a "core-plasma" scheme, in which the company acts as a nucleus providing loans to the farmers, and they in turn sell their produce to the company.

Before the crisis, Dipasena was one of the biggest shrimp producers in the world, with output standing at some 19,854 tons worth $167 million in 1996.

The PPA has been managing Dipasena, which it took over from Gajah Tunggal Group tycoon Sjamsul Nursalim as part of the settlement of his Rp 28 trillion debt to the state following the economic crisis of 1997 and 1998.

In September 2005, the PPA awarded an exclusive option to PT Recapital Advisors to take over Dipasena, which it later revoked after the company failed to abide by its commitment to inject fresh capital into the company and settle the company's loans to local farmers.

Meanwhile, CP Prima director Mahar Sembiring said the company would immediately implement a genuine partnership scheme with Dipasena's existing plasma farmers.

It has also assigned construction firms PT Truba Alam Manunggal and PT Wijaya Karya to assess Dipasena's production infrastructure, and conduct any necessary upgrades.

Govt to privatize another 10 state-owned enterprises

Jakarta (ANTARA News) - The government, in this case the state minister for state enterprises, will soon propose the privatisation of another ten state companies following approval to privatise 12 state-owned enterprises, a minister said.

Previously, the House of Representatives (DPR) had approved a proposal to privatize three state enterprises, state minister for state enterprises, Sofyan Jalil said here on Friday.

"I will try to privatize 10 state-owned enterprises next year and hopefully the good ones will be privatized by way of an Initial Public Offering (IPO)," Sofyan Jalil said in responding questions from the press.

He declined to elaborate on the 10 state companies, and he will give details only after their privatisation has received approval of the Hosue of Representatives (DPR).

The proposal is submitted by the state ministry of state companies to the privatisation committee chaired by coordinating minister for economy Boediono.

Should the committee accept the proposal, I will discuss it with the House including total number of of shares to be relinquished.

Under the 2007 privatisation program, 15 of the proposed 17 state firms will be divested, the two proposed firms are Krakatau Steel and BTN.

Three of the 15 state-owned firms would be divested by means of a going-public scheme, namely PT BNI Tbk, PT Wijaya Karya and PT Jasa Marga.

Another five firms which will be divested by strategic sales or going-public include PT Garuda Indonesia, PT Merpati Nusantara Airlines, PT PNM, PT IGLAS, and PT Cambrics Primissima.

One state-owned firm, PT ISI will be liquidated because it is impossible to privatize it.

Meanwhile in the privatisation of six other companies, namely PT Jakarta International Hotel Development, PT Atmindo, PT Intirub, PT Prasadha Pamunah Limbah Industri, PT Kertas Blabak, and PT Kertas Basuki Rahmat, the government`s stake in the companies will have to be relinquished.

The minister said that the privatisation will support and benefit the state-owned firms.

ADB and Muslim Aid Working Together to Rebuild Houses in Aceh

Asia Development Bank

ADB AND Muslim Aid, a United Kingdom-based civil society organization commenced a joint $4.9 million housing program with the stone-laying ceremony in Meunassah Bueng village in the Pidie District, where 222 new houses will be built.

“This program is a unique one under which ADB is providing the funds for Muslim Aid to build 686 new houses across Biruen, Pidie, Aceh Utara, and Lhokseumawe,” said Pieter Smidt, Head of ADB’s Extended Mission in Sumatera, during the ground-breaking ceremony. “Also, our presence in Meunassah Bueng demonstrates ADB’s continued commitment to reach out to the tsunami victims in the more remote areas of Aceh province.”

ADB is providing $72.5 million to rehabilitate and reconstruct houses and community infrastructure in Aceh and Nias following the 2004 Tsunami and March 2005 earthquake.

The assistance is part of a $291 million ADB grant to the Government of Indonesia that is helping to rebuild the areas devastated by the earthquake and tsunami disasters.

Through the “on-budget” program implemented by BRR, the Aceh and Nias Rehabilitation and Reconstruction Agency of the Government of Indonesia, ADB has completed 900 houses while another 1,360 units are under construction. Construction of another 500 new houses will start construction soon in Nias.

Under its “off-budget” program implemented by UN-HABITAT and four NGOs, including Muslim Aid, German Agro Action, Help eV, and Cordaid, ADB is financing the construction of about 3,000 new houses, and the rehabilitation of about 1,050 houses across Aceh and Nias including Simeulue.

“Community consultation during project preparation and implementation is an essential element of the ADB financed housing program. “The finished structure”, according to ADB’s Housing and Spatial Planning Advisor, Rehan Kausar, “should reflect the desires of the people. Moreover, the houses should be habitable and the program therefore provides essential community infrastructure including much needed water and sanitation facilities”. He further elaborated that land titling and gender promotion figure high within the housing program.

“While we are grateful that ADB has put its trust in Muslim Aid for the implementation of a quality housing program by providing us the funds, we on our part will leave no stone unturned to meet the standards mandated by ADB and BRR”, said Fadlullah Wilmot, Country Director for Muslim Aid in Indonesia.

ADB's multi-sector tsunami for Indonesia assistance package covers agriculture, fisheries, irrigation, micro and small enterprise development, housing, water and sanitation, health, education, transport, power, spatial planning and environmental management, and fiduciary oversight.

The $291 million ADB grant is financing the Earthquake and Tsunami Emergency Support Project (ETESP) to support disaster management, reconstruction and rehabilitation in affected areas of Aceh and North Sumatra. In addition, ADB has contributed a $10 million grant to the Multi-Donor Fund for Aceh and Nias.

About ADB

KL, RI reaffirm biodiesel plans despite industry uncertainty

The Jakarta Post

KUALA LUMPUR (AP): The Malaysia and Indonesian governments Friday reaffirmed plans to set aside a combined 12 million metric tons of palm oil a year for biodiesel production despite uncertainty about the future of the industry.

The world's two largest palm oil producers said in 2006 - when biofuel projects were flourishing - they would each set aside 6 million tons of palm oil a year. Since then crude oil prices have fallen from their highs and palm oil prices have soared to nine-year highs, putting many biodiesel projects in jeopardy.

"We are far from reaching 6 million tons. What we are saying...is that 6 million tons is our commitment. The rest is up to the private sector," said Peter Chin, Malaysia's Plantation Industries and Commodities Minister.

"If the present (palm oil) price is deemed too high, then manufacturers will have to make their own commercial decisions whether to proceed," he said.

Chin spoke with reporters after a delegation meeting with Indonesian Agriculture Minister Anton Apriyantono.

Both countries have agreed to maintain the allocation despite renewed doubts about the future of biodiesel, Chin said.

Malaysia has approved more than 90 biodiesel manufacturing projects but only six are in operation so far, producing a combined 107,000 tons in the first quarter of 2007, officials said.

Anton didn't provide any details on biodiesel production in Indonesia.

Both ministers said their governments would step up a campaign to counter allegations in the Europe and the U.S. that the expansion of oil palm plantations has caused massive deforestation and loss of habitat for the orangutan in Southeast Asia.

Over the next two months, government and industry officials from both countries will meet legislators and nongovernment organizations in Europe to allay concerns about the impact of plantation growth on the environment.

Yusof Basiron, chief executive of the Malaysian Palm Oil Council, said about 500,000 tons a year of potential palm oil sales have been lost because of environment-related concerns.

Anton said criticism of the industry was unfair as palm oil wasn't the main cause of deforestation in the region.

"(In Indonesia), about 64 million hectares of forest have been opened and oil palm plantations account for only 5.5 million hectares. The (loss) of forest is...mainly because of illegal logging," Anton said.

"So, it's not true at all that orangutan have diminished because of palm oil.

PLN establishes technical cooperation with Japanese company

Jakarta (ANTARA News) - State-owned power company PT PLN established a technical cooperation with Japan`s Electric Power Development Co. Ltd. to raise the coverage of electricity distribution to regions from the current 54 percent to 100 percent by 2020.

The cooperation agreement was signed on Wednesday at the PLN head office by the power utility`s president director Eddie Widiono and J-Power President Yoshihiko Nakagaki, PLN spokesman Ario Subijoko said in a press statement received here on Thursday.

He said the agreement will be effective for two years and was extendable upon the two parties` aggreement.

He said the agreement was the two parties` initiative with regard to especially developing power generation and transmission technology.

Under the agreement PLN wishes to learn more from Japan about electricity technology that has been very advanced in that country, while several training and study programs will be held for PLN engineers including on High Voltage Direct Current transmission technology development.

Currently PLN and J-Power are still studying the possibility of utilizing sea water for generating electricity (pump storage). He said if based on the result of a study, the technology was feasible, then PLN would in the near future conduct further study and make the design which would be followed by its construction.

Another technology to be jointly studied is supercritical technology for geothermal power generators for high efficiency and environmental friendliness.

By applying the technology, fear for inefficiency and pollution from the operation of large-scale coal-fired power plants, could be avoided, he said.

J-Power owns and operates 17 GW power plants. It has built and operated coal-fired power plants using a new technology as well as hydro-electric power plants and HVDC transmission lines.

The company has been active in the past 50 years investing in countries other than Japan and cooperating with power companies in consultation activities.

In 2004 it conducted a privatization program and promoted the application of the latest technology to power generation to support sustainable development of the electricity sector.

Japan offers to cooperate with RI in nuclear technology development

Tokyo (ANTARA News) - The Japanese government has offered to cooperate with Indonesia in nuclear technology development, Capital Investment Coordinating Agency (BKPM) Chief Muhammad Luftie said here on Friday.

He said the offer was conveyed by Japan`s Economy, Trade and Industry Minister Akira Amari to visiting Indonesian Vice President Jusuf Kalla in Tokyo on Friday.

According to Lufti, the nuclear technology issue was an old discourse which continued to develop but it had to be admitted that the use of nuclear energy was inevitable in the future.

"Japan did offer cooperation in nuclear technology development," Lutfi said, adding that technical discussions to follow up Japan`s offer would be done in a Working Group.

He said besides offering cooperation in nuclear technology development, Japan had also expressed hope that Indonesia would continue to export gas to Japan.

But Vice President M Jusuf Kalla had made it clear that Indonesia also needed gas supply for domestic consumption.

On the other hand, Lutfi said, Japan and Indonesia would also cooperate in development of alternative energy sources such as geothermal energy and hydroenergy.

Meanwhile, Indonesian Trade Minister Mari Elka Pangestu said the volume of Indonesia`s gas exports to Japan was not discussed in Kalla`s meeting with Akira Amari.

But in an interview with Mikkei, Vice President Jusuf Kalla had said Indonesia would probably increase its gas exports to Japan to over 8 million tons on condition that Japan also invest in gas exploration ventures in Indonesia.

Davomas to boost production by 40%

JAKARTA (The Jakarta Post) : PT Davomas Abadi, the biggest cocoa butter and cake producer in Indonesia, is set to increase its production by 40 percent at the end of this month to meet rising global demand.

Davomas has established two new production lines in addition to its seven existing ones at its factory in Tangerang, west of Jakarta, to boost its production from 100,000 tons to 140,000 tons per year.

"The overseas demand is increasing and our current production can no longer satisfy demand," director Suhanih told The Jakarta Post on Wednesday.

Davomas, which has a of 3.5 percent share of the global market, exports all of its output to the European and United States markets for chocolate production.

The investment of US$50 million on the new production lines was funded by $150 million in proceeds from the sale of bonds on the Singapore Stock Exchange last year. The remainder of the proceed was used to repay debt and to strengthen the company's working capital.

Indonesia is the third largest cocoa-bean producer after Ivory Coast and Ghana.

Australia aids Lombok community

The Jakarta Post

DENPASAR, Bali: Australian Consul for Bali Adelaide Worcester has visited Lombok island in West Nusa Tenggara to deliver financial aid to community projects under the Consulate General's Direct Aid Program.

The first project, managed by Al Wustho Foundation, focuses on the education and empowerment of poor children in the Bagek Papan village of East Lombok.

The aid amounted around Rp 45 million and will be used to procure school furniture, laboratory tools, books and educational toys.

The second project is managed by Amanah Learning Center in Gunung Sari village, West Lombok. The Australian government provided Rp 36 million to procure sewing machines for training.

"I am so impressed by the training activities and to see their products. These young women are already able to produce quality shirts and school uniforms," commented the Consul.

In addition to the projects, the Consulate General of Australia also held an English Speech Contest for students of Islamic boarding school Madrasah Aliyah. Participants delivered speeches about environmental conditions in Lombok. A similar program will be held between June 16 and June 18.

Serang dump a new site for Jakarta garbage

Multa Fidrus, The Jakarta Post, Banten

Serang regency in Banten, about two hours east of the capital, is planning to build a new garbage dump in Bojong Menteng, Tanjung Teja district.

Deputy regent Andy Sujadi said Tuesday the dump was designed to accommodate more than 6,000 tons of Jakarta's waste per day.

"We're opening our door to Jakarta's garbage... as long as there's compensation to the region from the Jakarta administration."

Andy explained that the 119.5 hectare dump site will apply a sanitary landfill system that will separate organic and non-organic waste.

The dump, which will be located next to the railway connecting Merak and Jakarta, will produce fertilizer and other products. The processing will be handled by local residents.

"We certainly hope the final dump site will open job opportunities. (We also hope) the application of the sanitary landfill system will be able to minimize environment impacts," Andy said.

Ubaidillah Kabier, the chairman of Commission B at the regency's legislative council, which handles environmental issues, said the council had no objections to the administration's plan to accommodate Jakarta's garbage.

"But there should be an agreement made with the community living in near the dump and a fee (should be paid by Jakarta) to cover the operational costs of the dump," he added.

Ubaidillah said the regency administration need to settle emerging problems with land acquisition soon.

"If these problems are ignored, they will hamper the construction project itself. The administration must also soon disseminate information on the construction of the dump to the community."

A number of residents living near Bojong Menteng have rejected the administration's plan to build the dump.

"It would affect our health," said Marhin Sofawi, a neighborhood unit chief at Bojong Menteng village.

"Many residents intend to move, but they want the administration to find them new houses."

The regency administration has allocated Rp 3 billion from this year's budget to release 30 hectares of land occupied by residents, while the physical construction of the dump, costing around Rp 100 billion, is being financed by the World Bank.

Kobe Steel plans Indonesia factory to improve coal quality

Jakarta (ANTARA News) - Kobe Steel Ltd. said Wednesday it will break ground on a large demonstration plant Thursday in the Satui mine in southeastern Kalimantan, the Indonesian part of the island of Borneo, that will improve the quality of low-grade brown coal found in abundance in the area.

Under the project estimated to cost 8 billion yen, the operation is slated to begin on a commercial basis by the second quarter of 2010 with a view to selling upgraded coal for use in power generation, the company told Kyodo.

The demonstration plant is scheduled to come onstream in October next year, processing 600 tons of coal per day and the daily output is expected to reach 5,000 tons when the operation hits its stride.

Low-grade coal in the area generates little heat because of its high moisture content. Kobe Steel aims to evaporate the moisture by heating the coal with oil

in a manner similar to the way food is fried to prepare tempura dishes, company officials explained.

The heat output of the Indonesian coal is projected to increase 50 percent or so as a result.

Japan is the world's largest coal importer and is now finding it vitally important to secure the supply of quality coal it needs because China is importing ever greater quantities of coal.

Indonesia, meanwhile, became a net importer of oil in 2004 because of growing domestic oil demand, even though it is also an oil producer. The country is concerned that its reserves of high-grade coal could run out in several years' time.

Tokyo and Jakarta therefore have been backing the Kobe Steel project to turn low-grade coal into quality coal.

The upgraded Indonesian coal should produce less ash and sulfur than higher-grade Australian coal, which is now commonly used in Japan, Kobe Steel said.

Lippo Karawaci launches US$667 mln property project in Jakarta

Jakarta (ANTARA News/Asia Pulse) - Listed property company PT Lippo Karawaci will launch a Rp6 trillion (US$667 million) property project in South Jakarta this year.

The project over a 12-hectare plot of land will include three luxury apartment towers, a 29-floor hotel of Aryaduta Regency, a 250-bed hospital of Siloam Hospital, a convention center and an private school to be run by the Pelita Harapan Group.

Funding for the project is from the real estate investment trust (REIT) it issued in Singapore in December, 2006, the company said.

President presents financial aid for renewable energy source projects

Bandung, West Java (ANTARA News) - President Susilo Bambang Yudhoyono here on Thursday handed over financial assistance amounting to Rp5,541,810,000 in support of several renewable energy source projects in West Java Province.

The funds would be used among other things to support the development of a solar power plant in Cianjur, micro-hydro power plants in Tasikmalaya and Garut, and a biogas power plant in Bandung District.

The funds would also include scholarships for 55 technology university students, assistance for Nurul Fallah and Nurul Bayan Islamic boarding schools for the development of renewable energy sources and for three small- and medium-scale businesses running micro-hydro workshops.

The assistance was presented on the sidelines of the national leadership meeting of the Indonesian Engineers` Association (PII), which was earlier officially opened by the President.

On the same occasion, Minister for Energy and Mineral Resources Purnomo Yusgiantoro who is concurrently chairman of the PII Advisory Council, awarded medals to nine engineers for their contributions in the development of renewable energy sources.

The award recipients included Prof Dr Eng. Kamaruddin Abdullah (of the Bogor Institute of Agriculture - IPB), Dr Eng Hasan Hambali (Heritage Foundation), Eng. John Budi Harjanto (Atmajaya University), Eng. Jimmy Priatman (Petra Surabaya University), Dr Eng. Eddy Prianto (Diponegoro University), Eng. Soekartono, Eng. Djoni Bustan (Sriwijaya University) Eng. Edy Permadi (PT Cihanjuang Bandung), and Eng. Tri Mumpuni.

Texas Pacific Group banks on Indonesia

Posted May 22nd 2007 4:23PM by Tom Taulli

Bloggingstocks.com

As seen with Blackstone's mega investment from the Chinese government, private equity is setting its sights on Asia. While there are certainly risks, the rewards can be great.

Interestingly enough, since the mid 1990s, the Texas Pacific Group (TPG) has been a big player in Asia. According to a report in the Wall Street Journal (subscription required) the firm has actually purchased a 72% stake in PT Bank Tabungan Pensiunan Nasional, which is a bank in Indonesia. In fact, the Indonesian government will maintain a stake in the bank.

The price tag is about $200 million or so -- a fairly small amount for TPG.

Yet, the deal should make it easier to get a footprint in the Indonesian market. It's also a sign that the political situation has stabilized. And with economic growth at 6%+, it should be a lucrative place for dealmaking.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Indonesia to have first coal liquefaction plant in 2009

The Jakarta Post, Jakarta

Indonesia, the world's largest coal exporter, is set to build its first coal-liquefaction plant in 2009 at an estimated cost of US$1.3 billion.

A number of coal-mining firms and state-owned oil company Pertamina signed a memorandum of understanding Tuesday to set up a consortium to build the plant, which will convert coal into liquid fuels like gasoline and diesel, and have an initial capacity of 13,500 barrels per day.

Among the firms signing the MoU were the country's biggest coal miners -- PT Bumi Resources, PT Adaro, PT Berau Coal and PT Bukit Asam.

The plant, which will be built either in Kalimantan or South Sumatra, is expected to be in commercial operation by 2013.

Bukin Daulay, the director of the Energy and Mineral Resources Ministry's Mineral and Coal Technology Research and Development Center, said the Indonesian government would collaborate with the Japanese government in providing the technology and arranging financing for the plant.

"For the initial stage, the Japanese government will donate a processing support unit worth $110 million to us," Bukin said. "We will also adopt the technology employed in Japan's coal liquefaction pilot project in Victoria, Australia, which can produce 200 barrels of fuel per day."

Besides technological assistance, Indonesia would also receive financial backup from the Japan Bank for International Cooperation (JBIC), which would provide commercial loans to support the project.

JBIC international finance department director Shin Oya said that the bank would provide up to 60 percent of the total loans needed for the project, while private Japanese banks would provide the rest.

Representatives of the newly established consortium and the Indonesian and Japanese governments will meet in Bali in early June to further discuss the financial arrangements and incentives for the construction of the plant

Coal liquefaction is one of the alternative energy sources that will be developed by the government as part of its efforts to decrease its dependency on oil-based fuels.

Under the government's energy policy, coal liquefaction must account for 2 percent of the total national energy mix by 2025.

Bukin said that in order to meet the 2 percent target, Indonesia's proposed coal liquefaction plants would have to increase their output to 189,000 barrels per day by 2025 from an initial 13,500 barrels per day.

He added that the government planned to increase capacity to 27,000 barrels per day by 2017 at a cost of $2.1 billion.

"Every investor have an equal opportunity to participate in the project because by 2025 we will need seven plants with a capacity of 27,000 barrels per day, with each costing up to $9.6 billion," Bukin said.

World Bank approves $135,5 mln loan for Indonesian poverty alleviation

Jakarta (ANTARA News) - The World Bank's board has approved a special interest-free loan of 135.5 mln usd to expand the activities of the national urban poverty alleviation program, the World Bank said.

It said the funds would be added to the 340 mln usd set aside for a program that empowers urban communities to build their own infrastructure while improving capacity and creating employment.

The program aims to cover about 7,300 urban communities in all 33 provinces, the World Bank told XFN Asia.

Since it began in 1999, the program has been put to work in over 6,600 urban communities containing 7.4 mln beneficiaries.

JBIC pledges US$546 mln for liquefied coal project in Indonesia

Jakarta (ANTARA News/Asia Pulse) - The Japan Bank for International Cooperation (JBIC) has offered a US$546 million loan to finance the construction of a coal liquefaction project in Indonesia.

Construction of the plant, which will have a production capacity of 13,500 barrels of liquefied coal a day, will start in 2009, a JBIC Director Shin Oya said in Jakarta Tuesday.

Shin Oya said JBIC is prepared to provide 60 per cent of the US$910 million required for the project, which is estimated to cost US$1.3 billion.

Indonesia and Australia Agree to Breed Wild Animals

Tuesday, 22 May, 2007 | 15:32 WIB

TEMPO Interactive, Jakarta: The Forestry Department followed up cooperation with the Australian Zoo Authority to breed wild animals threatened by extinction. The Letter of Intent was signed in Jakarta yesterday (21/5).

Earlier, the Wildlife Park Authority bred the Sumatran orangutan in Australia. The orangutan called Tamara was brought from Bukit Dua Puluh National Park, Jambi.

Last October, Tamara was returned to Indonesia. Tamara gave birth to 12 orangutans, now being reared at the Perth Zoo under the auspices of the Australian Zoo Authority.

In the Letter of Intent , the base of cooperation continues. It was agreed that Australia will support the conservation activities of other animals from the national park such as the Sumatran elephant and the Sumatran tiger.

Australia will be involved in the activities of habitat protection and security, rehabilitation and release of the orangutan to its natural habitat, elephant and tiger conservation especially the handling of conflict with humans also Javan gibon conservation.

Australia will also help to increase human resources in the national park by the staff exchange program, population survey and research through to technical aid for infrastructure development.

Deeper pockets needed to finance Deep Tunnel: Guv

The Jakarta Post, Jakarta

The project to build a 22-kilometer tunnel to solve Jakarta's chronic water and transportation problems will likely cost some Rp 16.3 trillion (US$1.8 billion), four times the budget proposed in February.

Governor Sutiyoso said Monday that 30 percent of investment for the project would come from the central government and the city's budget.

"I'm inviting the private sector to fund the project," he said.

Sutiyoso expressed optimism that the private sector would invest in the Jakarta Multi Purpose Deep Tunnel project, since they would stand to reap a large amount of revenue from the electricity, water and fertilizers produced in the tunnel.

It is estimated that the tunnel will generate around Rp 2.2 trillion each year from the operation of two levels of roadway and a waste water reservoir.

Waste water from the tunnel will be processed to become clean water in North Jakarta's Pluit dam to help meet the water requirements of up to 1.5 million residents.

The tunnel will also produce hydroelectricity and fertilizer from the wastewater process.

For around two weeks of high rainfall each year, the entire tunnel, including roadways, will turn into a massive duct for channeling rainwater.

According to the Jakarta Water Supply Regulatory Body, which initiated the project, the area above the roadways will be used as a utility tunnel.

The entire tunnel will be constructed 15 meters below the West Flood Canal project with entrances in Balekambang, East Jakarta and Manggarai, South Jakarta and exits in Tanah Abang, Roxy and the airport in Cengkareng, Tangerang.

"The project is a good alternative for Jakarta since land acquisition won't be necessary to bring the tunnel about," said Achmad Lanti, the head of the regulatory body.

Achmad said he hoped the tunnel would be finished by 2014, although he admitted such a projection was based on the smooth running of the project.

The city administration will hold an international seminar on the deep tunnel on May 24 to attract investors to fund the project.

The seminar will be attended by representatives from the Islamic Development Bank (IDB) and other international financial institutions.

Bukit Darmo Property to go public with eye on projects in Surabaya

The Jakarta Post, Jakarta

Surabaya-based property firm PT Bukit Darmo Property is set to offer two billion new shares to generate fresh capital of Rp 250 billion (US$28.7 million) through an initial public offering (IPO) next month.

The new shares, which will account for 33.34 percent of the company's total shares, will be sold to the public at between Rp 110 and Rp 140 each from June 6 through 8, and will be listed on the Jakarta Stock Exchange on June 15.

According to the underwriter, PT Ciptadana Securities, the offer had already been oversubscribed by 100 percent as of the end of last week.

"The shares may be oversubscribed by five times by the close of the offering period," Ciptadana Securities president director Ferry Budiman Tanja said Monday during a briefing.

President director Wim G. Gobel said the company would use all the IPO proceeds to help finance its condominium and shopping mall projects in Surabaya.

Bukit Darmo plans to build the Adhiwangsa Golf Residence, which will comprise two condominium towers, and the Lenmarc Lifestyle shopping mall at a total cost of Rp 1.1 trillion.

The company is scheduled to complete the construction of the six-story shopping mall and one of the condominium towers in August 2008, and the other condominium tower in December 2008.

Finance director Ferry Junarso said that Bukit Darmo was offering 170 condominiums at between Rp 1.9 billion and Rp 2.6 billion each. Ninety-two of them had been sold as of last month. The company planned to sell other 190 units by the end of this year, he said.

Bukit Darmo is the developer of the Acacia Hotels in Jakarta and Batam, Riau Islands, the Hailai International Executive Clubs in Jakarta and Surakarta, Central Java, the Bukit Darmo golf course in Surabaya, the Batam Hills golf course in Batam, the Krawang Plaza in Krawang, West Java, and several other upscale properties in Surabaya.

Medco to invest $500 million to develop Blok A in Aceh

Ika Krismantari, The Jakarta Post, Jakarta

The country's largest publicly traded oil company PT Medco Energi Internasional said over the weekend it plans to spend US$500 million to develop Blok A in Aceh.

The company's aim is to start operations and production by 2010.

Medco president director Lukman Mahfoedz said Medco was in the process of submitting for approval its plan of development (POD) to the Upstream Oil and Gas Regulatory Agency (BPMigas), as required under existing regulations.

Lukman said Medco would share costs with its partners Premier Oil Sumatra and Japan Petroleum Exploration.

"We have given the POD to our partners," he said, without elaborating.

Medco and Premier hold the majority stake in Blok A, with 41.67 percent and 41.66 percent respectively.

Japex holds the remaining 16.67 percent.

A Medco-led consortium bought at the end of January a 50 percent stake in Blok A from ConocoPhillips, the third largest U.S. oil company.

In April 2006, Medco and partners purchased the first 50 percent stake in the blok from U.S. energy giant ExxonMobil.

The gas blok was previously owned by Conoco and Exxon, with a participating interest of 50 percent each.

ConocoPhillips and ExxonMobil said they sold their stake because of the high content of carbon dioxide in the block, which makes gas exploration and production more expensive.

The block is reported to have a proven reserve of 0.5 trillion cubic feet.

Businessman Djodi ready to buy back Telkomsel shares

Jakarta (ANTARA News) - Indonesian businessman Setiawan Djodi has prepared US$1.6 billion to buy back Telkomsel shares in Singapore`s telecommunications company SingTel.

"The money came from overseas investment banking companies such as those in Japan and the Middle East. They are ready to cooperate with Setdco (Djodi`s firm) in preparing the money," he said here on Sunday.

Djodi said Setdco did not intend to file a lawsuit but to buy back Telkomsel shares to which Setdco was actually entitled. "We wish to settle the matter on business-to-business basis," he said.

He said the US$1.6 billion would be used to buy 35 percent of Telkomsel`s stake in SingTel. "However we only wish to buy 22.3 percent of the stake, to which Setdco is entitled. If they wish to sell the rest (12.7 percent) we are also ready to buy them," he said.

He admitted he had sent a letter to the Singapore government stating its wish to buy back Telkomsel shares in SingTel. He said he had not yet received a reply from them.

Asked on the possibility that the Singapore government might not be willing to sell them, Djodi said the Singapore government had to consider the wider interest in its cooperation with Indonesia that would not only cover business matters.

"As a Javanese, I will put myself in an inferior position, and if they still reject I will move away and if they continue to reject, well, that will be all," he said.

About any legal action he might take against SingTel, Djodi said he just may do so, but did not elaborate.

Djodi said that initially Setdco had a five percent stake in Telkomsel and 17.3 percent in a Dutch firm (KPN). After KPN went bankrupt its shares were sold along with Setdco`s totalling 22.3 percent.

He said Setdco as part of Telkomsel shareholders that is the first to have the right to refuse, had declared its willingness to buy back the KPN shares.

"At that time we offered US$650 million, higher than SingTel`s bid of only US$601 million," he said.

However in practice, it was SingTel that won the bid for the Telkomsel shares. "This is strange and controversial because our bid was higher, and we are the first to have a right to refuse," he said.

Housing minister to declare start of building low-cost apartments in four citties

Padang, West Sumatra (ANTARA News) - Housing affairs minister M Yusuf Asy`ari during a visit to Padang, West Sumatra provincial capital, on Monday, led a ground breaking ceremony marking the start of the construction of a low-cost apartment for rent in the university campus in Padang, and ceremonies are held for similar projects in Jambi, Gresik, Palu and Makassar, an official said.

"Similar ground breaking ceremonies in the building of low-cost apartments for rent were simultaneously held in the other four cities," Zulfi Syarif Koto, deputy of formal housing affairs of Public Housing Ministry said here on Sunday.

The minister, will through a teleconference, simultaneously lead the ground breaking ceremonies, the official said.

According to him, the minister will also use the opportunity to call at a low-cost house for a chat with its occupants.

The effort to expedite the building of low-cost houses for rent is aimed to reach the so-called "Millennium housing development target, and expecting assistance of the Public Works Ministry under its decree no.5/2007 in the funding of low-cost apartment buildings.

The issuance of the regulation is expected to accelerate the building of low-cost houses for rent in 10 other like Medan, Batam, Palembang, Jakarta, Bandung, Semarang, Yogyakarta, Surabaya, Banjarmasin and Makassar, he added.

BlueScope Steel to invest $US101 mln in Indonesian expansion

Melbourne (ANTARA News/Asia Pulse) - Australia's biggest steelmaker, BlueScope Steel Ltd (ASX:BSL), will reinvigorate expansion in Indonesia with a $US101 million ($A122 million) investment to complete the construction of a second metallic coating line at its Cilegon operation.

Located 100km west of the Indonesian capital, Jakarta, the new line will be dedicated to producing BlueScope's thin-gauge coil, used primarily in residential construction.

"This market continues to experience strong growth in both the residential and commercial building sectors," BlueScope president Indonesia and Malaysia Rob Crawford said.

China's Geely motors to make debut in Indonesia

englisheastday.com, 18/5/2007 15:33

Aiming at grabbing a slice of Indonesia's reviving automotive market, Chinese automaker Geely International Corp is to make presence in Jakarta with its Geely CK sedan, the local press said today.

The new car, to be launched in July, will be assembled here by Malaysian-based firm PT IGC International and PT Gaya Motor, a subsidiary of the country's largest auto firm PT Astra International, reported English daily The Jakarta Post.

With three engine variants, the sedan will sell for between 80 million rupiah (US$9,095) and 95 million (US$10,800) .

"Our idea is to supply the market with a quality product at an affordable price," Geely International president director George Zhao was quoted as saying.

The Geely CK sedan first hit the Chinese markets in 2005, and has been exported to 60 countries and sold more than 80,000 units worldwide.

"We selected Indonesia as our first market in Southeast Asia as we are aware that the automotive industry here has been making very promising progress," Zhao said.

Geely International will become the second Chinese automaker to assemble its products in Indonesia after Chery Automobile entered the market last year in collaboration with the country's second- largest auto producer and distributor, PT Indomobil Sukses International.

Geely expects to produce 2,000 cars per year and intends to introduce at least five new models over the next two years.

IGC International chief commissioner Suhaelly Kalla said that Indonesia would become the center of production of the Geely CK for the Southeast Asian market. The cars would be exported to East and Southeast Asian countries, he said.

In addition to establishing an assembling facility at a cost of about US$6 million, IGC International will also set up spare- parts and after-sales service centers.