South Korea buys Indonesian aircraft for coastguard

Seoul (ANTARA News) - South Korea has signed a 90-million-dollar deal with Indonesia to buy four transport planes for the coastguard, officials said Tuesday. 

Under the deal signed on Monday, Indonesia will deliver four CN235-110 aircraft by 2011, the Defense Acquisition Programme Administration said. 

"They will be used for various missions," a spokesman told AFP, adding the plane, which is equipped with an advanced radar system, is already used by South Korea's air force. 

Yonhap news agency said the coastguard would use the Indonesian aircraft to patrol waters around a group of Seoul-controlled islands midway between South Korea and Japan. 

Called Dokdo in Korea and Takeshima in Japan, the tiny islands have for decades been a flashpoint in relations, with both sides claiming sovereignty. 

Japan claimed them in 1905 after winning a war with Russia. It went on to annex the entire Korean peninsula from 1910 until its World War II defeat in 1945. 

Seoul has taken measures to cement its claims to the islands, including staging a military exercise nearby. A small South Korean police contingent is stationed on them.

Waterford Wedgwood shifts to Asia to save company

The Jakarta Post

Anthony Deutsch and Elle Moxley, The Associated Press, Jakarta | Wed, 12/31/2008 8:51 AM  

For more than two centuries, Waterford crystal and Wedgwood china have been symbols of Irish and British craftsmanship. Now, their future may lie in Asia. 

Drowning in red ink, the storied brands, which merged in 1986, have moved most ceramics production to Indonesia to cut costs and now plan the same fate for crystal manufacturing. 

Their headquarters may soon follow. 

Short of funds for operations and loan payments, Waterford Wedgwood PLC is in advanced talks to sell a controlling stake to a U.S. private equity fund for roughly 600 million euros ($846 million) in cash and assumed debt, three people briefed on the negotiations told The Associated Press late last week. 

The prospective new owners may move the company's management and possibly its headquarters to Indonesia, one of the sources said. They would not identify the fund and spoke on condition of anonymity because the talks are confidential. 

With a Friday deadline set by creditors, a deal could come as soon as this week, though the Bank of America-led lender group has extended the company's deadline three times previously. 

Waterford Wedgwood, which lost 75.8 million euros (about $107.2 million) in the six-month period ending Oct. 4, has struggled for several years like other fine china makers, as formal dining trends continue to give way to more informal habits. But the global financial crisis has pushed it to the brink of bankruptcy. As credit dried up, the company could no longer raise money to cover costs. Its shares have collapsed to one-tenth of a euro cent on the Irish Stock Exchange. 

Workers have made Waterford crystal in Ireland and Wedgwood china in England for nearly 250 years. Their crafts have graced the tables of royalty and made innumerable wedding gifts for the better-off in the United States and elsewhere. 

But six years of losses has driven Wedgwood to move all major ceramics production from the green hills of Staffordshire county in central England to the industrial outskirts of Jakarta, Indonesia over the past two years. 

Only a small number of high-end products - hand-painted figurines and the iconic blue and white china - will continue to be made in England. The move to Indonesia, which cost 1,500 jobs in England, follows the opening of a smaller ceramics factory in China in 2004. 

On the Waterford side, half of its crystal production was shifted to Eastern Europe last year, cutting 1,400 jobs in Ireland. Now, the company is looking to move all crystal work to Asia, with Indonesia a prime candidate. 

"This is part of an expansive search for the best partners to work with in Asia," said James Philip Murtagh, senior vice president of Waterford Ltd. 

In the English city of Stoke-on-Trent, where Josiah Wedgwood turned the family business into a global pottery center, the founder's statue still welcomes visitors arriving by train. But the skyline is dominated by dormant bottle-shaped kilns. The canals once used to transport fine china are filled instead with pleasure boaters. 

The move to Indonesia all but brings down the curtain on English clay processing in a region nicknamed "The Potteries." At its peak, the industry employed tens of thousands. 

The latest layoffs in December included Jeanette Seabridge, 55, who started as a teenager on the production line at Royal Doulton, a subsidiary of Waterford Wedgwood. After decades molding delicate ceramic flowers, she held onto her job longer than most because of traditional skills that took her a year to learn. 

"I made 360-400 flowers a day, and at the height of production, there were as many as 80 women working with me," she said. Now heading into early retirement, she has taken a part-time job giving demonstrations at the Gladstone Pottery Museum. 

The $50 million move to Indonesia will cut manufacturing costs in half and hopefully enable the business to turn a profit in 2009 or 2010, depending on the depth of the global slowdown, said Tony O'Reilly Jr., whose family is one of two that together own a majority stake in Waterford Wedgwood. 

The move became inevitable because of rising energy costs, shrinking sales and the falling U.S. dollar, which ate into profits from the important U.S. market, company executives said. 

"We're not leaving Stoke-on-Trent completely, but everyone else has either migrated their product, is sourcing overseas, or sadly has gone out of business," O'Reilly said. In another blow to the town, porcelain maker Royal Worcester & Spode filed for a form of bankruptcy protection in November after failing to find buyers for their factories. 

After onsite training, Indonesians have taken up positions as managers, designers, technicians and painters at a factory that can produce 10 million pieces a year. It will employ about 1,750 workers by early 2009 as severance packages are settled in England, O'Reilly said. 

With an average monthly salary of about 1.8 million rupiah ($150), compared with $1,950 in Britain, their work is vastly cheaper. The reduced costs will enable Waterford Wedgwood to boost spending on marketing and create new products, some with a hint of the Indonesian culture of batik and shadow puppets. 

Initial concerns that Indonesian-made china would fall short of Wedgwood's reputation - some of its tableware sets cost thousands of dollars and become family heirlooms used only on special occasions - were overcome when products began rolling out of the new plant. 

O'Reilly said the Indonesian-made china meets Wedgwood's high standards, which earned it royal status from the queen of England in 1901. 

"There is a culture of artisanship," he said on a visit to the Indonesia factory in November. "Our craftspeople here are as good, if not better, than some of those we have in the United Kingdom." 

Though the packaging will say "Made in Indonesia," all pieces will still be stamped "Wedgwood. England 1759" - labeling the company says is permitted under international trade law.

Related Article:

Wedgwood goes into administration

US fund in talks to take over Waterford Wedgwood

Tangguh LNG renegotiation with China to resume: Kalla

The Jakarta Post, Jakarta | Wed, 12/31/2008 10:50 AM  

Despite falling oil prices, the government has insisted on moving forward with a process of renegotiating with China for the price of liquefied natural gas (LNG) from the Tangguh field in Papua for export to the country. 

After being halted for sometime due to the outbreak of the global financial crisis in the third quarter of this year, the government is slated to resume the renegotiation with its Chinese counterpart in January, according to Vice President Jusuf Kalla. 

"We will refresh (the negotiation) in January 2009," Kalla said during his visit to the Tangguh LNG project in Bintuni Bay, West Papua province on Tuesday as reported by Antara. 

When visiting China earlier, Kalla said the Tangguh LNG contract with China would be renegotiated because the position of Indonesia was seen as on the losing side. 

However, he did not disclose any details of what was being offered to China. 

"We will discuss over the formula, not only about price. Negotiations will move forward," he said. 

Kurtubi, an oil and gas analyst, said the renegotiation process of LNG pricing formula for Tangguh had to be taken to the next stage despite the falling oil price to around US$30 level. 

In the 25-year contract for LNG export to China, the price had been set at $2.40 per mmbtu with less adjustment to an increase in crude oil prices. 

The controversial Tangguh liquefied natural gas (LNG) contract was signed by Indonesia and China's Fujian province in 2002 under the administration of then Indonesian president Megawati Soekarnoputri. 

The LNG price at the time of the contract's signing was based on a crude oil price of $20 per barrel. 

The Chinese government had earlier agreed to raise the price to $3.80 per mmbtu but the Indonesian government refused the offer, saying it was still too low. 

The Tangguh gas field is developed by a consortium of BP Plc, (37.16 percent), MI Berau (16.3 percent), CNOOC (13.9 percent), Nippon Oil (12.23 percent), KG Berau/KG Wiriagar (10 percent), LNG JapanCorporation (7.35 percent) and Talisman (3.06 percent). (iwp)

30 state firms on stream to go private, mostly via IPOs

The Jakarta Post, Wed, 12/31/2008 10:50 AM  

The government plans to sell shares in 30 state owned companies next year, most of them through the initial public offering (IPO) scheme, Deputy State Minister for State Enterprises Muhammad Yasin says. 

"Most of the firms will be privatized via an IPO, except those companies in which the government has only a small proportion of shares," said Yasin. 

The privatization program will include several carried-over programs from this year, including IPOs of steelmaker PT Krakatau Steel, flag carrier Garuda Indonesia and Bank Tabungan Negara. 

Yasin said the government expected to generate close to Rp 10 trillion (US$906 million) from selling around 30 percent of the shares in each of these companies. 

"Before we offer the stake to the market, we will first offer current companies' stakeholders the chance to buy them," he said, adding proceeds from the IPOs would be used to restructure the companies. 

Construction firms PT Pembangunan Perumahan and PT Waskita Karya are currently waiting for House of Representatives approval for their IPOs, according to Yasin. 

The ministry initially planned to privatize 44 companies next year, but decided to postpone several of them due to the recent stock market collapse as a result of the financial crisis following the Wall Street crash in the United States. 

Indonesia has 139 state-owned firms engaged in energy, mining, utilities, telecommunications, banks, services, and commodities. -- JP/(hwa)

Indonesia to announce $1 bln growth package-minister

By Adriana Nina Kusuma and Karima Anjani, Tue Dec 30, 2008 6:06pm IST 

JAKARTA, Dec 30 (Reuters) - Indonesia will announce a 12.5 trillion rupiah ($1.14 billion) package early next year to help Southeast Asia's biggest economy withstand a slowdown in global economic growth, the finance minister said on Tuesday. 

The commodity-producing nation has been hit by the world financial crisis: demand for its commodities, including palm oil and copper, has faltered, the rupiah currency fell to a decade low against the dollar, and the stock exchange was forced to shut for three days in October after stock prices plummeted. 

The finance minister, Sri Mulyani Indrawati, told reporters that economic growth in 2009, an election year in Indonesia, would be 5 percent, the mid-point of the government's previous forecast range. 

That would represent a slowdown from 2007, when the economy expanded at a decade-high 6.3 percent, and from 2008, when the government expects growth of about 6 percent. 

But with parliamentary and presidential elections in 2009, domestic consumption could get a boost, she said. 

Typically, political parties in Indonesia splash out on gifts such as food and clothes for voters, as well as spending on their advertising campaigns. 

"2009 is a political year, and that could be a blessing for us. As the president has said, an election helps economic activity in a way, due to spending by political parties," Indrawati said, adding that the voters would also have more spending power as commodity prices fall, inflationary pressures subside, and interest rates drop. 

Governments worldwide have announced various measures to try to spur economic growth. After several rounds of rate cuts by central banks, governments have announced spending packages to cushion their economies from the worst global downturn in decades. 

Indonesia said earlier this month it would spend about $9 billion on infrastructure projects to boost growth. Analysts have said the economy needs to grow around 6 percent to create new jobs for a rapidly growing population in the world's fourth-most populous country. 

"The threat in 2009 will be lay-offs. So we will see the impact on industries," she said, adding that the government package would take into account ways to "compensate the industries which have been hard-hit by the global crisis." 

She said unemployment was currently around 8.5 percent. 

"Investment activity in various projects will still continue, because there is no reason for a sudden shutdown," said Indrawati, adding that loan growth is "still strong." 

Indrawati said inflation next year would be about 6 percent, at the lower end of the government's forecast range, due to falling commodity prices. ($1=10,975 Rupiah) 

(Writing by Tyagita Silka and Sonya Angraini; Editing by Sara Webb/editing by Tony Austin) 

Indosat to offer services at Islamic business forum

The Jakarta Post, Jakarta | Tue, 12/30/2008 11:17 AM  

Publicly listed PT lndosat, the nation's second-largest telecommunications provider, said it would provide telecommunication facilities at the 5th World Islamic Economic Forum (WIEF) in Jakarta in March. 

"The communication facilitites we will be provided include internet access and information technology appliances, land lines through I-phone, 3G cellular connection, and highspeed (broadband) internet," Indosat president director Johnny Swandi Sjam said, as quoted by Antara news agency on Tuesday. 

WIEF, is an international business forum for various business sectors of the Muslim world. It was originally known as the OIC Business Forum. 

The arrangement was inked Tuesday in a memorandum of understanding (MoU) that was signed by Sjam and WIEF organizing committee co-chairman State Minister of State Enterprises Sofyan Djalil. 

According to Sjam, Indosat's support of WIEF is part of the company's efforts in promoting Syariah-based economy in Indonesia. 

"As the country's pioneer in issuing Syariah obligations in 2002 and also as a company that has received a Syariah-compliant certificate for its products and services, we wish to continue our support in developing a Syariah-based economy in all sectors and national industry," he said.

State infrastructure projects to boost WIKA's earnings next year

Alfian, The Jakarta Post, Jakarta | Tue, 12/30/2008 11:02 AM  

State-owned construction firm PT Wijaya Karya (WIKA) expects a 15.63 percent jump in revenue in 2009 after a pledge by the government to spend huge state funds next year on infrastructure projects. 

In a statement Sunday, WIKA forecast its 2009 revenue would rise to Rp 7.4 trillion (US$669 million) from about Rp 6.4 trillion this year, while net profit for 2009 is forecast to rise to Rp 175 billion, up by 21.5 percent on the Rp 144 billion forecast for the end of 2008. 

WIKA finance director Ganda Kusuma said the company was fully aware of the unfavorable conditions for next year's business, but remained optimistic it would enjoy substantial growth due to government-sponsored infrastructure projects. 

"The company will focus on government projects (next year) both from the central and regional governments. We will also focus our efforts on securing our liquidity," Ganda said. 

As of November this year, WIKA had secured multi-annual contracts valued at a total of Rp 14.31 trillion. 

The company expects to win five more construction projects with a total value of Rp 883.25 billion by the end of December. 

These projects include part of the work on a 700 megawatt power plant in Tanjung Priok, North Jakarta including a contract worth Rp 340 billion; a high school building worth Rp 65.89 billion and a sports center worth Rp 118.59 billion in Kuantan Sengingi, Riau Province. 

Other projects include a dam in Tembesi, Riau Islands Province valued at Rp 224.05 billion and a flood canal project for the Ciliwung and Cisadane rivers in West Java worth Rp 883.25 billion. 

WIKA said it would get more revenue next year because of several ongoing power plant projects which were multi-annual projects scheduled to be completed in 2010. 

The power plant projects and other infrastructure projects would contribute substantially to the company's revenue this year and in the next few years. 

The government has allocated a budget of Rp 34.98 trillion for the public works ministry next year. 

WIKA is also looking at projects from state companies, especially from state power company PT Perusahaan Listrik Negara (PLN) which is in the process of completing the construction of a power plant program totaling 10,000 megawatts of electrical capacity under the government's accelerated power

City prepares Rp 24.5b for new look BMW Park, stadium

The Jakarta Post, Jakarta | Tue, 12/30/2008 6:28 PM  

The Jakarta administration has allocated Rp 24. 5 billion (US$2.2 million) for the refurbishment of Bersih, Manusiawi dan Berwibawa (BMW) Park and its new stadium in Tanjung Priok, North Jakarta. 

Jakarta youth and sports agency head Ery Basworo on Tuesday told tempointeraktif.com that his office would use the fund to begin the project next year. 

"In the first stage we have set aside Rp 20 billion for the foundations and Rp 4 billion for detailed engineering designs, while the remaining Rp 500 million is for environmental analysis," Ery said, adding that his office needed a total Rp 400 billion to complete the refurbishments and stadium. 

Previously, North Jakarta public order officers tore down hundreds of dwellings on the park site, forcing thousands of illegal squatters to leave. 

The administration had announced plans to restore the 66-hectare park as part of efforts to add some 55,540 square meters to the city's green areas. The plan included the addition of an international sports stadium to the park. (ewd)

Indonesia to implement Wimax broadband in 2009

The Jakarta Post, Jakarta | Sun, 12/28/2008 6:59 PM  

Indonesia will implement Wimax (Worldwide Interoperability for Microwave Access) broadband technology next year to improve access to the Internet across the country, an official said Sunday. 

Engkos Koswara, an expert adviser to the state minister for research and technology, told Antara news agency the government was still testing the 2.3 GHz frequency for the Wimax technology. 

"We hope that by next year, Wimax technology will be implemented," he said in Medan, North Sumatra, adding the government would encourage the use of domestic products to support the technology. 

Indonesia ranks very low in the region in the use of broadband for Internet access. 

Engkos was in Medan to attend the promotion of IGOS (Indonesia Goes Open Source) and the launching of IGOS for North Sumatra (IGOS Sumut).

IGOS, launched in 2004, was launched to promote the use of open source software throughout the country. 

GREEN HOPE 2009

The Jakarta Post | Mon, 12/29/2008 10:55 AM 
 

 

GREEN HOPE 2009: Green activists straighten out a huge poster calling people to "act now, earth can't wait" hanging on the Welcome Statue at the Hotel Indonesia roundabout on Sunday.

 The poster is part of the Green Hope 2009 campaign, spearheaded by the Ministry of Environment and a number of green organizations to promote environmental protection in 2009. JP/Ricky Yudhistira

Indonesian government allows Qtel to acquire 65% of Indosat

MENAFN - 26/12/2008 

(MENAFN) The Chairman of Qtel Group, Sheikh Abdullah bin Mohammed bin Saud Al Thani, announced that the Indonesian government has agreed to allow Qtel to acquire an up to 65 percent stake in Indosat, The Peninsula reported. 

The Indonesian government provided its allowance to Qtel within the previously agreed offer price of $0.7 per share. 

Al Thani said that his company is pleased to be in a position to move forward with this tender offer with Indosat's integrated business intact, adding that this move will put Indosat in a great position to compete aggressively in the future. 

Qtel will work on clearing the arrangements for the tender offer with market regulators in early January 2009

US fund in talks to take over Waterford Wedgwood

By ANTHONY DEUTSCH – Associated Press, 27 December 2008 

JAKARTA, Indonesia (AP) — A U.S. private equity fund is in talks to take a controlling stake in struggling Irish crystal and ceramics manufacturer Waterford Wedgwood PLC for 600 million euros ($846 million), three people briefed on the negotiations said. 

Under terms of the deal, the U.S. investor group would assume roughly 400 million euros in debt, split almost equally between bonds and bank loans, and provide about 200 million euros in new capital, the three individuals told The Associated Press. They insisted on anonymity because the confidential talks are ongoing. 

The deal is desperately needed to save Waterford Wedgwood, a company run by English and Irish managers throughout its more than 250-year history, because it has been unable to raise operating capital in recent months and has posted nearly six years of consecutive loses. 

Without a cash injection it could soon be declared bankrupt. The company has until Jan. 2 — the third postponement from creditors — to make mounting loan payments or face the possible forced liquidation of assets, the individuals said. 

"It's a race against time," one of the people said. "The U.S. equity firm is in the process of due diligence." 

They declined to identify the U.S. investor group, but said talks had also been held with two other potential backers. 

Bank of America Corp., one of Waterford's lenders, acts as an agent for a group of the company's lenders and investors. Bank of America spokeswoman Julie Westermann declined to comment on the ramifications of a possible Waterford deal or the amount of debt Waterford holds. She said doing so would break confidentiality agreements. 

Waterford Wedgwood, know for its high-end crystal and tableware, has been shifting production overseas to cut costs. The Wedgwood ceramics division has moved most of its production from central England to Indonesia, while crystal production has been largely moved from Ireland to Eastern Europe. 

Those shifts have sharply reduced overhead costs, but a combination of the falling dollar, slowing sales of key products and, more recently, the global credit crunch have put its financial future at risk. 

For the six months ending Oct. 4, the company reported its loss rose to 75.8 million euros while first-half sales fell 15.4 percent to 207.6 million euros. 

The company's majority shareholders — the billionaire Irish O'Reilly family and Deputy Chairman Peter Goulandris — currently own a joint 51 percent stake and have poured about 400 million euros into the company to keep it afloat in recent years, one of the officials said. 

The O'Reilly family will be "pragmatic" in considering the offer that will strip it of its controlling stake, one of the individuals said. 

Waterford Wedgwood shares have been virtually worthless for months. They have fallen on the Irish Stock Exchange at one-tenth of a euro cent. This reflects the fact that the company's assets are worth only a fraction of its debts, which grew 7 percent over the past year to 448.9 million euros. 

Additional reporting by Associated Press Business Writer Madlen Read in New York.

World Ocean Conference (WOC) preparation

Antara, 26 December 2008

President of Indonesia Susilo Bambang Yudhoyono authenticate four hotels in Manado, North Sulawesi, Friday (Dec.26). The hotels were prepared to hold World Ocean Conference 2009 (WOC) in next May. (ANTARA photo/Basrul Haq)

WOC Website

Electronic toll collection system introduced as of January 2009

Jakarta,  (ANTARA News) - Some toll roads in Jakarta will start using the Electronic Toll Collection (ETC) system starting the third week of January 2009. 

"So far, the simulation of using the system has been held in some toll roads. The system is expected to be used publicly starting the third week of January 2009," operations director of toll road operator PT Jasa Marga, Adityawarman, said on Friday. 

The operators involved in the new toll payment system are PT. Jasa Marga, PT. Citra Marga Nusapala Persada, PT. Marga Mandala Sakti and PT. Bintaro Serpong Damai. 

The preparations have been done by each of the operators. Some 20 from a total 40 soon-to-be-installed equipment have been installed for the city`s inner ring roads. 

"We have installed the devices at the Cililitan and Semanggi toll gates, to name some," he added. 

The total 400 equipment will be installed by the end of January 2009 and in the third week of the month, the system can be used publicly. 

The use of the electronic cards, said Adityawarman, is to shorthen transactions from seven to four seconds. 

As for other toll road routes, like the Jakarta-Cikampek and Jakarta-Ciawi toll roads, the use of the system is still waiting for the open system.

Yogyakarta expects 500,000 tourists

Slamet Susanto, The Jakarta Post, Yogyakarta | Sat, 12/27/2008 10:56 AM  

Thousands of visitors are making their way to Yogyakarta for their year-end vacation, evident from the full bookings at star-rated hotels and modest lodgings as well as from sold-out travel tickets. 

As a tourist destination, Yogyakarta offers many attractions, including culture, food and heritage as well as alternative excursions such as rural tourism. 

Malaysian tourists have even chosen the city as the best overseas tourist destination this year. 

A number of tour sites, including Prambanan Temple, the Yogyakarta Palace and Parangtritis beach have seen a surge in the number of visitors. 

In all, 500,000 visitors are expected to show up in Yogyakarta for some year-end vacationing. 

To bolster security, the Yogyakarta Police have mobilized 1,900 officers to patrol public places: houses of worship, hotels, malls, train stations, bus terminals, tourist resorts and entertainment locales. 

Star-rated hotels and cheap lodgings have been fully booked for the long year-end holidays, starting from Christmas. 

Data from the Yogyakarta chapter of the Indonesian Hotel and Restaurant Association's (PHRI) shows 35 single-star to five-star hotels and 842 home stays and pensions provide the city with the capacity to put up 3,500 and 8,000 paying guests, respectively. 

"The hotels are ready to greet visitors, predominantly domestic tourists, for the New Year's celebrations," said PHRI chair Istidjab. 

Several hotels are advertising special menus for Christmas and New Year's and staging performances. Street festivals, fashion shows, live bands, dances and door prizes are all on offer. 

Istidjab said he was optimistic the holidays would help boost the local tourism industry. His association was sure the target of 7 million tourists this year could be achieved. 

Tourists to Yogyakarta so far have been tallied at 6.5 million before the final holiday spurt. 

To anticipate the surging number of passengers, state-run railway company PT Kereta Api has prepared an additional train, the Argo Lawu executive train to run between Surakarta and Jakarta. The train, with a seating capacity of 400 passengers, will run on four days, Dec. 28 and 29 and Jan. 3 and 4. 

"Ninety-five percent of tickets for the additional train are sold out and the queue is still long," the railways operational spokesperson Hartomo said Friday. 

Hartomo told The Jakarta Post Kereta Api would operate the additional trains because tickets for the 14 regular trains had sold out. 

The Adisucipto Airport in Yogyakarta also saw a surge in the number of passengers three days ahead of Christmas. It usually serves around 3,900 passengers, but the number had risen to 4,575 passengers during the same period, and is expected to further rise until early January next year. 

Most bus tickets to Yogyakarta are also sold out. Tickets for a number of executive-class buses plying the Jakarta-Yogya route have also been sold out since Dec. 22, and return tickets to Jakarta are expected to be sold out by early January.

Mega Bank plans 20% growth in 2009 loans

The Jakarta Post, Jakarta  | Sat, 12/27/2008 10:55 AM  

Bank Mega, publicly listed medium-sized lender, targets its bank lending to grow next year by up to 20 percent despite the forecast slowdown resulting from the global financial crisis. 

"We predict that credit growth in the first semester will be badly affected by the global economic downturn, but we will see improvement in the second," president director Yungky Setiawan said on Friday. 

According to Yungky, the bank will continue to focus on providing lending for small to medium enterprises which have contributed most to its growth in lending. 

As of the end of September 2008, the bank loan portfolio grew by 51.9 percent to Rp 19.3 trillion from around Rp 12.7 trillion a year earlier. 

"Our credit card achievement was quite satisfying," senior vice president Dony Oskaria said, underlining one of the main reasons behind continued high growth in Bank Mega lending. 

"The number of credit cards issued and financed (by the bank) grew 72.3 percent as of this September from a year earlier." 

Nine-month net profits however, declined by 3 percent to Rp 397.1 billion due to rising operational costs, reflecting bank expansion and the opening up of new branch offices. 

"We added more than 30 branches this year, which caused substantial operational costs," Dony said. "We also had to recruit almost 2,000 new employees." 

This new expansion in banking infrastructure brings the total branches of Bank Mega up to 182 across the country. (dis)

New airport terminal to operate in March

The Jakarta Post, Sat, 12/27/2008 10:54 AM  

TANGERANG: Terminal 3, which is under construction, of the Soekarno-Hatta International Airport has reached the final development stage and will be fully operational in March. 

The development includes the construction of a 4,000-meter runway and an elevated railway to connect the airport with Manggarai train station in Central Jakarta. 

"The soft opening will take place in March next year," Haryanto from airport operator PT Angkasa Pura II said Friday. 

He said the design of the terminal, which could accommodate up to four million passengers per year, would be futuristic and modern. 

When the Terminal 3 is fully operational, the airport will have a total capacity of 38 million passengers per year. 

Haryanto said there were two airlines, Air Asia and Mandala Air, which would be moved to the new terminal. They currently operate at Terminal 1. 

Currently, part of the terminal serves haj flights and transnational migrant workers. -- JP

Chevron’s Indonesian Unit Plans to Invest $3 Billion

By Bambang Dwi Djanuarto 

Dec. 26 (Bloomberg) -- Chevron Corp.’s Indonesian unit, which accounts for about 42 percent of the nation’s oil output this year, may invest $3 billion to boost production from a Sumatran field, a government official said. 

The company will use a new drilling technique to increase its extraction rate to tap 800 million barrels of oil that is currently inaccessible, Eddy Purwanto, deputy of operations at Indonesian oil and gas regulator BPMigas, said in Jakarta today. 

A $170 million pilot project is being conducted until 2011 to test the new technology that uses chemical injection to produce oil, Purwanto said. 

If the project is a success the company will “continue on a larger scale,” he said. 

Chevron is turning to new drilling techniques to halt a drop in production. The Southeast Asia nation imports about one- third of its oil products amid a lack of investment in new reserves and limited refinery capacity. 

Chevron’s Sumatra concessions including the Duri and Minas areas may produce an average 405,000 barrels of oil a day this year, lower than the 408,000 barrel-a-day target set by the government or 425,000 barrels a day last year, Suwito Anggoro, president director of Chevron’s Indonesian unit, said Sept. 8. 

Anggoro couldn’t be reached for comments on his mobile phone. 

To contact the reporters on this story: Bambang Dwi Djanuarto in Jakarta at bbjakarta@bloomberg.net; Berni Moestafa in Jakarta at bmoestafa@bloomberg.net

Regulator: Shell and Petronas may soon sell Octane 88

The Jakarta Post | Fri, 12/26/2008 5:11 PM  

The downstream oil and gas regulator (BPH Migas) said Friday that fuel retailers besides those operated by state owned PT Pertamina would be allowed to sell fuel with lower octane level. 

BPH Migas member Agus Budi Hartono told kompas.com Friday that retailers such as Shell and Petronas would be allowed to distribute fuels of the Octane 88 type. Pertamina currently sells the type fuel under the name Premium, which is the biggest market share holder of car fuel sales. 

Agus said the new regulation was made possible by the decreasing price of global crude oil prices, which led to the decrease in the production cost of the Octane 88. 

The Octane 88 fuel type currently being sold by Pertamina is subsidized by the government. However, with the decreasing oil prices, the selling price of the fuel would reach a breakeven point and may even allow Pertamina to make profit from sales. 

Agus explained that if such situation persisted it would be in the interest of the other fuel retailers to distribute the type of fuel without receiving subsidy from the government. 

“The existing regulation is in fact already allows them to sell Octane 88, but only if the retailers could sell it no more than Rp 5,000 a liter,” he said. (and)

Six oil and gas firms to use local banks, more to follow, BP Migas says

The Jakarta Post, Jakarta | Fri, 12/26/2008 11:20 AM  

Six oil and gas operators have opened six joint bank accounts at domestic banks to deposit their so-called abandonment and site restoration budgets totaling US$60 million. 

The nation's regulator for oil and gas upstream industry also has access to the account. 

The six contractors are: PT Pertamina EP, Medco Tarakan, Medco Rimau, Kalrez Petroleum, Kangean Energy Indonesia Ltd, and Kondur Petroleum SA, said BPMigas' chairman R. Priyono Wednesday. 

The abandonment and site restoration budget is the amount of funds oil and gas contractors must set aside to uproot their production facilities and restore environmental surroundings after they complete their activities. 

Priyono said the contractors used to place the money in individual accounts, which could be in foreign banks. Now, BPMigas has ordered them to put the money in domestic banks, whose accounts will be jointly held with BPMigas. 

"This joint account mechanism is a sort of control mechanism. By using this joint account, contractors can only withdraw the money with the approval from BPMigas," Priyono said during the signing ceremony with the constructors. 

On Wednesday, Kalrez Petroleum, Kangean Energy Indonesia, Medco Tarakan and Medco Rimau opened joint accounts with BPMigas at BNI, while PT Pertamina EP and Kondur Petroleum opened an account at BRI. 

He said BPMigas ordered contractors to place the money in local banks to help stabilize the balance of payments of the country's domestic banks. 

This regulation forms part of a package of new regulations issued by BPMigas that basically require oil and gas operators to use domestic banks to deposit their funds for their entire business operations within the country. 

In the past, many contractors placed their operational funds in overseas banks, particularly in countries where their headquarters are located. For next year, oil and gas contractors here planned to spend up to $13 billion for their operations. 

However, the joint account mechanism only applies to abandonment and site restoration budgets. 

"Hopefully, these joint accounts will make the management of the abandonment and site restoration more efficient," BNI president director Gatot M Suwondo said. 

Currently, there are 64 contractors operating at the production stage, according to BPMigas data. However, BPMigas's general deputy Hardiono said not all oil and gas contractors would be implicated by the regulation. 

The obligation to set aside the abandonment and site restoration budget only applies to contracts signed after 1994, after Indonesia ratified the UN Convention on Law of the Sea (UNCLOS). 

BPMigas did not set a deadline for oil and gas contractors to move their budgets into joint accounts. 

However, Hardiono said the process might take some time because contractors need to build their trust in domestic banks. -- Alfian

Pertamina to spend $200m for fuel storage terminals

Alfian, The Jakarta Post, Jakarta | Fri, 12/26/2008 11:21 AM  

PT Pertamina plans to spend at least US$200 million next year to upgrade two of its storage terminals to support its distribution network, after the state oil and gas firm was reappointed as the sole distributor for subsidized fuels for 2009. 

About $130 million of the planned investment will be spent completing the construction of a storage terminal in Tuban, East Java, and the remaining US$70 million on a storage terminal in Bau Bau, South East Sulawesi, Pertamina's marketing and trading director Achmad Faisal said Wednesday. 

He said the terminal in Tuban would have a 250,000-kiloliter capacity. 

"Construction has begun and we expect to complete the terminal by the end of 2009," Faisal said. 

The storage in Bau Bau will have a 90,000-kiloliter capacity and was designed to secure fuel supply to the eastern part of Indonesia. 

"The terminal project will begin next year and is expected to be completed in 2010," Faisal said, adding that the two projects were part of the company's effort to secure fuels distribution to the public. 

Earlier in the week, Pertamina was officially selected by the government to distribute subsidized fuels for next year, beating out 27 other tender participants, including Shell and Petronas. 

"Pertamina in general is the company most ready to distribute subsidized fuels across the nation," chairman of downstream oil and gas regulator BPHMigas Tubagus Haryono said. 

The 2009 state budget has capped the subsidized fuels quota at 36.85 million kiloliters. The quota will include 19.40 million kiloliters gasoline Premium, 5.80 million kiloliters kerosene and 11.61 million kiloliters diesel. 

Under existing regulations, the government reimburses the distributor under the so-called MOPS plus alpha formula. MOPS, or Mean Oil Platts Singapore, is the average monthly price of oil transactions in Singapore, and alpha is the margin of distribution and profit. 

The House of Representatives and the government has set in the 2009 state budget that the alpha percentage for next year will be 8 percent of MOPS, down from 9 percent this year. 

Pertamina president director Ari Soemarno said Pertamina would not receive profits from the distribution of subsidized fuels with alpha set at 8 percent. 

Based on the assumptions that oil cost $50 a barrel, the dollar at Rp 11,000 and the alpha at 8 percent, Ari said, Pertamina would even suffer a loss of about Rp 2 trillion. 

With the same assumption on oil prices and the rupiah, Ari said Pertamina would reach a break-even point only if alpha was set at 12.5 percent.

Bakrie seals deal with Northstar on joint venture

The Jakarta Post | Thu, 12/25/2008 7:28 PM  

PT Bakrie and Brothers announced Thursday it had reached agreement on all terms for a strategic partnership with Northstar Pacific, setting up a 70:30 joint venture company. 

Under the deal, the joint venture, whose name has not been disclosed, would own 21.4 percent of shares in the world's largest producer of coal to fuel power plants, PT Bumi Resources. 

"The most important benefit for Bakrie is we have not only executed this agreement with Northstar but solved the outstanding debt problem as well. This was following the global economic downturn at the end of September 2008, which unfairly affected the share price in our group of companies," said president director Nalinkant A. Rathod in a statement. 

The deal with Northstar will also affect Bakrie's shareholdings in its four subsidiaries. According to Rathod's statement Bakrie's ownership would be as follows: 42.6 percent share in PT Bakrie Sumatra Plantations, 48.3 percent in PT Bakrie Telecom Tbk, 14.8 percent in PT Bakrieland Development and 43.2 percent PT Energi Mega Persada. All companies are publicly listed. 

"The agreement has been reached against the backdrop of a closer and long-term strategic relationship between Bakrie and Northstar," Nalinkant added. 

Both parties are committed to finalizing the transaction as soon as possible, he said. (and)

Govt allocates Rp70 trillion for infrastructure in 2009

Jakarta (ANTARA News) - The government has earmarked Rp70 trillion in funds for the development of the infrastructure sector in the country in 2009, a spokesman said. 

"We have set aside at least Rp70 trillion for the development of infrastructure facilities next year," deputy to the chief economic minister for infrastructure and regional affairs, Bambang Susantono said here on Wednesday. 

He said that the funds were enough for the development of infrastructures; and for that purpose, the government was to work out the most efficient funding schemes. 

According to Susantono, amid the global economic meltdown, funds from the private sector would become limited so that development should rely on the state budget, especially development for the infrastructures.

Pertamina to call tender for 31 million lpg cylinders

Jakarta (ANTARA News) - State-owned oil and gas company Pertamina will call another tender for the production of about 31 million LPG cylinders worth Rp4.03 trillion, a spokesman said. 

"The tender will be held to meet the need for 46 million LPG cylinders for the 2009 kerosene-to-LPG conversion program," deputy to the marketing and commercial director of Pertamina, Hanung Budya said here on Wednesday. 

He said that 15 million of the 46 million cylinders had been put out to tender this month. Pertamina had named 30 companies as winners. The 15 million LPG tubes will soon be distributed to the people within the January - March 2009 period. 

At present, production capacity at home is about 46 million cylinders, which consist of 36 million by private companies and 10 million by state firms. 

Pertamina has set a target to cover at least 23.044 million families in its kerosene-to-LPG conversion program in 2009, with a subsidy need of Rp7.853 trillion.

West Java to get food center, governor

Bandung, W Java (ANTARA News) - The West Java provincial government will build a food center which will also function as a wholesale rice market to cut down the chain of national rice distribution, an official said on Thursday. 

"West Java has rice barns, so why must the distribution of our rice depend on other regions? I am sure the food center will become a center of national rice distribution," West Java Governor Ahmad Heryawan said. 

West Java has a number of potential rice barns in Cirebon, Indramayu, Subang, Karawang, and Bekasi. 

"The embryo of food center in Pantura (West Java's northern coastal area) has been there, such as in Indramayu and Subang. It is expected the soon-to-be-formed institution can play a role in rice distribution in the future," he said. 

Currently, the Cipinang wholesale rice market plays a role in setting the national rice prices and the distribution of the staple. 

According to the results of a research conducted by the Bandung-based Padjadjaran University, some 80 percent of the rice in the wholesale rice market is supplied by West Java, he said. 

West Java supplies about 594,742 tons of rice to the Cipinang wholesale rice market per year, he said. 

"Once the food center becomes operational, it will increase local farmers' living standards. They will have a strong bargaining power in setting the prices," Heryawan told. 

To increase the productivity of paddy field in West Java, he said the province will set aside Rp1.1 trillion in funds to repair  irrigation networks in 2009. 

The project is particularly aimed at handling water shortages faced by farm land of types III and IV which only produce rice once a year due to  the water shortages, he said. 

"By doing so, the paddy field of types II and IV can produce rice at least twice a year," he said.

Chinese Vice premier meets acting governor of Jawa Timur, visits Suramadu bridge project

www.chinaview.cn, 2008-12-21 20:02:42           

SURABAYA, Indonesia, Dec. 21 (Xinhua) -- Visiting Chinese Vice Premier Li Keqiang met here with the acting governor of Jawa Timur Setia Purwaka and visited the construction site of Suramadu bridge in Indonesia.

Visiting Chinese Vice Premier Li Keqiang (C front) applauds as he visits the construction site of the Suramadu ( Surabaya-Madura) bridge, which will be the longest of its kind, in Indonesia, Dec. 21, 2008. (Xinhua Photo). Photo Gallery>>> 

During his meeting with Purwaka on Saturday evening, Li voiced his hope that Jawa Timur could play an increasingly important role to help step up relations between China and Indonesia. 

"China and Indonesia are good neighbors and both in a significant stage of development," Li said, noting that the growth of China-Indonesia strategic partnership would inject more vigor to their respective domestic development. 

Purwaka expressed his welcome to Li's visit, saying that the construction of the Suramadu bridge assisted by China was a symbol for the friendly cooperation between the two peoples.  

Li visited the construction site of Suramadu Bridge on Sunday morning. He asked the Chinese construction working personnel to try their best to ensure the quality of the bridge, which will connect Surabaya and the island of Madura after its completion, and calling on the relevant Chinese financial institutions to offer further support for the projects. 

Li arrived in Jakarta on Sunday afternoon. He is expected to meet Indonesian President Susilo Bambang Yudhoyono, hold talks with Kalla, and attend a China-Indonesia energy forum on Monday to exchange views on the bilateral relations and other regional and international issues of common concern. 

The 11-day tour, Li's first overseas trip since he took office as vice premier in March, will also take him to Egypt and Kuwait.

 Related Article:

Chinese Vice Premier meets Indonesian President

RI, China sign Rp 35t deals on energy, mining

Chinese Deputy PM to observe Suramadu bridge project

Latest phase of NSW online service introduced to help traders

Aditya Suharmoko, The Jakarta Post | Wed, 12/24/2008 7:00 AM  

The government launched Tuesday the third phase of the National Single Window (NSW), an online service for importers and exporters that could help businesses cope with the global economic downturn.

This latest phase of the NSW, aimed at streamlining the flow of exports and imports and preventing smuggling, includes Tanjung Perak Port in Surabaya, Belawan Port in Medan and Soekarno-Hatta International Airport in Tangerang. They will join Tanjung Priok Port in Jakarta and Tanjung Emas Port in Semarang.

All importers and customs brokers at Tanjung Priok and Tanjung Emas must comply with the NSW, under the latest implementation.

Prior to this, only 146 importers benefited from the NSW, selected based on their record in adhering to port regulations.

This figure “rises to 4,852 ‘active’ importers”, out of 18,737 registered importers at the five ports, Finance Minister Sri Mulyani Indrawati said. There are about 600 customs brokers.

“The ‘inactive’ importers may be illegal or hit-and-run importers,” she added.

Mulyani said with the NSW, business costs could go down because companies would deal exclusively with an NSW team, rather than pay illegal fees to port officials. 

“The NSW can reduce the cost of doing business, which will ease business spending. With a cut in business costs, businesses will have the capacity to keep their hired employees,” she said.

Gunawan Setiadi, treasurer of the Priority Lanes Companies Association (APJP), said he expected the NSW to benefit exporters too, with many businesses using imported goods for export.

Exporters can make use of the NSW too, but only temporarily, at Tanjung Priok, said Susiwijono, the technical head of the NSW preparation team. 

“We will hold a technical test for exports through the NSW next month,” he said, adding 70 percent of chosen exporters had been recommended by the Trade Ministry, and the rest by the Forestry Ministry.

This year, the Directorate General of Customs and Excise checked 735,444 documents at the five ports, 64 percent of which were sent through the NSW.

About 70 percent of all imports to Indonesia go through Tanjung Priok Port.

Regarding the implementation of the NSW at Soekarno-Hatta airport, Susiwijono said the preparation team would check flight schedules, cargo handling information and weather forecasts to ensure the speedy flow of goods.

Anwar Suprijadi, director general of customs and excise, said the flow of goods through airports was much quicker than through seaports, making the business process more difficult.

In 2009, the government is set to integrate the NSW with the ASEAN Single Window (ASW), comprising Indonesia, Brunei Darussalam, Malaysia, the Philippines, Singapore and Thailand.

Other ASEAN countries — Laos, Cambodia, Myanmar and Vietnam — must join the ASW by 2012 at the latest. The ASW is part of the 2015 ASEAN Economic Community.

 

Authorities involved in the NSW: 

1. Directorate General of Customs and Excise
   
2. Food and Drug Monitoring Agency
   
3. Directorate General of International Trade
   
4. Agriculture Quarantine Agency
   
5. Fish Quarantine Center
   
6. Health Ministry
   
7. Directorate General of Post and Telecommunications
   
8. Nuclear Energy Regulatory Agency
   
9. Agriculture Ministry
   
10. Industry Ministry
    
11. Energy and Mineral Resources Ministry
    
12. Forestry Ministry
    
13. Office of the State Minister for the Environment
14. National Police
    
15. Defense Ministry
    

 Source: NSW Preparation Team