RI eyes more investment from Italy, Luxembourg

Hyginus Hardoyo, The Jakarta Post, Rome | Sat, 11/21/2009 12:12 PM

Indonesia is looking to attract further investment from Italy and Luxembourg - two European countries largely untapped so far, Indonesian Vice President Boediono said Thursday.

Speaking after a meeting with representatives of 14 Italian companies at the Hassler Roma Hotel in Rome, Boediono said Italian businessmen had expressed an interest in doing business or in continuing to expand their existing operations in Indonesia.

Some of the 14 Italian companies have already established joint ventures in Indonesia in various fields, ranging from oil and gas exploration, coal mining, engineering and construction, to leather production.

ENI Indonesia Ltd., one of energy giant ENI SPA's subsidiaries in Indonesia, for example, has completed its gas and oil exploration in Ambalat waters in East Kalimantan.

"The oil and gas production there is already in the pipeline. It .., is still waiting for certainty," Boediono said, referring to border areas in Ambalat currently in dispute between Indonesia and Malaysia.

Other Italian companies invited to the meeting included Assorcarboni and Enel SPA, which both specialize in coal imports, Allilauro SPS (in maritime transportation), Fiat Group (automotive industry), Ponte de Archimede SPA (in alternative and eco-friendly energy development) and Trevi SPA (in drilling and foundation engineering services).

The meeting was held on the sidelines of Boediono's visit to Italy to attend the Food and Agriculture Organization's World Summit of Food Security at the FAO headquarters on Wednesday in Rome.

During the visit, Boediono was accompanied by Agriculture Minister Suswono and Investment Coordinating Agency (BKPM) chief Gita Wiryawan, who joined the Vice President's entourage after visiting Luxembuorg.

Gita said a similar interest had been expressed among businessmen from Luxembourg, especially in the coal business.

"Around 50 percent of Luxembourg's coal imports are supplied by Indonesia," Gita said, without providing details on the volume.

Indonesia has become the largest coal exporter to Italy, with a current market share of 30.9 percent.

In 2004, Indonesia's coal exports to Italy reached US$314.9 million. This figure jumped to $959.9 million in 2008.

Exports in the January-May period in 2009 dropped by 20 percent from the corresponding period in 2008, but this decline affected all coal exporters to Italy.

Given the promising response among investors in Italy and Luxembourg, Gita said the Indonesian government would do its best to improve bilateral trade with the two countries.

Gita further said foreign investment commitments registered with BKPM had reached $13 billion so far this year, adding that only a fraction of this amount had come from Italy.