Wika to set up joint venture to tap foreign markets

Antara News, Monday, January 18, 2010 21:44 WIB

Jakarta (ANTARA News) - PT Wijaya Karya Tbk (Wika) plans to set up a joint venture company to tap construction market abroad particularly in Northern African countries such as Algeria, the company`s finance general manager, Entus Asnawi, said.

"Like in Algeria we will set up a joint venture with a local company to tap construction market in the oil rich country," Entus said here on Monday.

Wika would inject up to 49 percent of capital into the joint venture company with the rest of the capital left for the local company, he said to newsmen.

"We deliberately take a minority position because the rule in the country only allows to hold up to 49 percent shares," he said.

He said Wika would set up the company to win construction projects in that country which number a lot including building, housing and bridge construction projects.

"Later after the company wins a tender will Wika come to carry out the project. We are optimistic we will win the projects because the number of construction companies in that country is small," he said.

Entus said the plan will be realized immediately by the middle of this year at the latest and a local has already been chosen to be Wika`s partner.

He said Wika has actually received a lot of offers so far to carry out projects abroad such as from Russia and Brazil but "study has yet to be carefully done with regard to legal aspects to avoid a loss."

Entus said Wika had indeed built cooperation with Exim Bank of Indonesia to become the underwriter for the overseas projects but the bank also had to conduct a careful study first before agreeing the plan.

Regarding Algeria, he said, Wika was now carrying out a 500 kilometer long road and bridge project worth Rp800 billion in cooperation with a Japanese consortium.

"We win the trust because the result satisfied the consortium. Although our posisition is a mere sub-contractor we have been trusted to implement the next package. So we have twice obtained additional packages," he said.

With regard to the Asean-China Free Trade Area he said Wika would change its strategy not only to become a mere sub-contractor but to become a main contractor.

Firms may find work in Algeria

The Jakarta Post, JAKARTA | Wed, 01/14/2009 4:13 PM  

Local construction companies might watch out for opportunities concerning projects in Algiers, especially those funded by the local department of public works, State Minister for State Enterprises Sofyan Djalil said Tuesday. 

"The projects in question include the building of 104 kilometers of freeways and around 36 bridges in Aljazair," he said at the Ministry after a discussion with the Aljazair State Minister of Public Works, Amar Ghoul. 

According to Sofyan, the projects will involve state-owned companies and possibly privately owned ones. But it was not possible yet to say how much the projects were worth, he said. 

He mentioned that the value of the projects under review was to be worked out together with a consortium from Japan, and that the idea was just getting going, so it was not yet easy for interested companies to get themselves nominated and in the frame. 

However, state-owned construction company PT Wijaya Karya (WIKA) had already secured a role, as the builder of two bridges worth Rp 400 billion (around US$38 million). 

"The ministry was impressed with WIKA's track record, which included several projects in Algeria, and it also invited other construction companies to participate in future projects," Sofyan said. 

He explained that currently WIKA had around 700 workers in Algeria working on projects including mosques and housing. 

The company president director Bintang Perbowo said that at first the Algeria ministry offered WIKA the chance to build up to five bridges, worth a total of Rp 1 trillion. 

However, the company only accepted two of them, he said, adding that it will try to finish these projects before considering others from the ministry. Previously, WIKA had gone through the same pattern of partnering with a Japanese consortium to run projects in Algeria. 

Two years ago, it signed a contract with COJAAL, a consortium that consisted of companies such as Kajima, Taisei and Teken, to build 57 bridges worth around $50 million. 

WIKA expects good performance overseas to help push this year's net profits up 221.5 percent from the Rp 144 billion forecast at the end of 2008. 

At home, the company also has high hopes of securing more projects, as the government intensifies its infrastructure projects. (dis) 

South Korea current largest buyer at trade expo

The Jakarta Post, Jakarta 

South Korea is currently the largest buyer of this year's Indonesian Trade Expo with a total transaction volume of US$4 million. 

Algeria, Pakistan and Bangladesh follow closely with US$2.9 million, $1.5 million and $1.2 million respectively, tempointeraktif.com reported on Saturday. 

The 23rd Expo, held at the Jakarta International Expo Kemayoran, kicked off to a slow start on Tuesday and will close later today. 

The expo has so far only raked in $32.3 million, way below the total targetted volume of $220 million. 

Last year's event reaped $200 million. 

The organizing committee said 2,300 foreign buyers from 108 countries participated at the trade expo, which exhibits Indonesia's leading export products, including furniture, electronics, shoes, textiles and garments as well as commodities coffee, cocoa and rubber. 

"Perhaps more sales will take place today as it is the last day of the expo," chief expo organizer and head of the National Export Development Board Bachrul Chairi said. 

Furniture is still the highest generating product, raking a total of $8.1 million or 25.2 percent of the total transaction value to date. 

Mining products and crude palm oil follow second and third, each generating $7.3 million and $5.8 million.

Indonesia looking at $5b in investment from Middle East

The Jakarta Post, Jakarta

The government eyes up to US$5 billion in investment from the Middle East this year in financial services, natural resources, infrastructure, property and plantations.

Alwi Shihab, special government envoy to the Middle East, said he was optimistic about the target with the country having secured investment commitments from high profile companies such as Qatar Investment Authority last year.

"If we can bring in investment of $1 billion, like the Qatar Investment Authority, surely we can get high value investors from other Middle East countries, for example Kuwait."

He added that in 2007 countries from the region had invested some $2.55 billion through joint venture companies operating in infrastructure, chemical products and tourism.

Besides the Qatar sovereign fund, other investors who have signed investment agreements include Emmar of Algeria -- for the development of hotel and resort facilities worth $600 million in Lombok, with PT Bali Lombok Tourism Development Center.

To further support efforts to attract more Middle East investors, Alwi added, the government should introduce a more flexible taxation system and issue regulations on sharia-based financial services.

"The Middle East investors have mentioned they are very interested in Indonesia's sharia industry. But the absence of supporting laws has discouraged them."

As a result, "they choose Malaysia, and even Singapore." (nkn)