Indonesia tank deal raises moral questions

Deutsche Welle, 5 November 2012

With Indonesia set to invest in a major tank deal with German suppliers, concerns over human rights abuses refuse to go away. There are also questions as to whether the archipelago nation needs such equipment.

The Indonesian foreign ministry has announced that the country's armed forces will buy 103 Leopard and 50 smaller Marder tanks from Germany. The orders were placed with the company Rheinmetall in Dusseldorf, Germany.

"The tanks will be delivered in stages - at the end of 2012, in 2013 and in the first half of 2014," Deputy Defense Minister Sjafrie Syamsuddin told journalists in Jakarta.

The deal is thought to be worth some 210 million euros (270 US dollars). The Indonesian Defense Ministry has said it will buy 40 Leopard 2A4 vehicles and 63 Leopard Revolution tanks.

A contract was due to be signed between Jakarta and Rheinmetall on Wednesday. The deal coincides with Rheinmetall's participation in an Indonesian military trade fair, the Indo Defense Expo and Forum, from November 7 to 12.

Syamsuddin made the announcement,
 saying the tanks would come in stages

Previously, the defense ministry had named the armaments company Krauss Maffei Wegmann in Munich as its supplier - something the firm had denied.

Despite those denials, the news was enough to trigger a storm of protest. Human rights organizations have sharply criticized the fact that the tanks are being procured from Germany. Valeska Ebeling of the rights group Survival International explained that her organization had strong concerns about the human rights situation in Indonesia - particularly in the region of West Papua. Survival International claims the indigenous people of the resource rich area have been suppressed since 1963.

"The German tanks could be used against by the government against its own people," said Ebeling. "We want Germany to address the issue of responsibility and human rights with Indonesia."

The opposition in Jakarta is also unhappy. Indonesian parliament representative and member of the defense commission, Helmi Fauzi, explained to DW that the Leopard tanks were not appropriate for Indonesia, being too heavy for the country's road system. In addition, he claimed, the Indonesian navy did not have ships suitable for carrying the tanks.

"Indonesia needs many more light and small tanks," explained Fauzi, who is a member of the largest opposition party the PDI-P. But while the defense commission initially saw a heated debate about the tank deal, Fauzi said, the majority were eventually in favor.

Rheinmetall is due to exhibit its wares
at a military trade fair in Indonesia

He said they were persuaded by the obsolescence of the army's existing equipment.

'A matter of status'

According to security experts, the Indonesian army was keen to buy heavy battle tanks because neighboring countries such as Malaysia and Singapore already possessed such weapons. For the army, the possession of such weapons was important, even if only for prestige.

The Indonesian human rights organization Imparsial criticized the project. Poengky Indarti, the group's executive director, described it as a pure waste of money adding that any deal should be based on objective rather than political criteria. Transparency, said Indarti, remained paramount to prevent corruption.

Dutch rejection, change of plan

The deal is also for a number of
light German "Marder" tanks

Originally, Indonesia had planned to buy used Leopard tanks from the Dutch army. However, the Dutch parliament rejected the deal earlier this year over concerns about human rights abuses. An Indonesian army spokesperson said that there were other possibilities - namely Germany.

Opponents of the weapons deal are now relying on the German government.

"Even if the weapons deal is not negotiated directly with the German government, but with a company instead, the government still needs to give its permission," stressed Survival International's Ebeling, hoping the government would carefully consider the situation of human rights in Indonesia.

Indonesia, Germany team on geothermal energy

Deutsche Welle, 12 July 2012

Indonesia is said to have the world's largest geothermal energy reserves but their potential remains mostly untapped. That could soon change with German know-how.

With 240 million people, Indonesia is the biggest and fastest growing market in Southeast Asia. And as the country's economy grows, so, too, does its demand for electricity.

President Susilo Bambang Yudhoyono is a self-acclaimed fan of "green energy." In a meeting with German Chancellor Angela Merkel during her recent visit to Indonesia, Yudhoyono talked about one of his major goals: to give greater focus to alternative energy resources such as wind, solar and, in particular, geothermal heat.

Untapped resources

Volcanic areas, like Indonesia, are a rich source of geothermal energy. The island nation is situated on the so-called "Ring of Fire" volcanic belt, which encircles the Pacific Ocean, accounting for 40 percent of the world's geothermal reserves - more than any other country. 

Indonesia lies in Pacific's volcanic
'Ring of Fire'

The government has pinpointed 250 locations where geothermal energy can be produced, including Seulawah on Sumatra, Ijen on Java and Tomohon on Sulawesi. Today, just 15 geothermal plants are in operation, with the last one going live in 1997.

Not all geothermal fields, however, are suited for commercial energy use because they don't have the right temperature, pressure or permeability.

"With geophysical, geochemical and geological tests, you try to get a picture of what it looks like inside the Earth," says Thorsten Schneider from Germany's KfW Entwicklungsbank in Jakarta.

After the test, drilling begins, representing a huge financial risk, according to Schneider. "A typical drilling costs between 3 and 5 million US dollars," he says. "And if you find nothing, the money is gone."

Expensive undertaking

Building a geothermal power plant is an expensive undertaking. Its costs are estimated to be two to three times more than that of a coal power facility, according to Schneider. 

Volcanic areas are ideal sites for
geothermal energy plants

In addition to costs, Indonesia's excessive bureaucracy, tough regulations and strict government price controls add to the challenges. So the country, concedes Schneider, "has a bit of a problem at the moment."

Most of the geothermal power plants in operation in Indonesia today are run by the state-owned natural gas and oil company PT Pertamina.

But in a move to tap into the country's vast geothermal reserves, the Indonesian government has opened the doors to foreign investment and know-how.

German money and know-how

Today, Germany is one of the biggest supporters, together with Japan, Australia and the US. The German government has earmarked 300 million euros in aid. 

Although Germany is not a "volcanic country," it has extensive geothermal expertise, admits Professor Ernst Huenges from the German Research Center for Geosciences in Potsdam.

"Currently in Indonesia, only geothermal steam is used," he says. "In Germany, by comparison, we're also able to utilize the energy from hot water" to significantly increase power production "by as much as 60 gigawatts."

'Demanding target'

Potential business opportunities also exist for German companies, points out KfW's Schneider. "Building power plants, with all the electronics and other technical equipment involved, is certainly of interest to German businesses," he says.

Merkel and Yudhoyono have agreed to collaborate in increasing Indonesia's share of renewable energies to 25 percent by 2015.

Schneider calls the target "utopian." Merkel, on the other hand, prefers more diplomatic language, referring to the agreement as a "demanding target," which Germany can help Indonesia achieve.

Few will disagree, however, that there is plenty of work to be done - and some risk involved - if Indonesia wants to tap its vast reservoirs of geothermal energy deep down.

Author: Monika Griebeler / jrb

Editor: Sarah Berning

Related Article:

Geothermal Power Could Help Bridge Indonesia's Energy Gap: WWF

INDONESIA: BMW starts assembling 5-series in Indonesia

Just-Auto, Tony Pugliese, 15 December 2011

BMW has begun assembly of its 5-series in Indonesia, at the PT Gaya Motor plant in Jakarta which is owned by its local distributor PT Astra International.

The plant, which also makes the 3-series model as well as vehicles of other brands, has an initial capacity of four 5-series units a day. This will be increased to eight in early 2012. Around 80% of local 5-series sales are expected to be assembled at the plant.

BMW sold 1,399 units in the January-November period of 2011, including 496 3-series and 394 5-series.

German Metro Chain to Enter Indonesian Market

Jakarta Globe, June 12, 2011           

Berlin. Germany's giant Metro distribution chain Friday announced it is extending its international business empire to Indonesia where it wants to open some 20 supermarkets.

(Photo courtesy of Metro AG's Web site)

Its Cash-and-Carry division will soon be opening a wholesale distribution superstore in Jakarta, the firm said in a statement.

Metro has set up a joint venture with Indonesia's Sintesa holding, but its shops will not be able to bear its international trade logo as others already operate under that name in Indonesia.

The firm said it was looking for a new name to go by in Indonesia.

Metro is already active in 34 countries and its Cash-and-Carry division operates some 700 stores in 30 of them.

Agence France-Presse

BMW to Double Domestic Capacity in Indonesia

Jakarta Globe, Faisal Maliki Baskoro, May 31, 2011

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Luxury carmaker BMW has announced that its local unit will invest Rp 100 billion ($11.7 million) over the next two years to double its production capacity.

Luxury carmaker BMW has announced that its local unit
will invest Rp 100 billion ($11.7 million) over the next two
years to double its production capacity. (JG Photo)

“BMW’s growth in Indonesia has been wonderful,” Graeme Grieve, global vice president of BMW, said in Jakarta at the local unit’s 10th anniversary on Tuesday. “Indonesia’s robust economic growth and promising future are the reasons behind our expansion.”

Grieve said the expansion, scheduled to start in September and finish in March, would double daily automobile output by modernizing the assembly line of partner Gaya Motor, a unit of Astra International.

“Production capacity will increase from four cars per day to eight cars per day,” he said. “In the long term, we expect to have a production capacity of 3,000 units per year.”

After officially launching the convertible 650i and 640i at the anniversary party, Grieve added that the production facility would also begin assembling BMW 5 Series midsize sedans in addition to the 3 Series. The Mini luxury economy car will also arrive in the market by the end of this year.

“With a worldwide sales volume of 230,000 units, the Mini is a leader in the compact premium car market segment,” he said. “We believe the Mini will be very successful here.”

BMW Indonesia’s car sales increased 38 percent last year to 1,500 units from a year earlier, more than double the gain in the broader auto sector. “Sales in Indonesia are relatively small compared to our worldwide sales of 1.5 million units, but we have identified Indonesia as a growing market,” Grieve said.

Ramesh Divyanathan, president director of BMW Indonesia, said the company had seen an average sales increase of 30 percent over the past three years. “BMW’s market share in the luxury car segment also increased to 27.9 percent in the first four months this year from 7.7 percent in the same period last year,” he added.

Car sales in Indonesia are projected to grow by as much as 15 percent to 850,000 units on the back of increasing purchasing power and auto financing.

Germany assists RI in forest, climate change program

Antara News, Thu, May 26 2011

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Jakarta (ANTARA News) - Germany has committed to assisting the Indonesian government in the Forest and Climate Change program (ForClime).

The ForClime program will be carried through two cooperation moduls, namely Technical Cooperation (TC) via GIZ with funds worth 6.75 million Euro and Financial Cooperation (FC) through KfW worth 20 million Euro, the forestry ministry said here Thursday in a press statement.

The program has a target to decrease the CO2 emission rate from deforestation and forest degradation by 300 to 400 thousand tons during a seven-year period.

The assistance was provided as the result of the bilateral negotiation held in October 2007.

The ForClime program launching was marked by "ForClime FC-Module National Kick-off Workshop".

The program`s demonstration activities on REDD+ (Reducing Emission from Deforestation and Forest Degradation) is implemented in three districts on Kalimantan Island, namely Kapuas Hulu, Malinau and Berau.

The objective of the program is to cut the greenhouse gas emission from the forestry sector and to improve the living condition of the rural people.

The gas emission rate will be reduced by addressing the main drivers of deforestation and forest degradation occurring the conserved forests, protected forests and production forests.

President Susilo Bambang Yudhoyono recently signed a Presidential Instruction on deforestation moratorium to help curb the climate change impacts and preserve the remaining tropical forests and biodiversity in it.

The presidential decree on a moratorium on logging concessions for two years was only applicable to primary forests and peat lands in conserved forests, protected forests, production forests and the Other Use Land (APL).

Indonesia hosts the world`s third largest forest area after Brazil and Congo (formerly Zaire). Based on forestry ministry 2010 data, Indonesia has around 130 million hectares of forests, including 64.2 million hectares of primary forests, and 24.5 million hectares of peat lands.

Editor: Heru

Volkswagen to build factory in Indonesia soon

Antara News, Thu, May 5 2011 

Jakarta (ANTARA News) - European car maker Volkswagen will soon build a factory in Indonesia or at the end of 2011 at the latest, Industry Minister MS Hidayat said.

"I have had a talk with them (Volkswagen) about their plan. They already have a blueprint on the project," said Hidayat after attending the ASEAN-UE business summit at the Jakarta Convention Center (JCC) here on Thursday.

Volkswagen had been exploring the possibility of setting up a production facility in Indonesia for the past three years and now it was hoping to realize it later this year, Hidayat said.

Volkswagen`s intention to expand its business in Indonesia was in line with the European country`s plan to increase its investment in Indonesia, especially in the automotive sector which had huge market potential.

Hidayat, however, did not mention the amount Volkswagen would invest in Indonesia.

The minister said the German auto maker`s plan to set up shop in Indonesia was in line with the exhaust emission standards campaign in 2012 towards Euro-3.

"This is good news for the domestic automotive industry because the European automotive industry has no base yet in Indonesia where the market is so far dominated by Japanese and Korean brands," Hidayat said.

According to earlier reports, the investment value of the would be Volkswagen factory in Indonesia was about 35 million euro and it was expected to absorb 2,000 to 4,000 workers.

The ASEAN summit is scheduled to take place at the Jakarta Convention Center on May 7-8, 2011.

Editor: B Kunto Wibisono

Germany Invests 104 Million Us Dollars In Tala PLTA

Antara News, Thu, April 28 2011

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Ambon (ANTARA News) - The German government agreed to invest 104 million US dollars in building a hydro-power plant (PLTA) in Tala, western Seram regency in Maluku.

"Tala PLTA has a capacity of 4 x 15 megawatts (MW) to be built soon to foster power supply system in the area," general manager state power company PT. PLN for Maluku and North Maluku I Nyoman Astawa said here Wednesday.

PLTA Tala will be built after the completion of Piru steam power plant (PLTU) which will have a capacity of 2 x 3 MW.

Tala PLTA is also a PLN long term program stretching to 2020, for fostering the power supply system in Ambon Island, and later to Seram Island, Southeast Maluku, and other areas in Maluku.

Maluku and North Maluku provinces are for the time being electrified by solar power plants (PLTS).

And because diesel power plants are too costly to build, PLN also had problems in the transportation of fuel oil, he added

Editor: Aditia Maruli

Germany's Metro Group to open local outlet in 2012

Rangga D. Fadillah, The Jakarta Post, Jakarta | Tue, 03/22/2011

German-based retail giant Metro Group said on Tuesday it would open the first of about 20 planned retail outlets in Indonesia by 2012.

Metro Group chief executive officer Eckhard Cordes said in a press statement that over the past several years, Asian countries, including Indonesia, have emerged as potential targets for retailers seeking to expand their businesses.

“The presence of Metro Cash & Carry in Indonesia will create great momentum for our business expansion in the Asian market,” he said.

Cordes said Metro would open around 20 Metro Cash & Carry outlets across Indonesia, with the first to open in 2012, if the economic conditions in Asia remained stable.

In the past 15 years, Metro Cash & Carry has opened stores in China, India, Japan, Vietnam and Pakistan. Indonesia would be the 31th country in the world that to have Metro Cash & Carry outlets, according to the release.

“With …a fast-growing economy and strong domestic consumption, Indonesia offers abundant potential for our retail business,” Metro Group management council member WH Muller said.

PLN to build six power plants with foreign capital

Antara News, Tue, March 1 2011

Jakarta (ANTARA News) - State electricity company PLN is to build six power plants in 2011 with overseas investment totaling 3.006 billion US dollars, according to the company in a document prepared for a meeting with the parliament on Tuesday.

The investments are meant for the construction of the 2,000MW Indramayu thermal power plant (West Java), Hulu Lais thermal power plant (110MW) at Bengkalis, Riau province, Tulehu thermal power plant (20MW) in Ambon, Maluku province, Kotamobagu thermal power plant (three units, 80MW) in North Sulawesi, Sungai Penuh thermal power plant (110MW) in Jambi province and Mataloko thermal power plant (5MW) East Nusa Tenggara province.

PLN had proposed the construction of those power plants in its medium term overseas grant credit plan (DRPHLN-JM) for 2010-2014.

The Indramayu power plant will need the lion`s share of the investment of 2.971 billion US dollars, 2.525 billion US dollars is expected from overseas credit and the rest 446 million US dollars will be the counterpart funding.

Hululais will need a credit of 147 million US dollars, Tulehu needs 65 million US dollars, Kotamubago needs 110 million US dollars, Sungai Penuh requires 140 million US dollars and Mataloko needs 19 million US dollars.

PLN Finance Director Setio Anggoro Dewo said in the hearing with the House of Representatives` Commission VI that some of the projects are already in the stages of engineering study while some others in feasibility study.

He said Japan International Cooperation Agency (JICA) is to fund the Indramayu, Hulu Lais and Tulehu projects.

Kotamobagu will be funded by Kreditanstalt fur Wiederaufbau (KfW), a German government-owned development bank, based in Frankfurt, whereas Sungai Penuh and Mataloko will be financed by the Manila-based Asian Development Bank (ADB).

PLN for 2011 has allocated a capital expenditure of 77.398 trillion rupiahs and 62.13 trillion rupiahs for 2012.

For 2011 PLN breakdowns the capital expenditure of 35.87 trillion rupiahs for electricity generation, transmission 29.34 trillion rupiahs and distribution 12.186 trillion rupiahs.

On operational expenditure, PLN will spend 175.19 trillion rupiahs for fuels and lubricant and purchase of electricity from private companies.

Editor: Heru

Germany disburses Rp 90b for geothermal project in Aceh

Nani Afrida, The Jakarta Post, Jakarta | Tue, 01/18/2011

German development bank KfW has disbursed a total of Rp 90 billion or 7.72 million euros (US$9.9 million) in grants to Indonesia to finance geothermal exploration activities in Aceh.

Indonesia’s Finance Ministry debt management director general Rahmat Waluyanto said Tuesday the activities were part of the government’s target to develop geothermal power plants with a total capacity of 12,000 megawatts across the country.

“Indonesia needs 18.7 million euros to construct a geothermal power plant in the area [Aceh],” Rahmat said.

He added that the Aceh administration would allocate Rp 2.5 billion for the same project, and that the remaining funds needed were expected to be covered by a company's winning bid on the project.

Rahmat said the project was also part of Indonesia and Germany’s partnership in tackling climate change.

Volkswagen set to invest 140 million dollars in Indonesia

Antara News, Wednesday, September 1, 2010 01:30 WIB

Jakarta (ANTARA News ) - Volkswagen AG (VW), the German giant automotive company, will make a 140 million US dollar investment in Indonesia, for which it had a meeting with the Industry Ministry.

"The meeting early this week discussed investment prospects in Indonesia. And a VW representative will return and again meet the industry ministry for finalizing the investment plan," President Director of PT Garuda Mataram Motor (GMM) Andrew Nasuri said here on Tuesday.

Andrew said VW planned to build a factory with a capacity of producing 50,000 units in 2012. The plant was scheduled to become operational in 2013. VW was still making a selection of the location of the plant, including in Cikampek, West Java.

The building of the plant, Andrew said, was aimed to make VW products to become competitiveness in the Indonesian market, in meeting VW`s ambition to become the number one player in the automotive business in the world, beating Toyota and General Motors.

He believed that the price of VW products can be reduced by up to 40 percent if production is done in Indonesia, because VW will enjoy import duty cuts, if the cars are imported in CKD (completely knocked down).

Andrew said cars that had been imported in CBU (completely built-up) had reached 45 percent, and only 10 percent in CKD.

Right now, he added, the import duty of VW cars is still too high, although some had already been built in Indonesia, like Touran and Golf TSI, because the shipment of the cars from Germany was still in roll form.

Giving an example, he said that the price of a Touran (multi purpose vehicle/MPV) reached Rp395 million, much higher than Rp 250 million of a Toyota Kijang Innova.

"Localisation would be necessary for competitiveness. Risks had to be taken to enjoy a high growth of the Indonesian market," he said.

This year, GMM planned to raise its sales by 236 percent reaching 400 units, while last year reached only 122 units. The increase in the sales was triggered by the release of locally assembled VW Golf TSI with a price tag of Rp339 million.

Thousands of Schools Attend Training on Disaster Risk Reduction

Tempo Interactive, Friday, 06 August, 2010 | 14:59 WIB

TEMPO Interactive, Yogyakarta: As many as 2.293 schools in Yogyakarta have organized training on disaster risk management for students and teachers. Yogyakarta is an area susceptible to disasters, from earthquakes, tornadoes, to landslides. The training was facilitated by Arbeiter Samariter Bund, a Germany-based non-governmental organization.

“We have been providing education on disaster risk management to schools since 2006,” said Yogyakarta Arbeiter Samariter executive, Wahyu Sulastomo, yesterday. For this program, Arbeiter Samariter is cooperating with the local Education Office, the Yogyakarta Disaster Risk Reduction Forum, and the European Commission Humanitarian Assistance.

According to Wahyu, in 2006, their training program began from schools in Sleman, Bantul, Yogyakarta regencies. The next year, they moved to Gunungkidul and Bantul, and in 2008 the training was held in Klaten, Central Java.

This Saturday, Wahyu said, disaster preparation training will be organized for children with special needs at the Gadjah Mada University. The program will last for 15 months, involving children from 35 sub districts and 230 villages in Yogyakarta.

Suroyo, the Yogyakarta Education, Youth, and Sports Office chief in charge of Special and Basic Education, said all schools in Yogyakarta are required to follow a disaster risk management simulation every three months.

Besides the training, he continued, at least 90 percent of the school buildings in Yogyakarta are earthquake-resistant. “After the earthquake in 2006, schools in Yogyakarta are designed to resist earthquakes,” he said.

MUH SYAIFULLAH

Indonesian scientists to discuss climate change in Germany

The Jakarta Post, Antara, London | Tue, 06/22/2010 5:32 PM

Indonesian scientists and professionals will hold a conference on "Technology cooperation and economic benefit of reduction of green-house gas emissions in Indonesia", in Hamburg, on Nov. 1 and 2, 2010.

The conference would be organized jointly by the Indonesian embassy in Berlin, the Indonesian consulate general in Hamburg, the Association of Indonesian scientists and academicians and the Hamburg chapter of the Indonesian-German Association, Yayat Sugiatnya, Indonesia's acting consular general in Hamburg, told Antara in London, Tuesday.

The conference will focus on three climate change-related topics, namely renewable energy development, increased energy efficiency in the industrial sector and urban waste management to reduce greenhouse gas emission.

Some 25 scientists and professionals from Indonesia and Germany will speak in the conference also aimed at boosting research cooperation between Indonesia and Germany.

According to Yayat, Indonesia has around 28 GW geothermal energy source. Besides, the country also has renewable energy sources such as wind, solar and hydro energy which have not yet been optimally exploited.

If those energy sources could be used, it would help cut gas emission rate, he said.

He also called for active participation of Indonesian scientists and professionals in Germany to encourage transfer of technology from European countries, Germany in particular, to Indonesia.

Government Signs Geothermal Loan From Germany

Tempo Interactive, Tuesday, 20 April, 2010 | 15:34 WIB

TEMPO Interactive, Jakarta: Indonesia signed on Tuesday (20/4) a seven million euro soft loan package from Germany to fund geothermal projects in the country, which some of the loan have been disbursed since 2007.

Director General of America – Europe at the Foreign Department Retno Masudi said after the signings with German Ambassador Norbert Bass at the Foreign Department, that Germany has the technology for the projects while Indonesia has 40 percent of the world's geothermal potentials.

“The projects will be developed in a mixed policy and aimed at taking geothermal contribution (in domestic energy use) to five percent by 2025.”

Both sides also formalised several past cooperations which include post tsunami reconstruction for Aceh, Central Java and Yogyakarta reconstruction since 2006, totalling 111 million euro.

CORNILA DESYANA

RI, Germany sign six cooperation agreements

Antara News, Tuesday, April 20, 2010 21:38 WIB

Jakarta (ANTARA News) - Indonesian and Germany signed on Tuesday six technical and financial cooperation agreements with a committed value of 111,130,000 euros.

Director General of America and Europe at the Foreign Ministry Ambassador Retno L.P. and German Ambassador to Indonesia Norbert Baas signed the agreements at the Foreign Ministry building here.

The six agreements are related to a number of post-tsunami reconstruction projects in Aceh, post-quake reconstruction projects in Central Java and Yogyakarta and the financing of technical cooperation projects.

With the signing of the six cooperation agreements, development cooperation between the two countries in the relevant sectors had now entered the implementation phase and the two nations were prepared to continue their talks on Thursday.

Indonesia Orders New Trains From Bombardier

Tempo Interactive, Tuesday, 06 April, 2010 | 19:18 WIB

TEMPO Interactive, Jakarta: The Transport Department has handed Swedish vehicle producer Bombardier Inc. a 32-million euro contract to build ten sets of electric trains for Indonesian railway company PT Kereta Api.

The departement said the trains will reinforce Jakarta's commuter railway network and Bombardier is expected to complete the trains in 2011.

Safety and Technical Director of the Transport Department's railway directorate Hermanto Dwiatmoko said on Tuesday, german KfW banking Group provided soft loan for the trains through a deal signed with the Finance Department in 2008.

International tender was part of the requirements by KfW Bank for the order, which then held in europe and won by Bombardier which teamed up with PT Kereta Api.

“Bombardier will produce motor traction and control system while PT Kereta Api will assemble an install the system,” Hermanto said.

The project also involve order for two 5,000-kilowatt railway substations, won by Siemens – PT LEN Industri.

The railway directorate said to inspect production of the traction motor and control system in Bombardier's facility in Sweden, next week, although production is scheduled to begin later this year.

DESY PAKPAHAN

Godrej Consumer buys Indonesian co for Rs 1,200 cr

Rs 600-cr Megasari makes household items.

Business Line, Our Bureau, Mumbai, April 6

Godrej Consumer Products (GCPL) has acquired Indonesia-based PT. Megasari Makmur Group for an estimated Rs 1,200 crore, its biggest buy so far. HSBC was the advisor to the transaction.

The Rs 600-crore Megasari group is a manufacturer and distributor of household products which include household insecticides, wet tissues and air fresheners. It is less than 15 years old and has plants in West Java.

Megasari is also the second largest player in the household insecticide market in Indonesia having a 35-per-cent share in the category with brands such as the Rs 250-crore Hit (household insecticide) followed by smaller brands Stella (air fresheners) and Mitu (babycare).

Interestingly, one of Godrej's own insecticide brands is called Hit.

Mr A. Mahendran, Director, FMCG Portfolio Cell for the Godrej Group, told Business Line, “The funding for the acquisition has been done through a mix of debt and internal accruals.”

Biggest deal

This is the biggest deal for the group so far and also makes it the third largest acquisition by an Indian company after the Tetley and Glaceau buyouts made by the Tata Group. For GCPL, this is the fifth acquisition. It recently bought the Nigerian personal-care company Tura, two hair care brands in South Africa, and the UK-based Keyline brands. More buys are in offing with the group keen on building a global presence.

In fact, according to analysts, mid-sized Indian FMCG companies are well positioned to go in for similar acquisitions especially when the rest of the world is still recovering from the 2009 global crisis.

Mr Mahendran said, “We will be taking our own products and leveraging the distribution strengths to emerge the leader in Asia's household insecticide business. We are already the leaders in the category in India, but are No 3 globally in this category after SC Johnson and Reckitt Benckiser.”

A cross-functional team comprising Godrej and Megasari employees will be headed by Mr Naveen Gupta, who will help integrate the operations of the two companies.

Mr. Adi Godrej, Chairman, GCPL, said: “Megasari Group provides us a strong platform to establish a significant foothold in Indonesia, which is among the largest consumer markets in Asia. As an emerging market multinational, this acquisition is an important step in our global 3 by 3 strategy, that is, presence in three continents — Asia, Africa and Latin America — through three core categories — home care, personal wash and hair care.”

GCPL has a 49 per cent stake in Godrej Sara Lee and is in the process of buying out the balance in the company. It is also acquiring the global assets of Sara Lee's household insecticide business.

GCPL has already got shareholder approval to raise up to Rs 3,000 crore through a combination of debt and equity which would be used for international acquisitions as well as to buy out Sara Lee.

The GCPL scrip was up 2.19 per cent on Tuesday and closed at Rs 277.60

Related Article:

Indian Group Snaps Up Indonesian Insecticide Maker Megasari

Residents benefit from underground river water

Slamet Susanto, The Jakarta Post, Gunung Kidul | Sat, 03/13/2010 12:28 PM

Public Works Minister Djoko Kirmanto has inaugurated the underground river water-pumping project, which is expected to provide clean water for 75,000 residents in Gunungkidul, Yogyakarta.

The project, Bribin II, is located in Sindon, Dadapayu, Semanu, Gunungkidul.

The source of water from the underground river, located 104 meters below the ground, is pumped up to the surface by using microhydro power and later channeled to a reservoir on a hill 250 meters high and then distributed to residents’ homes.

Four pipes are used to pump water to the surface, each at a capacity of 80 liters per minute.

The inauguration ceremony on Thursday was marked by switching on the tap that discharged a flow of water in the national colors of respective Indonesian and German flags, as a symbol of cooperation between the two countries in the water-tapping project.

“Thanks to the cooperation between Indonesian and German experts, now Gunungkidul residents, who used to face water shortage during the dry season, can enjoy clean water from the belly of the earth,” Djoko said.

He added the Bribin II project had undergone through an eight-year process.

Launched 2002, the project was suspended due to the earthquake in 2006.

In 2009, after several trials, the workers were able to draw out underground river water to the surface.

The Bribin II project, which is a joint-venture with the Karlsruhe Institute of Technology in Germany, is the first of such a project in the world which works by drawing underground river water from a depth of 104 meters without using electricity.

Head of the Serayu-Opak River Area Center Bambang Hargono said his office was only responsible for operating the equipment and extract water to the surface.

“Water distribution and operational expenses are the domain of responsibility of the local tap-water company.”

RI, Germany to strengthen cooperation in clean energy

The Jakarta Post, Jakarta | Fri, 02/12/2010 12:31 PM

German Ambassador to Indonesia Dr. Norbest Baas met with the chairman of the People’s Consultative Assembly Taufik Kiemas Friday to discuss the potential of strengthening investment and cooperation between the two countries.

“Our focus is to attract more German businessmen to invest in Indonesia,” the ambassador said after the visit, citing Indonesia’s current promising economic performance.

He said the clean energy sector would be the ultimate target for investment because Indonesia had great potential for developing non-fossil fuel energy, such as geothermal, wind and solar energy.

He added that the German economic minister would visit the country soon, together with representatives of the German business community, to explore the potential.

Regarding the potential for expanding economic ties, Taufik said: “Indonesia will also send delegates to Germany to strengthen ties between the businessmen of the two countries.”

He said that Indonesia and Germany had a long history of economic cooperation, and pointed out that Germany company Siemens was one of the multinational corporations that stayed in Indonesia during the economic crisis of 1997. (rdf)