Saudi's STC to increase stake in Indonesia's NTS

Reuters, Sat Mar 12, 2011

• Saudi Telecom to raise stake in Indonesia's NTS
• To provide loans of $81 mln, followed by $290 mln

(Reuters) - Saudi Telecom Co (STC) said on Saturday it planned to rase its share in its affiliate NTS in Indonesia to 80 percent, and lend it more than $370 million, as it readies to expand in the Indonesian market.

Natrindo Telepon Selular (NTS Indonesia), now 51 percent owned by STC and 44 percent owned by Malaysia's Maxis Communications Bhd (MCB) , has set up a five-year plan to expand in Indonesia's telecom market, STC said in a bourse statement.

"Saudi Telecom has shown interest in taking this opportunity to increase its shares in (NTS) due to the growth prospects in the Indonesian economy," STC said.

"It agreed on Wednesday to give an initial loan of $81 million, followed by another loan of $290 million to be paid according to the firm's operational needs," the firm said.

The deal will cancel all the loans made to NTS by Maxis Communications, amounting to almost $412 million, and increase STC's stake to 80.1 percent from 51 percent.

Maxis Communications' share will fall to 14.9 percent from 44 percent, while the local partner will maintain a 5 percent stake.

The deal has yet to be approved by the Indonesian regulators.

NTS began its mobile phone services in 2008 and has more than 10 million customers, covering 400 cities in Indonesia, the statement added.

(Reporting by Asma Alsharif; Editing by Clarence Fernandez)

RI admits lack of cooperation with Saudi over migrant workers

The Jakarta Post, Jakarta | Mon, 11/22/2010 9:54 AM

The Indonesian government has admitted it proposed but never signed a draft of a memorandum of understanding intended to improve protection for Indonesian migrant workers in Saudi Arabia, a top official says.

Manpower and Transmigration Ministry Secretary-General Setyoko said Sunday that Indonesia had a long time ago proposed a legal basis to guarantee protection for Indonesian migrant workers in Saudi Arabia.

“We proposed the MoU a long time ago. But, the agreement requires the political will from both parties to sit together and cooperate,” Setyoko said as quoted by Tempointeraktif.com.

Setyoko declined to comment on why both Indonesian and Saudi Arabian had not signed the agreement.

“We keep trying to use our diplomatic channels to talk about the issue. We are still waiting for the outcome of the talks,” he said.

“We will also invite the Saudi Arabian manpower ministry to discuss the draft of the agreement as soon as possible,” he added.

More than 4,300 Indonesian migrant workers were currently facing hardship, ranging from illness to sexual abuse, the Indonesian government said earlier.

That number constitutes 0.1 percent of the total 3.27 million Indonesian migrant workers worldwide.

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PP signs property contract with Bin Laden Company

Nani Afrida, The Jakarta Post, Jakarta | Sun, 01/31/2010 5:57 PM

State construction company PT Pembangunan Perumahan (PP) has secured Rp 16.2 trillion ($1.8 billion) worth of contracts this year, including two with the Binladen Group construction conglomerate and holding company in the Middle East.

On Sunday, PP said in a statement that the two contracts from Binladen Group (SBG) were worth Rp 500 billion, but did not provide further details.

“We will also get additional work from the company worth Rp 1 trillion,” PP director Musyanif said.

PP’s domestic projects include the development of Hasanuddin University in South Sulawesi, a project worth Rp 450 billion.

Rp 3.6 trillion worth of the contracts for 2010 were carried over from 2009, he said.

Last year the company signed Rp 12.6 trillion worth of new contracts, twice the amount it had signed in 2008.

Foreign Investors to Rise Agriculture Investments in Papua

Tempo Interactive, Wednesday, 20 January, 2010 | 15:36 WIB

TEMPO Interactive, Jakarta: The Agriculture Department said more foreign and domestic investors are interested to food and agriculture potentials of Papua and China, Saudi Arabia, and Singapore are venturing opportunities to invest in food estate projects in the island.

Vice Agriculture Minister Bayu Krishnamurti said on Wednesday (20/1) “They are ready to invest, to build farms, factories and industries.”

Bayu said the investments will be directed mainly to Merauke Regency where the government have prepare 500,000 hectares of land with total land potentials up to 1.5 million hectares. The area is most suitable for rice and cane and in certain areas for garians and corn, but the land type is not very good for other kinds of crops.

The government, he said will support investments by improving infrastructures, “Some of the state budget will be allocated (for the region) especially to build infrastrctures.” But Bayu refused to reveal investment projections for the region saying there will be more than one company come to invest their money, adding that the cost sharing scheme between government and investors will depend on the business plan.”

EKO ARI WIBOWO

Indonesian Govt Gives Green Thumb-Up To Plant Papua ‘Food Estate’

Jakarta Globe, Arti Ekawati & Muhamad Al Azhari

Wamena women selling cabbage in a Papua market. The government hopes the food estate will transform agriculture in its largest province. (Antara Photo)

The government is moving forward with the country’s first integrated food production zone in Merauke, Papua, a minister told the Jakarta Globe on Sunday.

“Drafting of the [food estate] regulation has been finished and it is ready to be signed by the president,” Agriculture Minister Suswono said.

The food estates, as they are known, are designed to stimulate large-scale investment in the agriculture sector and beef up food security. The developers will be prevented from exporting any of their produce until the nation’s food needs have been met.

If the pilot project, which aims to attract domestic and international investors with a series of tax breaks, is successful, the government hopes to establish similar zones elsewhere in eastern Indonesia.

The completion of the food estate regulation was one of the objectives of the government’s program for its first 100 days.

According to the ministry, the pilot project will see 1.6 million hectares of land in Merauke transformed into an integrated farming, plantation and livestock zone, where companies will grow, process and package their products in one place.

The government plans to give investors financial incentives such as tax breaks and reductions in customs and excise duty, according to the ministry.

The government will also look to streamline the land acquisition process and facilitate immigration for foreign workers.

However, Suswono stressed that “the government will put Indonesian investors in first priority before inviting foreign investor to invest in Merauke.” Overseas investors will have work with a local partner and will be restricted to a maximum 49 percent ownership of any joint venture.

In addition to farming, the project will support a wide range of agricultural businesses including, post-harvesting industries such as sorting and grading, packing, storage and processing as well as agri-tourism.

One million hectares of lands will be available to produce food crops such as rice, soy bean and corn. The rest will be split between plantations, fisheries and livestock. Investors will have to purchase a minimum of 1,000 hectares of land each.

But the development, which will require some residents to sell their land, has met opposition from locals and non-government organizations, who have warned of possible social and environmental problems.

The Indonesian Farmers Union (SPI) has said that the food estate regulation will lead to a “land grab” by big businesses at the expense of locals.

“This will eventually lead [the country] to losing sovereignty in our food [production],” the union said. “Food estates could also lead to feudalism because the role of the indigenous farmers will be just to provide labor to the capital owners.”

Bungaran Saragih, a former agriculture minister, expressed similar concerns. “There is potential for social conflict between the original residents and the newcomers,” he told the Jakarta Globe last month.

SPI said on its Web site that a handful of local investors have showed an interest in the Merauke project so far: PT Bangun Tjipta, Medco Group, PT Comexindo Internasional, PT Digul Agro Lestari, PT Buana Agro Tama and PT Wolo Agro Makmur.

The union also said executives from Binladin Group, a Saudi Arabian conglomerate, have visited Merauke to examine the project’s potential.

$600m Lombok Resorts Scrapped

The Jakarta Globe,  Janeman Latul, March 14, 2009 

Citing governmental paralysis and hinting that too many officials had their hands out, Dubai’s state-owned Emaar Properties PJSC has cancelled its massive $600 million property project that was to turn the pristine island of Lombok into another Bali. 

“We have closed our office in Jakarta starting Friday,” said Elly Savitri, Emmar Indonesia’s human resources manager. “Emaar has pulled out of its operations in Indonesia because the government cannot comply with the terms of the agreement with our joint venture company. 

“There have been too many delays on the realization of the project and the company just could not wait any more.” 

Elly also said Emaar had spent Rp 50 billion ($4.2 million) in consultancy fees on master plans. 

Winarno Sujas, the Tourism Ministry’s director for businesses and investment, told the Jakarta Globe on Friday that Vice President Jusuf Kalla had summoned the related ministries for a meeting this coming Wednesday in a bid to save the project. 

The cancellation of the project — announced with great fanfare in May 2007 by Kalla — is an enormous black eye for the Indonesian government and the local government of Lombok, West Nusa Tenggara Province. 

“Indonesia is our 16th global market and the Lombok development will scale up our property portfolio to a wider Southeast Asian region,” Muhammad Ali Al Abbar, Emaar Properties chairman, said at the project signing. 

The announcement of the failure of the project follows the recent pullout of the Saudi Binladin Group from a project to invest as much as $4.3 billion in developing rice crops in Merauke, Papua Province. 

The joint venture between Emaar and the state-owned Bali Tourism Development Corp. envisioned development of 1,200 hectares along seven kilometers of natural beachfront that would have transformed central Lombok’s Kuta and Tanjung An beaches over the next 12 years into a world-class resort and residential community consisting of 10,000 luxury villas, eight hotels and two 18-hole golf courses. 

Emaar’s Elly said the agreement stipulated that the government would provide a detailed master plan by last November to support infrastructure including an international airport, an access road to the property and finalizations of land acquisitions. The finalizations, however, never materialized. 

A plethora of government agencies failed to complete their part of the bargain and asked for an extension until this month. When Indonesian officials asked for another extension until June, Emaar called off its investment. 

“You understand the Indonesian government,” said an Emaar executive who asked not to be named, in a veiled reference to allegations of corruption in the local and central governments. 

Sumaryanto Widayatin, a special adviser to the Public Works Ministry, blamed unprofessionalism for the tangled negotiations. 

“I think it’s because the Ministry of Finance was worried about selling the land cheaply to Emaar,” he said, adding that the global economic crisis had also cut into the company’s liquidity. 

He said every large project in this country attracted officials who had their hands out. 

“Where in Indonesia do we not have the problem of corruption?” he asked.

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Eximbank to open branch office in Singapore

The Jakarta Post | Sat, 03/14/2009 7:07 PM  

Indonesia's Eximbank, which will execute the Indonesian export financing institution (LPWI) scheme, is planning to open branch offices in Singapore and Saudi Arabia in order to facilitate Indonesian exports, Bank Ekspor Indonesia president director Arifin Indra said as reported by Antara news agency. 

"The branch office in Singapore will be opened next year. At home three marketing branch offices will be opened in Medan, Makassar and Surabaya this year," Arifin Indra said over the weekend. 

Bank Ekspor Indonesia (Indonesia export bank) is a bank which is assigned to prepare the operation of Indonesia Eximbank and to popularize Law No. 2 2009 on LPEI, in an effort to encourage exports amid the current global economic crisis. 

With the operation of Indonesia Eximbank, scheduled on July 1, 2009, Bank Ekspor Indonesia will be dissolved. All of its assets and liabilities as well as its rights and responsibilities will fall under  the responsibility of Indonesia Eximbank.

WIEF sees signings of 4 preliminary deals for $3b

Benget Besalicto Tnb., THE JAKARTA POST, JAKARTA | Tue, 03/03/2009 12:19 PM 
 

 Making partnerships fly: CEO of Dubai Aerospace Enterprise Capital Robert J. Genise (left) listens to the president director of national flag carrier PT Garuda Indonesia, Emirsyah Satar, before the signing of a preliminary agreement on the sidelines of the World Islamic Economic Forum (WIEF) in Jakarta on Monday. JP/R. Berto Wedhatama
 

The first day of the fifth World Islamic Economic Forum (WIEF) saw Monday the signing of four memorandum of agreements (MoAs), worth about US$3 billion. 

MoA is a term introduced during the WIEF event to help cement outline project agreements  that are more than half concluded. 

“These agreements amount to more than $3 billion,” said State Minister for State Enterprises Sofyan Djalil, who is also the co-chairman of the Indonesian national organizing committee of the WIEF. 

“However, the realization of these agreements are still dependant on further studies and competitive tenders. It can be higher or lower than the estimated value,” he told reporters during the three day forum. 

The first MoA is between Bank Muamalat, the country’s largest sharia financing provider, with National Commercial Bank Saudi Arabia on strategic business collaboration on remittance services, and Islamic Payment System Sdn berhad with PT Pos Indonesia on an Islamic payment system network designed to segregate retail money into sharia compliant funds and those that do not  comply with Islamic principles. 

The second MoA, estimated at $350 million, is between national flag carrier PT Garuda Indonesia and Dubai Aerospace Enterprises (DAE), for the sale and leaseback of eight new B737-800 aircraft.

 The third signing, covering two landmark G-to-G agreements estimated to be worth $1 billion, is between Indonesia’s East Kutai Regency of East Kalimantan province and the United Arab Emirates’ (UAE) Ras Al Khaimah (RAK) Investment Authority, for social and economic programs for the region. 

The fourth signing, estimated at $1.7 billion, is between state oil and gas firm Pertamina, the ETA Star Group Dubai, and Itochu Corporation of Japan, to upgrade Pertamina’s Balikpapan refinery. 

“The projects that we signed are more than 50 percent concluded, and we hope that these projects and co-operation will have a snowballing effect,” said Sofyan. 

He said Middle East countries’ investments in Indonesia for the last six years have been substantial, and the  forum shows that Middle East countries are now looking seriously at investment in Indonesia. 

More than 1,557 people, including 1,395 delegates, 85 speakers and reportedly 12 heads of state from 38 countries attended on the first day. 

Ebrahim Patel, the chairman of Minara Chamber of Commerce and Industry in South Africa, said that this had been the largest WIEF since its inception in Malaysia in 2005. 

“The scope of the WIEF  has gone beyond the Organization of Islamic Conference (OIC) nations, it has reached out to non-muslim and western countries which are now creating platforms where interaction between muslim and non muslim businesses can take place,” he said. 

“It’s not just a talkshop it’s an action and project oriented forum,” he added. 

The WIEF was first formed in 2003 during the 10th OIC Summit, and has both corporate and individual members. 

WIEF organizes global and regional forums, with the aim of fostering partnership s between Muslim entrepreneurs and between Muslim and non-Muslim businessmen. The 4th WIEF was held last May in Kuwait. 

At the Forum Muslim countries are promoting increased trade among themselves up to 25 percent in the next seven years to make up for a decline in their traditional markets due to the global crisis. 

The Muslim countries’ share in global trade is about 7 to 8  percent, while their intra-trade has risen  to around 13 percent, as compared to only about four percent in 2004, when the WIEF  was started. 

They account for 19 percent of the world’ population, but only 6 percent of its income. (fmb)

Indonesia urges Pertamina to build new refineries

Thu Feb 12, 2009 7:02am EST  

JAKARTA, Feb 12 (Reuters) - Indonesian President Susilo Bambang Yudhoyono urged on Thursday state oil firm Pertamina to build new refineries to cut imports of oil products. 

Construction of new refineries has become more pressing in the past few years, as growing domestic demand has forced Pertamina to import more fuel, straining the budget and weighing on the rupiah currency . 

Evita Legowo, director general of oil and gas at the energy ministry, told Reuters in an interview last month that the downstream prospects did not look promising, pointing to huge investments needed and low margins. "As we are still importing high amounts of oil products. It would be more efficient if we could build refineries," Yudhoyono told reporters after meeting Pertamina officials. 

"There is a plan to build refineries, however, Pertamina's president director has asked for more tax incentives," Yudhoyono said, referring to the newly appointed president director of Pertamina Karen Agustiawan. 

Yudhoyono asked Pertamina to reach conclusive agreements with ministries so a timeline for builing refineries could be established. 

Pertamina marketing director Achmad Faisal said the state energy firm planned to build new refineries adding a combined 400,000 barrels per day (bpd) of capacity in Indonesia. 

"There are plans to build a refinery in Banten province with a capacity of 150,000 barrels per day and we will expand Balongan refinery by 200,000 barrels per day in future," Faisal said. 

In October last year, Yudhoyono had already issued a decree giving income tax incentives for investment in oil refineries. 

However, a Pertamina official who declined to be indentified, said those incentives were insufficient given profit margins on new refineries were very thin. 

Indonesia is Asia's biggest importer of oil products. 

Pertamina has nine refineries scattered around the archipelago with a combined capacity of around 1 million barrels per day (bpd). But it only supplies 70 percent of domestic oil product consumption and 30 percent comes from imports. 

Pertamina has signed several memorandum of understanding with Iran and China's Sinopec Corp in the past to build new refineries in join ventures. But none of these plans have materialised so far. 

Pertamina and an Iranian company have agreed to build a 300,000-bpd oil refinery in Java island, although construction has not started. 

China's Sinopec Corp has also agreed in mid-2005 to help build a refinery in East Java with a capacity of up to 200,000 bpd, although negotiations have foundered since then. 

Saudi Aramco, Kuwait Petroleum Corp. and Malaysian state oil firm Petronas [PETR.UL] have also expressed interest in building oil plants in Indonesia. 

(Reporting by Muklis Ali; Editing by Ed Davies) 

Indonesia Strikes Oil With Arab Investors

The Jakarta Globe, Janeman Latul & Muhammad Al Azhari, January 30, 2009

Abu Dhabi’s crown prince, Sheikh Mohammed bin Zayed al-Nahayan, is one of two investors from the United Arab Emirates who are set to invest at least $3.7 billion in infrastructure projects and oil refineries in Indonesia by March, said the co-head of the World Islamic Economic Forum on Wednesday. 

“Two foreign investors from the Middle East have already committed around $3.7 billion, out of our forecast of $5 billion in total,” said Tanri Abeng, co-chairman of the Wief and chief commissioner of PT Telekomunikasi Indonesia Tbk, or Telkom. “An investor from Abu Dhabi is in the final stages of investing in infrastructure and energy projects in East Kalimantan and South Sumatra, by teaming up with the two provincial governments.” 

Tanri revealed few specific details about the projects. 

“The Crown Prince himself will be investing, and the total investment will be about $2 billion to $3 billion,” he said. 

Early this month, Tanri said he expected Indonesian companies to sign more than $5 billion worth of deals during the Wief, which will be held from March 2 to 3 in Jakarta. “The figure may end up lower than our projections, but hopefully we will be able to achieve our targets at the forum,” he said. 

The crown prince is the head of Mubadala Development Co., which functions as the main investment vehicle for the Abu Dhabi government. 

Dubai, the second-richest emirate in the UAE, is also interested in investing in Indonesian assets. Tanri said representatives from Dubai were expected to sign a joint-venture agreement with PT Pertamina that would increase the state oil and gas producer’s oil-refining capacity. 

“The value of this investment will be between $1 billion and $1.7 billion,” Tanri said. “[The deal] has come quite far and is now down to lawyer-to-lawyer negotiations. I expect the two sides to actually sign a joint-venture deal during the forum, rather than just a tentative memorandum of understanding.” 

On Jan. 9, Pertamina, Japan’s Itochu Corp. and Dubai-based ETA Star Property Developers announced plans to jointly increase Pertamina’s refining capacity in Balikpapan, East Kalimantan Province, from 260,000 barrels per day to 280,000 bpd by this year.  

Gita Wirjawan, founder of Jakarta-based private equity firm PT Ancora Investment Capital Management, said Indonesia was insulated from the worst of the global economic downturn because of its relatively small export sector. This, along with the country’s mineral resources, made it an attractive investment destination for oil-rich countries. 

“Compared with other countries, we are less dependent on exports. So if you had money, what would you do? It would be better to pour it into this country than an [export-led country] where growth is going to contract,” Gita said. “Don’t forget — investors from Qatar, Abu Dhabi and Saudi Arabia have already invested billions of dollars here.” 

However, Eric Sugandhi, an economist at Standard Chartered Bank, cautioned that inward investment would probably not substantially offset the impact of the global slump. 

“I applaud [the Wief] for the investments, but they won’t come into play until around the second half or early next year.”

Saudi Arabia keen to invest in W Sumatra`s farmland

Padang (ANTARA News) - Saudi Ambassador to Indonesia MA, Al Kayyat, said his country was interested in investment in agriculture and animal husbandry in West Sumatra's fertile land. 

After having a close look at the region and learning its high potentials in agriculture and plantations, the Saudi diplomat became interested in investment in the region, he said with the help of an intepreter here on Thursday. 

He made the remarks in response to West Sumatra Governor Gamawan Fauzi's call for Saudi investment in that region. 

West Sumatra is vast and rich in natural resources and fertile farmland, the ambassador quoted Governor Gamawan Fauzi as saying. 

"The land of this region is fertile and very suitable for agricultural products and vegetables," Al Kayyat said. 

In addition, West Sumatra also invited Saudi Arabia to invest in animal husbandry for raising goats and sheep, especially in Padang City, Pesisir Selatan and Padang Pariaman districts. 

The ambassador said his office would immediately take preparatory measures of investment in the province.

TEI falls short of expectations

Mustaqim Adamrah, The Jakarta Post, Jakarta 

The recent 23rd Trade Expo Indonesia (TEI) recorded a total of US$214.17 million in transactions, a slight rise from the $208.26 million recorded at last year's event. 

But despite the increase, the figure was less than projected. 

"The bad news is we missed the target of $220 million because global demand is declining," Trade Minister Mari Elka Pangestu said. 

"But the good news is we were still able to record growth." 

Mari said a slowdown in Indonesia's "traditional markets", such as the United States and members of the European Union, partly contributed to the shortfall. 

For example, the value of transactions with Spanish businesses sharply declined from $23.91 million in 2007 to $2.07 million. 

Orders from Australian businesses also were down dramatically, from $13.71 million to $2.24 million. 

Orders from Japanese businesses fell from $11.26 million last year to $6.49 million, while transactions from Taiwan dropped from $9.88 million to $5.2 million. 

Despite missing the target, the TEI did manage to attract buyers from new markets, Mari said. 

Orders from new players accounted for $148 million of the total, including orders from Egypt ($28.47 million), Bulgaria ($12.25 million), Saudi Arabia ($6.26 million), Sudan ($4.65 million), Nigeria ($4.33 million), Pakistan ($4.32 million), Ukraine ($4.28 million), South Africa ($3.16 million) and Brazil ($3.14 million). 

"We'll now focus on emerging markets, like China and India, as well as on new markets, such as Turkey, Egypt, Iraq, Iran, Uzbekistan, Ukraine, Kazakhtan and Russia," Mari said. 

Indonesia is also trying to benefit from an expected drop in China's share of the international market as it is "losing its competitiveness in the manufacturing sector with the strengthening of the yuan against the U.S. dollar".

Saudi proposes joint investment promotion initiative to RI

The Jakarta Post 

Antara, Jakarta | Thu, 06/26/2008 4:33 PM

A Saudi investor has proposed Indonesia and Saudi set up a joint promotion company to increase investment in both countries.

According to the chairman of the Global Unions Company of Saudi Arabia, Dr. Khalid S. Al Musa, the proposed body would promote investment projects.

He said the joint company would also serve as a consultant, and that Saudi Arabia was ready to conduct a feasibility study on its establishment.

Indonesia's exports to Middle Eastern markets are relatively small, Al Musa said, adding that bilateral relations in the business sector were increasing.

Saudi investment in Indonesia has reached US$28 billion.

Aceh expecting Saudi investment

Banda Aceh (ANTARA News) - Nanggroe Aceh Darussalam (NAD) is hoping that Saudi companies will invest their capital in the province in order to help develop its economy and solve the unemployment problem, NAD Deputy Governor Muhammad Nazar said here on Tuesday.

"Besides that, Saudi investors are also expected to help develop NAD`s education and other economic sectors," he said on the sidelines of the handing over of assistance from the Saudi Charity Campaign (SCC).

The ceremony which was held in the premises of Baiturrahman Grand Mosque, was attended by Saudi Arabian Home Affairs Minister, who is also SCC president, Saaid Al Urabi Al Haritsi, Saudi Ambassador to Indonesia Abdurrahman Muhammd Amin Al Khayyath and their party members.

The Saudi social institution provided assistance for the development of 1,500 units of houses who became victims of the deadly tsunami which hit Aceh province in December 2004.

The Saudi sides will lay the first corner stones for the development of 2,500 houses for the tsunami victims on Wednesday.

Other corner stones which will also be laid on Wednesday are those for the construction of the Medical Center of the Syiah Kuala University`s Medical School, which will be built at a cost of US$1,800,000.

Indonesia to open trading house for SMEs in Jedda early 2008

Jakarta (ANTARA News) - The Cooperatives and Small- and Medium-scale Enterprises (SMEs) Ministry in cooperation with businesspeople in Jedda, Saudi Arabia, is to open a trading house for food products and cosmetics produced by Indonesian SMEs in the Saudi city in early 2008, an official said.

"A building to accommodate the house has been set up and all relevant technical matters have been discussed, so our target now is to open the trading house in Jedda in early 2008," Deputy for Marketing and Business Networks to the State Minister for Cooperatives and SMEs Sri Ernawati said here Friday.

The trading house would be run in cooperation with Saudi businesspeople who already have experience in marketing Indonesian SMEs` products in Jedda. The cooperation would be conducted as a partnership for mutual benefit, she said.

Jedda was chosen as the location of the trading house as the city is a gateway to other Arab and African countries.

The trading house in Jedda was expected to be an effective solution to the export and marketing problems encountered by Indonesian SMEs, Ermawati said.

It was reported earlier that the Office of the State Minister for Cooperatives and SMEs has set up an agency providing marketing services to cooperatives and SMEs by acting as a mediator between Indonesian SMEs and foreign buyers.

"The agency is also intended to help SMEs meet export requirements as their capacity in this respect is usually low, while their capital strength and knowledge of export procedures are limited," she said.

The agency which has been operating since 2007 now had business partners in Bulgaria and set up a trading house in a city in that country.

"The agency has set up partnership relations with local companies that have networks and experience in marketing handicraft products from Indonesia," she said.

She said Bulgaria was chosen as the location of the trading house as the country served as a gateway to other European countries.

"In the future, the trading house pattern is expected to overcome export problems frequently faced by cooperatives and SMEs," she said.

Three RI companies to set up posphate acid factory in Morocco

Jakarta (ANTARA News) - Three Indonesian companies intend to invest US$500 million in the construction of a phosphate acid factory in Morocco under an investment cooperation agreement with the Middle Eastern country, Indonesia`s special envoy to the Middle East Alwi Shihab said.

Speaking to the press after a meeting with President Susilo Bambang Yudhoyono at the State Palace here Friday, Shihab identified the three companies as PT Petrokimis Gresik, Medco Energi Corporation and Bosowa Group.

A Memorandum of Understanding (MoU) on the three Indonesian firms` plan was expected to be signed in 2008, he said.

The investment would be made under a bilateral investment cooperation scheme whereby Indonesia would import semi-finished phosphate acid from Morocco and the latter would invest in the construction of an ammonia plant in Indonesia.

"It`s a better way to meet our need for phosphate acid than having to import the finished product while Morocco also needs ammonia," Alwi said.

Alwi who met the president to report the results of his work during the past few months and his work plans for the near future, said he was also exploring the possibility of forging the same kind of investment cooperation with Egypt.

In Saudi Arabia and Qatar there were many investment opportunities for Indonesian construction companies, he said.

Citing examples, Alwi said construction company Waskita Karya had been offered to invest in a project worth US$1.5 million in Saudi Arabia. The project would include development of a housing complex and apartments in University City.

Another Indonesian construction company, Adhi Karya, had won a contract to build apartment towers in Qatar, Alwi said.

Mideast investment in Indonesia meagre: ex-envoy

The Peninsula, 9/22/2007 0:17:28

Abdul Wahid Maktub

DOHA: Investment from the GCC and the rest of the Middle East in Indonesia, which is the world's most populous Muslim country, is quite low, rues a former Indonesian ambassador to Qatar.

Abdul Wahid Maktub, who left Doha early this year having served as Jakarta's envoy for a little more than three years, was here on a brief private visit.

He told this newspaper in a brief interview late last week: "There are misperceptions in the Middle East about the safety of investments back in our country. The misgivings need to be removed."

Having recovered from the financial crisis of the late 1990s, Indonesia is making rapid economic strides. The economic growth rate has been 6.5 per cent and expected to shortly climb to seven per cent.

Maktub, who is practising as a legal consultant in the Indonesian capital-Jakarta now, said that he was on a visit to the region to attract investments back home, especially in the booming real estate market. "I have been to Saudi Arabia and now I am here," he said.

One of the biggest achievements to his credit has been that Dubai's real estate giant, Emaar, has agreed to make an initial investment of $800m in a massive city project in Lombok island, which is close to Bali. "Emaar has recently set up an office in Jakarta," said Maktub.

Here, he said he met Sheikh Faisal bin Qassem Al Thani, Chairman of the Qatari Businessmen's Association, and urged him to pay a visit to Indonesia to explore avenues of investment. "He has accepted the invitation," said the former envoy.

"When I had met Emaar's chief, I had only requested him to visit Indonesia. When he visited Lombok, the first thing he did was pray and immediately after that he told me that he was going to develop a city on this virgin and breathtakingly beautiful island," said Maktub.

Saudi Arabia's Bin Laden Group, he said, has given sub-contract for a 60-storey building it is developing in Dubai, to an Indonesian construction company and is quite happy with its work.

A lot of western countries are investing in real estate projects in Indonesia, but a disappointing thing is that the investment inflow from the Gulf and the rest of the Middle East is nil or negligible. It is because businessmen here have misperceptions about the country. There is so much idle money here and a lot of business and investment opportunities in Indonesia.

"Ours is a huge country. It takes eight hours to fly from the easternmost point to the west. You can, thus, imagine how big the country is, and so are the possibilities of doing business and making investments," said Maktub.

"We are adopting a practical strategy. We want businessmen here to simply visit Indonesia and the rest would automatically follow."

Also with Maktub was Gunawa Witjaksono, one of the top real estate developers of Indonesia.

Madinah chamber of commerce interested joint with Indonesia

Sana`a (ANTARA News) - The Madinah Chamber of Commerce and Industry in Saudi Arabia, expressed interest in joint investment in projects both in Madinah and in several places in Indonesia.

``Therefore it would be necessary to introduce investment opportunities both in Madinah and in Indonesia with a view to establishing a partnership between the businessmen of the two countries,`` Chairman of the Madinah chamber, Saleh Al-Suhaimi, said here on Tuesday.

The Madinah chamber`s wish was conveyed in a meeting with an Kadin delegation led by Fachruddin Lamhuddin here on Monday. The Madihan chamber also wished for the participation of Indonesian businesspeople in building the Madinah-Mekkah railway track project.

The Indonesian chief delegate said that their visit to Madinah was part of Indonesia`s efforts to bolster trade relations with Saudi Arabia.

Saudi-Indonesia Panel to Discuss Cooperation

M. Ghazanfar Ali Khan, Arab News

RIYADH, 10 June 2007 — Saudi Arabia and Indonesia will hold the first meeting of their joint parliamentary panel here today. The Saudi-Indo Inter-parliamentary Friendship Committee, which was constituted recently by the Shoura Council and the Indonesian Parliament, will discuss how to promote cooperation in the fields of parliamentary and legislative affairs as well as boost links in political and commercial sectors.

According to Yubil Septian, a spokesman for the Indonesian Embassy, the meeting of the panel of parliamentarians will focus mainly on forging further ties between the Shoura and the Indonesian Parliament. The meeting is also important in view of the fact the Indonesian government is currently awaiting the visit of the Custodian of the Two Holy Mosques King Abdullah following an invitation extended earlier.

Referring to the parliamentarians’ meeting, the spokesman said that the meeting would be co-chaired by Jassem Al-Ansari, a Shoura member, and Ahmed Darodji, an Indonesian parliamentarian. Seventeen members of the Indonesian Parliament have already arrived to participate in the meeting while Speaker Agung Laksono will fly in today. The 17-member entourage does not include another group of 11 parliamentarians, who will join the delegation for bilateral talks.

He said that during their stay in the Kingdom the Indonesian delegation will hold talks with many senior Saudi officials including Minister of Economy and Planning Dr. Khaeld Al-Gosaibi and Minister of Islamic Affairs Sheikh Saleh ibn Abdulaziz Al-Sheikh.

Saudi Arabia and Indonesia have forged closer relations in different sectors. The two countries are working on a proposal to set up a joint refinery project in Indonesia, according to a recent report. Jakarta is preparing the project proposal for a new Saudi-Indonesian refinery, which will be submitted to Saudi Aramco soon.

The only Asian member of the Organization of Petroleum Exporting Countries, Indonesia has been a net importer of crude oil. Pertamina, a wholly state-owned enterprise with 14 subsidiaries including Pertamina Energy Trading, is working on the project from Indonesian side.

The Kingdom has also extended aid and loans to Indonesia. The total amount of assistance received by Indonesia from the Saudi Fund for Development (SFD) has exceeded $233.79 million since 1976. Since 1987, however, no project in Indonesia has been funded by the SFD.

The assistance made available by the Islamic Development Bank from 2003 to 2006 was about $288 million, mainly for educational projects, trade facilities, hospitals, customs capabilities and regional projects in Sumatra.

Indonesia Bakrie wins M'sian deal

The Brunei Times, 27-May-07

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

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

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

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

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