Julius Baer opens branch in Indonesia

Aditya Suharmoko, The Jakarta Post, Jakarta | Wed, 11/05/2008 10:31 AM  

Swiss-based top financial firm Julius Baer has opened a branch in Indonesia, PT Julius Baer Advisors Indonesia, despite the global financial crisis, as part of its strategy to expand in southeast Asia. 

Julius Baer's CEO for Asia, the Middle East and Eastern Europe, Thomas R. Meier, said Tuesday the Indonesian branch would enable the firm to identify new investment opportunities and give advice to clients from the region. 

"The establishment of a presence in Jakarta is an important element of our growth strategy, which continues to be supported by Julius Baer's sound capitalization and balance sheet," Meier said. 

"The opening demonstrates our commitment to the region and we expect to further leverage Julius Baer's existing global strengths to benefit all our clients," he added. 

Julius Baer opened its branch in Singapore, two years ago. It was named the fastest-growing financial institution in the country last year. 

The global financial crisis does not seem to be stopping large financial institutions from opening branches in Indonesia, Southeast Asia's largest economy. 

Last week, U.S. financial giant Morgan Stanley opened a branch here. 

Salina Nordin, president director of Julius Baer Advisors Indonesia, said the firm would benefit Indonesia, after securing a license from the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK). 

Julius Baer, a "pure-play" private bank without an investment banking arm, has managed to avoid the massive U.S. subprime mortgage crisis which has been hitting its rivals. 

Julius Baer was founded in 1980 by famous banker Julius Baer. The firm's services include asset management, wealth management, investment consultation and investment funds for both private and institutional investors and securities, as well as foreign exchange trading. 

With more than 4,200 employees worldwide, it was managing more than 360 billion Swiss francs (US$310.39 billion) by the end of June.

Australian firm wins Indonesia iron mining contract

Alfian, The Jakarta Post, Jakarta | Wed, 11/05/2008 10:33 AM  

Australian mining firm Indo Mines Limited has secured Indonesian government approval to mine iron ore deposits in Kulon Progo, Yogyakarta, with a total investment commitment of US$1.7 billion. 

The company's local subsidiary, PT Jogja Magasa Iron, inked a 30-year work contract with the government Tuesday to develop iron sand reserves in the 2,987 hectares area. 

"This is the first work contract in the mining sector since the 1998 crisis," Energy and Mineral Resources Ministry Purnomo Yusgiantoro said after the contract signing. 

Indo Mines owns a 70 percent stake in Jogja Magasa Iron, with Indonesian company PT Jogja Magasa Mining holding the remaining 30 percent. 

Under the contract, PT Jogja Magasa Iron has the right to mine iron sand and process it into pig iron. 

The mining area has about 273 million tons of iron sand reserves, equivalent to about 33.6 million tons of pig iron, PT Jogja Magasa Iron's president commissioner Lutfi Heyder said. 

Lutfi said the project would start operations after approval of the environmental impact assessment. 

"We expect to start mining in 2011 and begin producing pig iron in 2012." 

Jogja Magasa Iron aims to produce one million tons of pig iron per year, to be sold entirely to the domestic market. 

"We will sell the pig iron to the domestic market, because the domestic fob (free on board) price is not too different from that of the international market," Lutfi said, adding that the current price for pig iron is about $450 per ton. 

Jogja Magasa is now in talks with state steelmaker PT Krakatau Steel to supply the company with up to 100,000 tons of pig iron per year. 

Purnomo said the mining project was expected to contribute tax revenues of $20 million per year and royalties of $11.25 million per year. 

He said that, in the first ten year, the Jogja Magasa Iron would also give 1.5 percent of its gross profit for the development of the Kulon Progo region. The company contribution will increase to 2 percent after the first ten years. 

The government has targeted that investment in mining, excluding oil and gas, should reach $1.55 billion this year.

Biofuel from Seaweed for Korea and Indonesia

TheBioenergySite

INDONESIA - A joint project has been launched between the Korea Institute of Industrial Technology (KITECH)and the Indonesian Ministry of Fisheries and Marine Resources to make biodiesel from seaweed. 

KITECH already has the technology to process the seaweed and the Indonesian fisheries ministry says that its long coastline with warm climate ensures an abundant harvest of seaweed. 

The spokesman of the Indonesian fishery and marine resources, Soen`an Hadi Poernomo told ANTARA News: "Korea's need for energy is large but its supply of natural resources namely seaweed is small," he said. 

However, he added that Indonesia does not have the technology to process the seaweed into a fuel source and therefore needs a partner for mid-term and long-term benefit. 

He said the seaweed that would be exploited for the development of the biofuel was the Geladine variety currently being cultivated in Maluku, East Belitung and Lombok. 

He said the price of biodiesel is still quite high at around US$2 per litre but in the next three years following the exploitation of the seaweed the price was expected to fall to US$1 per litre. 

Soen`an did not tell when the project would be realized but at the end of this year the South Korean president would come to the country. 

"We hope the president of KITECH would also come here to further discuss the cooperation," he told ANTARA News. 

TheBioenergySite News Desk

PTBA planning to join Northstar consortium

Jakarta (ANTARA News) - Minister for State Enterprises Sofyan Djalil said state-owned coal mining firm PT Tambang Batubara Bukit Asam (PTBA) was planning to join Northstar Pacific consortium which would buy 35 stake in PT Bumi Resources (BUMI). 

"PTBA has told us its plan to join it. If there are others who will join it too, we would welcome them," the minister said here on Tuesday. 

Northstar is an investment company which is part of the Texas Pacific Group of the United States. It has won the purchase offer of 35 state in BUMI worth US$1.3 billion. Northstar defeated other contenders San Miguel of the Philippines and Tata Group of India. 

Besides PTBA, two other state-owned enterprises (SoE), namely PT Antam and PT Timah once expressed interest to purchase BUMI, failed to reach a deal due to low price. 

According to Djalil, the government is in principle encouraging SoEs to take part in the purchase of state with BUMI. 

"After the due diligence carried out on BUMI and it showed `clear and clear` and its price is promising then would not object to it," he said. 

He said that BUMI was a good company and the due diligence indicated a good result, so that there would be no problem if a SoE was interested in it. 

But the minister admitted he was not informed of the ability of the company to take part in the consortium, especially with regard to its fund and the portion of the shares it would buy. 

As reported Sunday, Northstar is teaming up with state companies for the buyout. 

"We are now evaluating what proportion we have in the consortium, but the deal the consortium and Bakrie & brothers has been completed, PTBA president director Sukrisno was quoted as saying. 

Bakri & Brothers, the flagship of the wealthy and politically wired Bakrie family announced over the weekend that Northstar Pacific had agreed to pay US$1.3 billion for the Bakrie`s 35 percent stake in publicly listed BUMI, the world`s largest thermal coal exporter, to help its debts.

Tata Steel studying plan to invest US$1 bln in Indonesia

Jakarta (ANTARA News/Asia Pulse) - Indian steel giant Tata Steel Ltd (BSE:500470) looks set to go ahead with plan to build upstream steel plant in Indonesia's South Kalimantan with an investment estimated to reach US$1 billion, an official said. 

Tata continues to study possible investment in a factory with an annual production capacity of 1 million tons of upstream steel materials in that province, Metal, Textile Machine and Multifarious Industries Director General Ansari Bukhari said. 

Bukhari said Tata leaders are scheduled to meet the South Kalimantan governor and leaders of district areas as well as holders of iron ore mining license in that province.

Regions told tender early, help growth

The Jakarta Post, Jakarta |  Tue, 11/04/2008 10:36 AM  

The government urged local administrations Monday to start by the end of this year the tender processes for procurement for projects allocated in the 2009 regional budgets, to help bolster national economic growth, despite the global financial crisis. 

"The government's spending is needed to keep growth at above the 6 percent level," said State Minister of National Development Planning Paskah Suzetta, Monday, during a meeting with leaders from provinces, including governors, spokespersons of local councils and regional treasurers. 

"Although the budget will be effective from January (next year), we can prepare all tender requirements from now on," he added. 

The global economic downturn, triggered by the sub-prime mortgage crisis in the United States, is drying up market liquidity and weakening the national economy. Early government expenditure (on projects) can be expected to help keep the economy running. 

However, director general of financial balance at the Finance Ministry, Mardiasmo reminded local authorities to complete all the requirements needed to get their annual budget support from the central government. 

"For example, this year's budget support will expire if regions don't submit their progress reports on local projects," he said. 

Only 53.94 percent of the Rp 21.20 trillion (US$1.9 billion) special allocation funds (DAK) for this year, a special budget allocated by central government to support regions in developing their infrastructure projects, had been distributed by October due to late reports on previous projects. 

Mardiasmo said that local governments failed to submit project progress reports because they had been late in opening the previous project tenders. 

For next year, central government has agreed to allocate Rp 24.8 trillion of DAK and Rp 186.4 trillion of general allocation funds (DAU), another annual budget allocated for regions. 

The Central Statistics Agency (BPS) chairman, Rusman Heriawan, another speaker in the meeting, agreed that local administrations had to spend their annual budgets more efficiently and effectively. 

"Local administrations tend to spend most of their budget near the end of the year. They should instead spend their budget continuously (during the year) like 10 percent every month," he said. (hwa)

Govt may reduce fuel prices by up to Rp 800 a liter

The Jakarta Post | Tue, 11/04/2008 1:45 PM  

Energy and Mineral Resources Ministry has proposed the price of subsidized fuels to be reduced by around Rp 500 to Rp 800 per liter following a decline in crude oil prices, an official said. 

Subsidized Premium fuel currently retails at Rp 6,000 per liter while diesel retails at Rp 5,500 per liter. 

Director General for Oil and Gas Evita Legowo said the new pricing likely to be finalized soon and that it could be implemented as soon as Novembers. However, she said, reducing fuels prices would mean an increase in the total budget allocation of fuel subsidies for this year by another Rp 3 trillion to Rp 129 trillion. 

Evita said as of October this year, the government had spent Rp 130 trillion. 

“Should we implement the price cut, we need another Rp 3 trillion until the end of December,” she said. (and)

Bio-fuel Producers Must Channel Products to Local Demands

Monday, 03 November, 2008 | 20:32 WIB 

TEMPO Interactive, Bekasi: The government will require bio-fuel producers to supply products for local demands through the domestic market obligation regulation. “For the time being, we will require them to supply around 50 percent of the total national demands,” explained Energy and Mineral Resources minister, Purnomo Yusgiantoro, during his visit to PT Darmex Biofuel in Bekasi last Friday. 

Purnomo hopes that with the new regulation, the bio-fuel industry will become more attractive for investment, because his department had also issued mandatory regulations on using bio-fuel. Income tax incentives are also regulated in the Law no.62/2008 on Income Tax Facilities for Certain Investments. “This can be regarded as a pioneering industry,” Purnomo said. 

AGOENG WIJAYA

Medco may postpone 6 mega-projects

The Jakarta Post,   Jakarta   |  Mon, 11/03/2008 9:08 PM 

Indonesia's largest publicly-traded oil company, PT Medco Energi Internasional Tbk., may postpone its plans to construct six energy projects worth US$3 billion (Rp 30 trillion) due to the global economic recession.

The company's chief commissioner, Hilmi Panigoro, said here on Monday that banks should provide 70 percent of the funds needed for the projects, while the remaining 30 percent would be taken from the company's internally generated funds.

"Because of the crisis, banks have tightened their liquidity. Thus, we will possibly reschedule the big projects," Hilmi said, as quoted by Antara news agency.

Although the banks' liquidity was in fact still sufficient, Hilmi said the company was considering postponing the projects because of the possible high bank interest rates resulting from the crisis.

Hilmi said the company had yet to officially review the projects, and that it would keep working on the Senoro Liquefied Natural Gas (LNG) plan that is being financed by the Japan Bank Indonesia's largest publicly-traded oil company, PT Medco Energi Internasional Tbk., may postpone its plans to construct six energy projects worth US$3 billion (Rp 30 trillion) due to the global economic recession.

The company's chief commissioner, Hilmi Panigoro, said here on Monday that banks should provide 70 percent of the funds needed for the projects, while the remaining 30 percent would be taken from the company's internally generated funds.

"Because of the crisis, banks have tightened their liquidity. Thus, we will possibly reschedule the big projects," Hilmi said, as quoted by Antara news agency.

Although the banks' liquidity was in fact still sufficient, Hilmi said the company was considering postponing the projects because of the possible high bank interest rates resulting from the crisis.

Hilmi said the company had yet to officially review the projects, and that it would keep working on the Senoro Liquefied Natural Gas (LNG) plan that is being financed by the Japan Bank for International Cooperation. (ewd)

RI, China to sign cooperation agreement on aquatic products

Beijing, (ANTARA News) - Indonesia and China are scheduled to sign a fishery cooperation agreement next week in a move to reduce the rejection of each other's aquatic imports, a spokesman said. 

A team of officials from the Indonesian Ministry of Maritime Affairs and Fisheries is expected to arrive at the Chinese capital next week to meet with officials of the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) for the purpose, First Secretary for Economic Affairs of the Indonesian Embassy in Beijing Iwan Freddy Hari Susanto said on Sunday. 

The two nations have long tried to sign the cooperation agreement but to no avail because of technical matters. 

"This time the text of the cooperation agreement has been completed and ready to be signed. We hope the authorized parties from the two countries will sign it soon," Freddy said. 

He said relevant officials of the two countries have already exchanged visits. 

Citing an example, he said AQSIQ officials visited Indonesia some time ago to see if the country has complied with the Chinese-set standards in processing aquatic products. 

The cooperation agreement does not mean that all types of aquatic products from Indonesia can enter the Chinese market, he said. 

"Likewise not all types of aquatic products from China can enter the Indonesian market. After all, the positive step will at least encourage and enable the two countries to accept each other's aquatic export products," he said. 

On February 4, 2008, China lifted its temporary ban on the import of aquatic products from Indonesia after AQSIS assured that Indonesia complied with the standards in processing its aquatic products. 

China imposed a temporary ban on the import of aquatic products from Indonesia after AQSIQ on August 3, 2007 found that a number of Indonesian aquatic products fell short of standards. 

 

Thousands take part in tsunami drill in Aceh

Hotli Simanjuntak, The Jakarta Post, Banda Aceh    

Panic spread among the hundreds of people along Ule Lhuee beach Sunday, as the tranquil morning was shattered by a loud boom, followed by a magnitude-8 earthquake. 

The panic grew as the tsunami siren wailed from the nearby facility in Blang Oi, Meuraxa Ule Lhuee district, warning that the quake could potentially cause a tsunami. 

People wasted no time in leaving the beach, running in a chaotic crowd to the nearest evacuation facilities in Lambung, Deah Geulumpang and Alue Deah Tengoh villages and the Tsunami and Disaster Mitigation Research Center (TDMRC) building in Gammpong Pie. 

There was, of course, no tsunami that day: The excitement was part of a tsunami drill program jointly conducted by the Banda Aceh municipal administration and the Indonesian Institute of Sciences (LIPI). 

Thousands of people from various villages were involved in the drill, many of whom could not stop from crying in real panic. 

"I'm still traumatized by the 2004 tsunami," one resident, Aisyah, said as she fled. "I just don't want it to happen again." 

The vice regent of Banda Aceh and chairman of the disaster preparedness drill committee, Illiza Saadudin, said the drills were important for all those living in earthquake-prone regions. 

"Through the drill we learn what we should do when disasters such as earthquakes and tsunamis hit," Illiza said. 

Pariatmono, a member of the 2008 National Tsunami Drill Team, said many lessons could be learned from the drill, including identifying weaknesses in the disaster handling system. 

"The drill has shown us many things we have to fix in the future, but they are all still within the tolerable limits," Pariatmono said. 

He praised the municipal administration's initiative in conducing the drill, which, he said, was a "breakthrough". 

One example of this was the vertical evacuation conducted during the drill, which he said had never before been done in Indonesia when evacuating disaster victims. 

"The initiative should serve as a model for other regions, especially those that are prone to tsunamis," Pariatmono said. 

The Indonesian government has been conducting disaster-handling simulations in various regions across the country. Other coastal regions holding a tsunami drill this year include Padang and Bengkulu. 

Pariatmono said the evaluation of the tsunami drill conducted in Banda Aceh on Sunday would be used as a reference for tsunami handling for other countries whose territory lies on the Indian Ocean. 

"On December 26, 2009, these countries will simultaneously conduct tsunami drills with Indonesia as the leader," Pariatmono said. 

He added the event would also be held in memory of the 2004 tsunami.

The 'Post' wins award for best business reporting

Mon, 11/03/2008 10:26 AM  |  Business 

The Jakarta Post daily newspaper has won an award from The University of Indonesia's School of Economics for the quality of its business reporting and news impact. 

The award was presented by the school's dean Bambang Brodjonegoro to the Post's managing editor Riyadi Suparno in a ceremony at the university's main campus in Depok on Saturday. 

"The Jakarta Post has been chosen for its quality and its high news impact. The stories are concise, exact and explicatory," said one of the judges, Mirza Adityaswara of Credit Suisse, who is also a faculty alumnus. 

Besides the Post, other media outlets awarded for best business reporting include Tempo in the general magazine category, Neraca in the business newspaper category and Investor in the business magazine category. 

The faculty also awarded its alumni for outstanding achievements. The most prestigious award, the Wirakarya Adhitama, was awarded to Widjojo Nitisastro for a lifetime of dedication and extraordinary achievements. 

During the birth of the New Order in the sixties, Widjojo was one of a group of young economists, later dubbed the Berkely Mafia, assigned by then president Soeharto to come up with economic policy recommendations. 

The faculty also awarded its alumni, Sri Mulyani Indrawati, for her achievements as an economic policy maker. Mulyani currently chairs as both acting coordinating minister for the economy and finance minister. 

Recently, Mulyani won the Bung Hatta Anti-Corruption Award for her efforts in laying the ground work for bureaucratic reform within the Finance Ministry, especially in the tax and customs offices. 

The award for the alumni with extraordinary achievement as a businessman was given to Sofyan Wanandi. Sofyan currently manages his business conglomeration, the Gemala Group, and also chairs the Indonesian Employers Association. 

Other faculty alumni that received awards were Arwin Rasyid of Bank CIMB Niaga for the economic professional category, Dhoho Ali Sastro for his social activism and Andrea Hirata for his contribution in arts and culture. Andrea is the author of Laskar Pelangi, a novel recently adapted into a block buster movie with the same title. -- JP

Bayan signs $300m mining deal with Petrosea

Alfian, The Jakarta Post, Jakarta   

PT Bayan Resources, the country's eighth largest coal producer, has signed a US$300 million mining contract with construction firm PT Petrosea. 

PT. Gunungbayan Pratamacoal (GBP), a subsidiary of Bayan, signed a 5-year contract with Petrosea for overburden removal, Bayan director Jenny Quantero said in a statement over the weekend. 

Overburden is the term used in mining to describe the rock and soil that lies above the coal seam. 

Petrosea has been operating at GBP from November 1999 under two contracts, the last of which is due to expire at the end of December 2008. 

The new deal, which will commence on Jan. 1, 2009, sets the overburden production targets of 36 million bank cubic meters (BCM) per annum. 

"We believe that our strong relationship and support from Petrosea will positively contribute to our activities and secure future production from one of our main mines," Bayan's president director Eddie Chin said. 

GBP is a coal mining company that has a second generation coal contract of work (CCOW) to mine in Muara Pahu, East Kalimantan. It is split into two separate blocks with a total concession area of 24,066 hectares. 

Bayan was the eighth largest coal producer in Indonesia in terms of production volume in 2007. Through its eight subsidiaries, it owns the rights to mine coal on a total area of 81,265 hectares in East and South Kalimantan. 

Bayan produces wide coal with a variety of caloric values. It expects to increase its coal production to 9 million tons this year from 4.7 million tons last year. 

Bayan's 2008 projected sales volume is 9.9 millions tons, up from 7.1 million tons last year. 

The company estimates a doubling of revenue to $700 million this year, from $376 million last year. Net profit is expected to reach $100 million this year, more than triple last year's of $27.5 million.

Citra Marga to build $195m turnpike in the Philippines

Ika Krismantari, The Jakarta Post, Jakarta 

Citra Marga Nusaphala Persada (CMNP), a publicly listed toll operator, plans to build a turnpike in the Philippines with a total investment of US$195 million. 

Director of operations Hudaya Arryanto said over the weekend the project would start early next year and was scheduled to be completed in 2010. 

The project, known as Metro Manila Skyway, is the company's second project in the Philippines. CMNP will build a toll road connecting Bicutan to Alabang with a total length of 6.8 kilometer. 

The first one involves the construction of a 13.5-kilometer toll road connecting Buendia and Bicutan regions. The company has a 21 percent stake in the two projects. 

"We are in talks with a number of local banks in the Philippines to provide loans for the project," Hudaya said, without naming the banks. 

Aside from the projects in the Philippines, the company also has projects in Malaysia. 

On the domestic front, the company's ongoing projects include Cawang-Tanjung Priok turnpike (North South Link) -- a section of Tanjung Priok Port-Jembatan Tiga (Harbor Road) and Surabaya Eastern Ring Road tollway. 

It plans to start the construction of a Depok-Antasari turnpike with a total length of 22.8 kilometers by the end of this year. 

With its domestic and overseas projects, the company expects a net profit of Rp 120 billion ($11.4 million) this year, having recorded Rp 92 billion in net profit in the first nine months of the year. 

Formerly controlled by the eldest daughter of former president Suharto, Siti Hardiyanti Rukmana, CMNP is now 58.3 percent owned by the public. 

State toll road operator and builder PT Jasa Marga also owns about 17.8 percent stake in the company.

Harvey Nichols opens amid economy slowdown

Prodita Sabarini, The Jakarta Post, Jakarta 

The global financial crisis has affected the fashion industry, prompting one of the British high-end fashion retailers Harvey Nichols to set modest targets for its newly opened store in Jakarta. 

The British luxury fashion retailer opened late October its 12th store in Jakarta amidst a weakening economy due to the global financial crisis. 

Harvey Nichols Group CEO Joseph Wan said Thursday that he was very happy with the opening of the store but would not expect the store to immediately reach its maximum potential due to the recent economic slowdown. 

"Because of this recession - which is just starting - no question, I would not expect the store to achieve its maximum potential immediately or very quickly. First of all, we have to sail through this storm. So it's a question of realistic expectations," he said here in Jakarta. 

"This time around I also believe that even the wealthy are equally affected (by the financial crisis) or maybe even worse so." 

The opening of Harvey Nichols Jakarta, located in a 9,500 square meter site in the posh Grand Indonesia shopping mall, in Central Jakarta, was planned three years ago. 

"At that time nobody knew that it (financial crisis) was going to happen. Yes, now, we can see the financial crisis and how events unfolded." 

"But the point is however big, however painful, this is just an economic cycle. Businesses with the relevant systems, with a good balance sheet, they of course can ride the storm by putting measures on cost controls, inventory management and that kind of things. Then obviously they can sail through, and become stronger when the economy recovers," he said. 

Wan said that Jakarta was chosen over Kuala Lumpur and Singapore due to having the most potential buyers."In terms of the number of wealthy households already here, our information says that Indonesia has the highest. Because, even three years ago, we were told official statistics indicated there were at least 3,500 wealthy households in this country, each one worth at least US$100 million. And also we were told, 70 percent of those 3,500 households, actually live in Jakarta," he said. 

Meanwhile, Indonesian government data released last month revealed there are 63,000 bank accounts across the country containing more than $200,000 and a further 90,000 with more than $100,000. 

The Jakarta Harvey Nichols store was designed by Dough Shaw and Andy Thaemert from Callison. For the store they combined modern brit op-art with subtle touches of local culture, with references to designs based on the parang batik pattern. 

Shaw said that they designed each of the three floors with a unique environment taking up an idea or art format for each of them. The lower ground was designed like an art studio, the ground level is based more on an art gallery, and the upper ground floor resembles more a collector's residence. 

The store holds hundreds of international brands, consisting of men's and women's wear, cosmetics, footwear and accessories. Among the fashion brands are Michael Kors, Stella McCartney, Armani and Givenchy. 

Wan said that the advantage of Harvey Nichols was that the collections on the racks were heavily edited by their team of experienced fashion buyers. 

"We have a team of very experienced professional fashion buyers. They go around the world cherry picking every season for the best of the best, for this climate as well," he said. 

Harvey Nichols also has a personal shopping department - where a customer can wait at a designated lounge while shop assistants search for the stuff the customer needs to buy. 

"...other department stores might not have (that kind of service)," he said.

RI, Japan turn to bilateral ties amid global crisis

Mustaqim Adamrah and Desy Nurhayati, The Jakarta Post, Jakarta    

Indonesia and Japan are enhancing their bilateral ties with a nine-day Indonesia-Japan Expo held in Jakarta to mark 50 years of bilateral partnership. 

In a speech delivered at the opening ceremony Saturday, President Susilo Bambang Yudhoyono said the two countries' close relationship could be an answer to challenges resulting from global economic turmoil.

 A TOUCH OF TOKYO: Three women clad in the traditional Japanese kimono chat while walking near the venue of Celebrating the 50th Anniversary of Indonesia-Japan Friendship at Kemayoran, Central Jakarta, on Saturday. (JP/P.J. Leo)

"Our bilateral relationship has been getting stronger since its establishment in 1958," he said. 

"This is an asset to us in dealing with global challenges resulting from the energy crisis, food crisis and climate change crisis, among others." 

Among those attending the ceremony were Trade Minister Mari Elka Pangestu, Transportation Minister Jusman Syafii Djamal, Energy and Mineral Resources Minister Purnomo Yusgiantoro, and Culture and Tourism Minister Jero Wacik. 

Former Japanese prime minister Yasuo Fukuda, who is also the Indonesia-Japan Friendship Association chairman, attended the ceremony. 

Bachrul Chairi, head of the Trade Ministry's National Export Promotion Agency (BPEN), which is participating at the expo, said the government would not set any transaction targets at the expo. 

"We only want to show the people how vast the Indonesia-Japan relationship that has been going on for 50 years is," he told The Jakarta Post. 

"With many huge Japanese firms operating here and the high value of Indonesia's exports in Japan, it is affirmed that the two countries depend on each other." 

He said Indonesia imported semifinished products, such as steel for auto components, from Japan, while Japan imported oil, gas, iron ores, nickel, tin, coffee, tuna and shrimp from Indonesia. 

According to the Central Statistics Agency (BPS), two-way trade reached US$30.16 billion in 2007, with Indonesia's non-oil-and-gas exports to Japan standing at $13.09 billion. 

The BPS recorded $18.68 billion in bilateral trade in the first eight months of this year, a 28.5 percent increase from the same period last year. 

Citing the bilateral relationship, Indonesian Chamber of Commerce and Industry chairman M. S. Hidayat said the economic ties had improved, as evident with the August signing of the Indonesia-Japan Economic Partnership Agreement (EPA). 

"Japan has proven its commitment through JBIC (Japan Bank for International Cooperation), which has been financing numerous Japanese projects in Indonesia," he told the Post. 

A Japanese government organization, Japan External Trade Organization (JETRO), also helped Indonesian small and medium enterprises (SMEs) develop their businesses, he said. 

"What the Indonesian government needs to do now is lobby the Japanese government so our SMEs can penetrate the Japanese high-end market equipped with tough requirements."

Bakrie signs deal to sell stake in Bumi

The Jakarta Post |  Sat, 11/01/2008 5:31 PM  

PT Bakrie & Brothers (B&B) has made an agreement to relinquish its ownership in the firm’s most prized company, Bumi Resources, to a global equity fund manager Northstar Pacific. 

B&B director Ary Hudaya told The Jakarta Post Sunday that an agreement for the acquisition of 35 percent stake in Bumi for US$1.357 billion was signed with Northstar on Saturday night. 

Ary said the corporate action was made to settle all outstanding debt ahead of schedule as a proactive response to the irrational market conditions triggered by U.S. sub-prime crises, which led to the Indonesian Stock Market turmoil following a global liquidity squeeze. 

Bakrie needs to sell its assets to accelerate debt payments of $1.2 billion after shares of Bumi and other Bakrie firms, pledged as collateral for $1.43 billion in loans, plummeted during the stock market havoc earlier this month. 

Ary said the company was not aiming to buyback its shares. “There will be no buybacks … We don’t’ want to speculate further. We wanted to settle the debt as soon as possible,” he said. 

When asked how the acquisition would affect the suspension of trading of Bumi’s shares in the stock market, Ary said that it was up to the capital market regulator. 

“We have sent a letter to the regulator yesterday … We will hold a public expose after the deal is fully completed,” he said. (and)

Related Article:

Bakries to sell bread and butter to TPG

Prince Charles to visit Jambi forest

Adianto P. Simamora, The Jakarta Post, Jakarta

The Prince of Wales plans to visit Jambi forest in early November to oversee a project aimed at restoring the forest's ecosystem and saving endangered species, the Indonesian Forestry Ministry says.

"Minister MS Kaban is expected to join Prince Charles' trip," the ministry's director of forest management Listya Kusumawardhani told reporters in Jakarta on Monday.

The Prince of Wales arrives in Halim Perdanakusumah Airport, East Jakarta, by Royal Air Force plane, Saturday. The prince is on a six-day visit to Indonesia to promote understanding on interfaith matters and to give a presidential lecture on forestry issues. (JP/Ricky Yudhistira)

The British Embassy in Jakarta said earlier Prince Charles would visit Indonesia from Nov. 1 to Nov. 5. The last time the heir to the English throne visited the country was in 1989.

The Harapan Rainforest project, dubbed BirdLife -- developed by a consortium of Burung Indonesia, International Bird Life and the London-based Royal Society for the Protection of Birds -- operates on a 50,000-hectare forest plot. The project is part of the Prince's Rainforests Project.

The project, located about 100 kilometers from the city of Jambi, is home to about 260 species of forest-dwelling birds.

Listya said the project would be an experiment in protecting a forest ecosystem and combating climate change.

The government granted the consortium permission in April to manage the wildlife-rich lowland rainforest area in Sumatra for 100 years.

Under the license, she said, the project workers must prevent the land from being developed.

The consortium of BirdLife is currently undertaking a forest restoration project on a 52,000-hectare plot of forest in South Sumatra.

"We haven't received information on whether Prince Charles will also visit the BirdLife forest project in South Sumatra," Listya said.

The consortium aims to restore the forest's ecological balance and to protect hornbills and other forest-dwelling birds by preventing the destruction of their natural habitat and to provide a foundation for the depleted population of Sumatran tigers to stabilize, BirdLife's web site says.

It says the consortium has set up camps on the ground and hired about 60 staff to patrol the area.

Indonesia has the third-largest rainforest area in the world, with 120 million hectares.

Listya said her office had received dozens of proposals to host forest restoration projects in Indonesia.

"Demand has been booming because of global intensive talks on combating climate change through forest projects," she said.

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(Marco Lambertini, BirdLife's)

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".

SBY meets former Japanese PM at trade expo

The Jakarta Post, Jakarta |  Sat, 11/01/2008 10:19 AM  

President Susilo Bambang Yudhoyono meets former Japanese prime minister Yasuo Fukuda at the opening day of the Indonesia-Japan Expo at the Jakarta International Expo Saturday morning. 

Fukuda, who served as Japanese Prime Minister from 2007 to 2008, is on a three-day visit to the country. 

The Indonesia - Japan Expo, jointly sponsored by the two countries' leading newspapers Kompas and Nikkei, is held in commemorating the 50th year anniversary of bilateral ties. 

According to Kompas.com, appart from an exhibition of various goods ranging from heavy machinery, soybean cakes to traditional batik wear, the Indonesia - Japan Expo will also be hosting a symposium and a range of other arts and cultural events. 

"Trade expo is the main course of the event, but there will also be cultural and musical performances," Kompas Gramedia spokesman Nugroho Yudho said. 

The expo will run from Nov. 1 to 9.

Exxon, Inpex to invest $144.5m in new blocks

Alfian, The Jakarta Post, Jakarta   

Exxon Mobil Corp, the world's biggest oil company, and Inpex Corp, Japan's biggest explorer, on Friday won new oil and gas exploration rights in Indonesia and pledged a total investment of at least US$ 144.5 million over the next three years. 

Exxon, through its subsidiary Esso Exploration Int. Ltd, won the rights to explore the Gunting block in East Java. For the first three years of exploration, it is committed to invest $17 million. 

Inpex won exploration rights in the Semai II block off West Papua. It will carry out exploration with two partners, Consortia Murphy Overseas Ventures Inc and PTT EP. They will invest $127.5 million in the first three years. 

The two companies were among the winners of 9 new oil and gas blocks announced by the Energy and Mineral Resources Ministry on Friday. 

The government expects to draw in total investment of $465 million from the 9 blocks, including signing bonuses of $69.5 million, said Evita H. Legowo, the ministry's director general for oil and gas. 

Indonesia's oil and gas industry adopts a production sharing contract (PSC) scheme, under which the government and operating firms share the output of the block. The government's share from the projected output from these 9 blocks is between 65 and 85 percent for oil and between 60 and 70 percent for natural gas. 

The announcement for these blocks was due to be made two weeks ago. Evita cited tough competition between applicants as the reason for the delay. 

"We had difficulties selecting the winners. We needed more time to contact several authorities to help in the selection process," she said. 

The most contested block was the Semai V block in West Papua. Six oil firms, including French oil giant Total E&P Indonesia, state oil and gas company PT Pertamina, and Hess Corp, the fifth biggest U.S. oil producer, applied for exploration rights in this block. 

Hess eventually won and pledged to invest US$143 million to back three years' exploration in the block. 

The government initially offered 21 blocks in the 2007-2008 regular tender. But only 9 blocks attracted investors. 

Two weeks ago, the winners of 22 new oil and gas blocks were announced. The total three-year investment commitment from these blocks is $375.5 million.

Bioethanol RI's golden ticket: Panigoro

Yuli Tri Suwarni, The Jakarta Post, Bandung 

Prominent businessman and founder of gas and oil company Medco Group, Arifin Panigoro (photo, right), said biofuel was a future alternative energy that could help Indonesia survive the energy crisis. 

"Indonesia cannot be wasteful anymore in using fuel as currently we only have a limited amount of fuel," Arifin said in a public lecture at the Bandung Institute of Technology (ITB) on Friday. 

Arifin said there were 47 million hectares of semi-uncultivated land and 77 million hectares of uncultivated land in Indonesia that could be used for developing bioethanol, an alternative to fossil fuels. The raw materials for bioethanol can also be used for food. 

He said the Medco Foundation had initiated planting sugar cane, corn, soybean and sorghum on 20 hectares of neglected land in Papua during the past two years. 

Arifin called on the government to immediately make a clear regulation on alternative energy, especially bioethanol, in preparation for the boom in land use for this purpose during the next three years. 

"The government has to manage the allocation of food crops that will be converted to energy so it will not disturb food resilience," Arifin said. 

He also called on the government to seriously think about farming zone management, including preparing the infrastructure to support the future business, such as establishing distribution pipes and constructing airports and harbors. 

Arifin, an ITB graduate, said he expected the business would create many jobs.

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EU calls for RI to send more students

Erwida Maulia, The Jakarta Post, Jakarta  

The European Union plans to encourage more Indonesian students to study in its countries, citing the plenitude of scholarships on offer. 

French Ambassador to Indonesia Philippe Zeller said in Jakarta on Friday that 1,500 Indonesians were studying in schools in seven EU countries, well short of the number studying in Australia. 

"Every year, France hosts about 150 Indonesian students, whereas at the same moment there are about 12,000 or 13,000 Indonesian students studying in Australia," Zeller said during a press conference on the EU-sponsored Asia-Link Symposium and Education Fair. 

"I think this gap signifies that we really have to improve not only the mobility of students, but also create the spirit and framework of cooperation between Indonesia and Europe," he added. 

The education fair will take place over the weekend at Balai Kartini, South Jakarta, from 9:30 a.m. to 6 p.m., and will feature up to 90 higher education institutions from the EU. 

Ambassador and delegation head of the European Commission to Indonesia Julian Wilson said each of the 27 EU countries ran their own scholarship programs, in addition to the Erasmus Mundus scholarship offered annually by the European Commission. 

The existence of such scholarships, however, has been poorly advertised, prompting the EU to kick off the two-day fair. 

"We think Indonesian students aren't aware of the existing opportunities. Maybe there's a lot more than you realize; Come down and take a look at the affair," Wilson said. 

Dirk Meganck, director of Asia and Central Asia at the European Commission's EuropeAid Cooperation Office, said this year the EU provided 150 million euros (US$191 million) to fund its higher education cooperation programs with Asian countries, including Indonesia. 

Zeller said the EU expected to see the number of Indonesians studying in Europe double or even triple in the next few years. 

Indonesia's National Education Ministry director general for higher education Fasli Jalal responded to the EU's intention by inviting both European lecturers and students to visit Indonesian universities. 

"As this is a two-way partnership, we're inviting European lecturers to come and be part of our education system on the basis of an exchange of experts," he said. 

"We're also offering European students the chance to spend some time in Indonesian universities to study art, special interests, culture or even science." 

Zeller said European students might be interested in studying climate change, biodiversity and forestry in Indonesia, which are "very interesting fields."

RI pushes for CCS tech to cut carbon emissions

Adianto P. Simamora, The Jakarta Post, Jakarta  

Fossil-fuel-addicted Indonesia is considering implementing carbon capture and storage (CCS) technology to cut emissions, prevent climate change and win money from rich nations under a global emissions pact. 

Energy and Mineral Resources Minister Purnomo Yusgiantoro and State Minister for the Environment Rachmat Witoelar said Thursday that CCS technology was the most practical method for containing large quantities of carbon emissions. 

"But it needs extra work to make it feasible," Purnomo told participants of a two-day workshop on CCS attended by dozens of players of the country's energy and oil and gas sectors. 

Purnomo said pilot projects were required to assess whether CCS was technologically and economically feasible. 

"International cooperation is required to resolve technical, financial and policy issues to ensure that CCS can be implemented," he said. 

CCS is a mechanism whereby carbon dioxide (CO2) emitted from industrial and energy-related plants is injected into geological formations instead of released into the atmosphere. 

Fossil fuel burning is the second-largest producer of CO2 in the country after forest fires, the government has said. 

There are currently about 70 oil and gas companies operating in the country. 

President Susilo Bambang Yudhoyono in 2006 issued a presidential decree mandating an increase in the percentage of renewable energy usage to 17 percent by 2025. 

It is estimated that CCS could cut energy sector emissions by 40 percent. 

Negotiators from 190 countries are scheduled to meet in the Polish city of Poznan in December to discuss moves to cut greenhouse gas emissions. 

It is expected the climate change conference will agree to include CCS as a flexible mechanism under the clean development mechanism (CDM). 

The CDM encourages non-obligated countries, such as Indonesia, to host emissions cutting projects. Rich countries would then provide financial assistance to the country on a tons of emissions cut basis. 

Experts have estimated that CDM project developers would pay Indonesia US$10 for every ton of CO2 it captured using CCS. 

"Therefore, we need a predictable price per carbon (captured) if we are to implement CCS. It is a carbon business," said Hardiv Situmeang, chairman of the Indonesian National Committee for the World Energy Council. 

He said CCS technology would be beneficial in Norway, as the government charged a tax of $50 per ton of carbon dioxide released. 

The State Minister for Environment estimated that rising fuel consumption could see emissions from the energy sector skyrocket to 2,878 million tons in 2050 from the 977 million tons forecast for 2008. 

Chief researcher at the Research and Development Center for Oil and Gas Technology (Lemigas) Hadi Purnomo said CCS technology could pump remaining oil in old wells in Indonesia to the surface, increasing the country's oil production by 60 percent. 

The country's oil reserves stand at an estimated 61.1 billion barrels. 

A recent study by Lemigas shows that East Kalimantan and South Sumatra could be selected as potential candidates for CCS projects since many depleted oil and gas reservoirs are located near CO2 emitting sources, including an LNG plant in Bontang. 

Natuna Island is another potential site for CCS, Hadi said.