Indonesian steelmaker set to launch IPO

Jakarta (ANTARA News/Asia Pulse) - Privatization of the state-owned steel maker PT Krakatau Steel (KS) scheduled later this year will be through initial public offering (IPO) rather than strategic sales, an official said.

Sales of 30% worth around Rp1 trillion (US$111 million) of the country's largest steel maker were originally scheduled for last year, but poor financial performance in 2006 resulted in the postponement of the plan.

The State Minister for State Enterprises, Sofyan Djalil, however, said that implementation of the IPO plan would depend on market conditions.

Semen Padang to build new plant

Jakarta (ANTARA News/Asia Pulse) - Cement maker PT Semen Padang in West Sumatra has said it plans to build a new factory with a capacity of 2.5 million tons a year with an investment of Rp3.3 trillion (US$366 million).

The new production unit will increase the annual production capacity of the company from 5.8 million tons at present to Rp8.3 million tons, when it is completed in 2011.

Last year, the subsidiary of state-owned PT Semen Gresik produced 5.4 million tons of cement from its four existing units.

Waste-based power plant project to go ahead despite protest

Yuli Tri Suwarni, The Jakarta Post, Bandung | Sat, 03/29/2008 11:12 AM

The Bandung municipal administration will go ahead with its plan to build a waste-based power generation plant despite strong opposition by local residents and the absence of an environment impact analysis.

A soft launch for the construction of the plant was held Monday in conjunction with the commemoration of the 62nd Bandung Lautan Api Day in Bandung.

Ignoring the protest and the unavailability of analysis from the Bandung office of the environmental management agency, Bandung Mayor Dada Rosada said he was optimistic construction of the project would run as expected.

"Now the launch for the project is being held, but its implementation still awaits the issuance of the permit," Dada said.

State Minister for Research and Technology Kusmayanto Kadiman, who attended the launch ceremony, said he supported the project.

Kusmayanto said his office's support was dependent on the use of proper technology designed to reduce the level of pollution.

"We are not the operator ... the one in charge of the project is the municipal administration. Our duty is just giving a proposal on the most appropriate technology," Kadiman said.

The launch ceremony was held seven kilometers from the site for the project.

The event was protested by residents fearful the plant will worsen air pollution in the city through carbon dioxide emissions.

The technology suggested for the power generation, Kadiman said, would be able to maximize usage but minimize risks.

He cited as an example the burning of plastic waste, which has the risk of releasing poisonous substances into the environment.

Active dissemination on how to reduce waste through the application of three Rs -- reuse, reduce and recycle -- should also be pursued, he said.

The power plant project, designed to process about 100 tons of household waste per day, will likely be built by the municipal administration together with the construction of a 60,000-seat sports stadium.

The two projects are estimated to cost about Rp 350 billion (US$38.80 million) each, with the funding to come from both the municipal and provincial budgets.

French Areva to invest $15m for business expansion in Indonesia

The Jakarta Post, Jakarta  |  Sat, 03/29/2008 11:12 AM 

French electrical components supplier Areva plans to spend 10 million euros (US$15.7 million) over the next couple of years on expanding its business in Indonesia.

Visiting Areva chief executive officer Philippe Guillemot told reporters Thursday the investment would be aimed at doubling the firm's production capacity as well as at introducing new technology for the local market.

"We are seeking other opportunities in the industrial sector, including in oil, gas and mining firms, as well as in a government-sponsored 10,000 megawatt power project," he said.

Aside from state power firm Perusahaan Listrik Negara (PLN), Areva's principal customers include U.S. Freeport, local steel producer Krakatau Steel, U.S. Chevron and French Total.

The firm plans to involve itself as a supplier of transmission and distribution devices in the 10,000MW power project.

Areva sales director for Indonesia Yann Reynaud said more investment was needed to help the company maintain its export activities, which currently account for 55 percent of the firm's total sales.

Reynaud said it was important for the company to raise production capacity in Indonesia to meet export demand from Australia, South Africa and Senegal.

In addition to having its own manufacturing units, the company also runs with PLN a joint venture firm named Unindo, which is 65 percent controlled by Areva and 35 percent by PLN.

Reynaud estimated the company's Indonesia assets in the region of 150 million euros, comprising two manufacturing units and three regional sales offices.

Areva said it supplied 80 percent of Indonesia's electricity components. -- JP/Ika Krismantari

BII leads loan syndication worth US$25 mln for JSK

Jakarta (ANTARA News) - Bank Internasional Indonesia (BII) is cooperating with Bank Niaga and Bank Ekspor Indonesia in providing a syndicated loan of US$24 million to PT Jaya Samudra Karunia (PT JSK) shipping.

PT JSK will use the syndicated loan to purchase a bulk freighter of Panamax type with a capacity of transporting 60,000 tons of bulk goods, which would support the development of the coal industry in Indonesia.

"The syndicated credit facility constitutes an effort to support the government`s program in the sea transportation and infrastructure sectors, particularly in the building of coal-fired power plants," Corporate Director of BII Dira K Mochtar said in a press statement made available to ANTARA here on Friday.

He said that shipbuilding and shipping industries in the country would continue to grow in line with the development of commodity industries.

He said that BII`s financing of the shipping industry up to the end of 2007 has amounted to Rp1.3 trillion. "And we will continue to develop it," Dira K Mochtar said.

In the meantime, PT JSK`s Chief Executive Officer Dennis SK Jan said that shipbuilding and shipping industries in Indonesia were in dire need for financial support from the banking sector.

Japan lends 1 billion dollars to Indonesia, other nations

Tokyo (ANTARA News) - Japan said Friday it is extending low-interest loans worth a total of one billion dollars to Indonesia, Mongolia and the Philippines to fund infrastructure and education projects.

Japan's foreign ministry said it signed off on loans worth 60.7 billion yen to Indonesia for projects including expanding the medical research department of the University of Indonesia.

The money will also go to lay another track in Java on one of the country's busiest rail routes, a ministry statement was quoted by Thomson Financial as saying.

Japan also extended a loan worth 17.1 billion yen to the Philippines to provide extra funds to build a Japanese-funded expressway in Central Luzon.

Costs rose in part due to higher steel prices and foreign exchange fluctuations, the ministry said.

Japan also said Friday that it has agreed to lend 22.8 billion yen to Mongolia to build a new airport in Ulan Bator, saying the current airport could not handle rising air traffic.

Japan, the world's second largest economy, relies on low-interest loans as a key element of its foreign policy and has focused on building relations with Southeast Asia.

Separately and earlier this week, it also promised another 22.08 billion yen in low interest loans to Indonesia.

Japan often announces funding decisions in the days before its fiscal year ends on March 31.

Japanese to spend US$6 bln on Indonesian oil refinery, LNG projects

Jakarta (ANTARA News/Asia Pulse) - Three Japanese investors have agreed to cooperate with Indonesia's PT Pertamina to invest US$6.5 billion on oil refinery and liquefied natural gas (LNG) projects in Indonesia.

Mitsui Oil Exploration Co. will team up with Pertamina to modify the Cilacap oil refinery in Central Java at a cost of US$1.9 billion expanding its processing capacity from 348,000 to 410,000 barrels of crude per day.

Pertamina will also, in cooperation with Itochu Corp. (TSE:8001), expand the daily processing capacity of its oil refinery in Balikpapan from to 280,000 barrels and that of the Balongan refinery in Indramayu to 250,000 barrels at a cost of around US$3.2 billion, a Pertamina official said. Pertamina also plans to build an LNG plant in Senoro, Central Sulawesi at a cost of US$1.4 billion in cooperation with Mitsubishi Heavy Industries (TSE: 7011).

Jakarta tells Samak it wants to buy Thai rice

The Bangkok Post

Jakarta (TNA) - Prime Minister Samak Sundaravej on Thursday said that Indonesia expressed a desire to buy Thai rice on an annual basis and that he told Indonesian officials Thailand wants to purchase liquefied petroleum gas (LPG) from Indonesia in return.

Referring to his Wednesday discussion with Indonesian President Yudhoyono Susilo Bambang during his two-day state visit to the country, he said the Indonesian government had a proper understanding of political developments in Thailand.

Regarding bilateral cooperation, he said, both sides are willing to give full cooperation and provide mutual assistance in all areas.

Initially, the Indonesian government expressed its intention to buy 100,000-300,000 tonnes of Thai rice each year and the Thai government wanted to purchase one million tonnes of LPG from Indonesia in reciprocation.

Additionally, Jakarta was willing to support Thailand’s plan to buy fertilizers, which are abundant in Indonesia.

He said officials of both sides would check product prices in details and make a purchase order in due course.

Mr Yudhoyono said Thailand and Indonesia would discuss the bilateral cooperation in all levels and expand their cooperation in trade and investment, security, energy, and fishery affairs to increase trade value.

The Indonesian leader reaffirmed his support in the energy cooperation, saying Thailand would be allowed to co-invest in Indonesia's oil and gas exploration and production in Indonesia.

Indonesia is the sixth country in the region that Mr Samak has visited since becoming Thailand's new prime minister last month. He has also visited Laos, Cambodia, Singapore, Burma and Vietnam.

Apexindo wins new, extension contracts worth 57.7 million usd

Jakarta (ANTARA News) - Publicly listed PT Apexindo Pratama Duta (Apexindo) has been awarded new and extension contracts on oil rig projects worth US$57.7 million, an executive of Apexindo said.

"We have won a contract extension on a swampbarge rig project Raissa, in Tanu oil field, Kalimantan worth US$57.7 million. Besides, We also won a new contract on its onshore field worth US$4.6 million," Agustinus Lomboan, Apexindo`s finance director, said here on Thursday.

He said that the extension of the contract for another three years would contribute to the strengthening of the cash flow of the company in the future. Besides, the extension and new contracts would also reduce uncertainties to be faced in the future, he said.

Lomboan said the increase in rigging business activities in the country created positive impact on the company where Apexindo had been proactive in taking part in various rig project tenders both for offshore and onshore.

"We will try our best to maintain consistency in increasing the company`s efficiency drive and boosting corporate growth in both offshore and onshore rigging business," he said.

He added that Apexindo also hoped that it would be able to increase its profitability and sustainability in order to guarantee higher turn out for shareholders.

Indonesian tops regional survey for recreational shopping

The Jakarta Post, Jakarta, | Wed, 03/26/2008 1:15 AM 

Indonesia, Southeast Asia's largest economy, has been ranked at the top of a survey of Asian countries for believing shopping is an alternative recreational family activity.

The survey, conducted by AC Nielsen, gave the number one ranking to both Indonesia and Hong Kong, with 93 percent of respondents from each country saying they mixed shopping with family recreation and entertainment.

On a world scale, 74 percent of consumers considered shopping as entertainment, according to the survey.

"Shopping during the weekend and at end of the month is considered a family activity. The main enticements are comfort, security and a number of eating out and entertainment facilities," Yongky Suryo Susilo, AC Nielsen Indonesia's retailer service director, said Tuesday.

With few public parks available in most of Indonesia's big cities, families have no other option than to enjoy their free time in shopping malls, the number of which has grown unchecked in the past 10 years.

"People are not only buying products but they are buying an experience too," said Yongki.

The AC Nielsen survey also highlighted the so-called "multi-channel users" behavior of Indonesian consumers, relating to their preference for cruising traditional markets also despite the rapid growth of modern retail outlets.

Based on the survey, AC Nielsen found in Jakarta 83 percent to 99 percent of consumers shopping in modern stores were going to both convenience stores and traditional markets.

"Consumers of modern outlets still depend on traditional stores because of their prices and proximity," said Yongky.

According to the survey, consumers tend to shop in hypermarkets monthly, spending a large amount of money, in supermarkets for weekly needs at a medium or small amount of money, and at traditional markets for daily consumption.

"Young mothers prefer shopping from roving vendors than traditional markets for their daily consumption. They go to hypermarkets with their family for monthly shopping," said Yongky.

The survey also discovered 76 percent consumers were concerned about food safety.

"Apart from considering the quality of the products offered, consumers need hygienic and clean places to shop," said Yongky.

Agus Pambagio, an observer of the protection of consumer's rights and public policy, said that Indonesian customers now had a stronger retail bargaining power.

"The increasing number of shops, both traditional and modern, has given customers more alternatives. This has raised their bargaining power," said Agus.

He said Indonesian consumers were becoming more demanding because they were more aware of their rights. (rff)

Temasek sells BII stake to Maybank for 1.5 bln usd

Singapore (ANTARA News) - Singapore state-linked investment company Temasek Holdings said Wednesday it has agreed to sell its 75 percent stake in Sorak Financial Holdings Pte Ltd, an investment vehicle that holds a 56 percent stake in Bank Internasional Indonesia (BII), to Malaysia's Malayan Banking Bhd (Maybank) for 1.5 billion US dollars.

The transaction is subject to regulatory approvals, Temasek unit Fullerton Financial Holdings said.

Temasek holds the Sorak stake through Fullerton Financial.

"The strategic and financial rationale for the acquisition is extremely compelling. The acquisition will transform our growth prospects in Indonesia and is a huge step forward in our strategy to regionalize our operations through investments in selected high-growth markets," said Aminuddin Desa, acting chief executive of Maybank.

"We are excited as the Indonesian banking sector remains under-penetrated, with excellent long-term growth potential," Desa told Thomson Financial.

"BII is well placed to capitalize on this growth potential given its strong market position, extensive multi-channel distribution network and high-quality customer base."

Maybank told the Malaysian stock exchange that it will make a general offer for the remaining 44 percent of BII, as required by the rules in Indonesia.

The bank said it will file its statement on the buyout offer, which is expected to cost 3.8 billion ringgit, with the Jakarta Stock Exchange and BII in due course.

Asian IT services market to hit $56 bln by 2011: report

Bangalore (ANTARA News) - Asia's IT services market, led by India, is poised to expand at an average annual pace of 10.5 percent to reach 55.9 billion dollars by 2011, an industry research firm said on Tuesday.

Demand for IT services in the region, excluding Japan, was estimated to be worth 37.5 billion dollars in 2007, according to the findings of a report by Springboard Research, an IT market research firm.

India's information-technology services market, forecast to expand at an annual 18.6 percent rate, will remain the fastest growing, said the report.

But as a region, Greater China will offer the largest market opportunity in dollar terms at the end of the forecast period, it said.

"The Asia Pacific IT Services market is arguably the global leader in terms of growth, supplemented with a mix of mature and emerging markets," Phil Hassey, vice president for services research at Springboard, said.

"The markets of interest are not just the top four -- China, India, Australia and Korea -- but the emerging ones like Indonesia and Vietnam, which will register significant growth," Hassey added in a statement.

In India, annual economic growth of nine percent is spurring domestic IT spending as companies upgrade computer systems to stay competitive and consumers log onto the Internet.

The domestic market has largely been ignored by India's industry, which has boomed on work from Western firms trying to cut costs by taking advantage of India's English-speaking, computer-savvy graduates who work for lower salaries.

The Indian market is still "fragmented and a long way from maturity," Hassey said in e-mailed replies to queries from AFP.

Related Stories:

China SMBs set to spend US$42B on ICT

World Food Program Donates US$ 98 Million to Indonesia

Tuesday, 25 March, 2008 | 15:31 WIB

TEMPO Interactive, Jakarta: Coordinating Minister for People's Welfare, Aburizal Bakrie, and the World Food Program (WFP) signed a Memorandum of Understanding for food assistance yesterday. The agreement is aimed to help and rehabilitate the nutrition in Indonesia by extending the assistance and restoration program.

The agreement will be ongoing for three years until December 2010 with total funding of US$ 98 million, including US$ 56 million for food and US$ 42 million for operational costs.

The funding will be to improve nutrition for ages 24-60 months; pregnant women; breast-feeding mothers, and children aged 6-13 years old, and provide additional food for tuberculosis patients and poor families. The funding is also aimed at and sanitation and government assistance for natural disasters. “There is total of 845 million people that will benefit from this program,” said Aburizal, accompanied by WFP Director for Indonesia, Angela van Rynbach.

The effort to overcome starvation and malnutrition is one phase to achieve the Millenium Development Goals (MDG's). “Sufficient food is important to alleviate poverty,” he said.

The food commodities will be distributed to three provinces of West Nusa Tenggara, East Nusa Tenggara, and East Java. The commodities contain rice (58,432 tons), cooking oil (2,484 tons), biscuits (15,524 tons), instant noodles (6,764 tons), and wheat (42,137 tons).

The first phase of the program that goes through March, has been focused on malnutrition prevention, food rehabilitation for pregnant and breast-feeding women, recovery for TB patients, sufficient food in poor areas, and capacity building for related institutions.

REH ATEMALEM SUSANTI

UN issues first green certificate for RI

Adianto P. Simamora, The Jakarta Post, Jakarta | Tue, 03/25/2008 11:20 AM 

After two years, the United Nations has issued the first saleable "certificates of emissions reduction" (CERs) to Indonesia's publicly listed cement maker, PT Indocement Tunggal Prakarsa Tbk. 

The UN executive board on climate change issued a total of 17,635 CERs to Indocement's alternative fuel projects on March 14. 

"It is good news for Indonesia. Hopefully, more companies will be encouraged to switch to greener projects to tap into cash from the carbon trade scheme," Prasetyadi Utomo, secretary of Indonesia's designated national authority (DNA) on Clean Development Mechanism (CDM) told The Jakarta Post on Monday. 

Under the CDM, projects that reduce greenhouse gas emissions and contribute to sustainable development can earn saleable CERs. 

Countries with an emissions reduction or limitation commitment under the Kyoto Protocol can use the CERs to meet part of their obligations under the protocol. 

The certificates can be traded to 36 highly industrialized nations which have legally binding emissions limitation and reduction commitments. A CER currently sells for between 13 and 15 euros. 

The UN will also issue 23,474 CERs to PT Indotirta Suaka Bulan Farm on Tuesday. The company's project, located on Bulan Island near Batam, involves methane capture and combustion from swine manure and is expected to cut 166,000 tons of emissions per year. 

Prasetyahadi said the UN had informed Indonesian environmental officials of a plan to issue another 63,332 CERs to Indocement on Wednesday. 

DNA data shows PT Indocement registered two projects that reduce emissions through the use of alternative fuels such as biomass, rice husks, sawdust and used tires. 

The projects were developed in cooperation with the World Bank. 

The issued CERs are transferred electronically from the CDM Registry through an international transaction log, administered by the UN Framework Convention on Climate Change Secretariat, to national emissions registries. 

As of March 1, the UN had issued CERs to 306 projects, mostly in China and India, totaling 126.6 million CERs. 

The CDM is expected to generate more than 2.6 billion CERs by the time the first commitment period of the Kyoto Protocol ends in 2012. 

The UN has said there are currently more than 948 registered CDM projects in 50 developing countries, and another 2,000 projects in the registration pipeline. 

The government has so far approved 47 CDM projects, of which half were registered this year following the UN climate change conference in Bali. 

Among the approved projects are a fuel switching project conducted by PT Asahimas Flat Glass Tbk at its flat glass manufacturing facility in Sidoarjo, PT Gikoko Kogyo Indonesia's gas flaring project in Palembang and a waste recovery project in Ubud, Bali.

PLN to provide two mln LHE connections for free in Sulawesi

Makassar (ANTARA News) - State-owned electricity company PLN will provide two million light & heat energy (LHE) power connections for free for 450 VA household customers in South, West, South East Sulawesi in the near future. 

"We are now waiting for the arrival of the lamps from Jakarta. We hope we will begin distributing them in May," PLN`s Commercial Manager for South Sulawesi, West Sulawesi, SE Sulawesi office, Irwan Nasution said here on Tuesday. 

He said that each of the household customers would get three light & heat energy lamps of 8 watts so that the number of customers that would get the efficient power connection facility would reach 600,000 or about 60 percent of the 900,000 household customers with the wattage limit of 450 VA in these regions. 

Irwan said that the distribution of the LHE was expected to reduce the use of electricity at peak burdens because in these regions about 70 percent of PLN`s 1.3 million customers were households with a wattage of 450 VA. 

Diece Uinana, PLN`s deputy marketing manager, said meanwhile that PLN would install the LHE connections itself in the customers house in order to guarantee that they would really use the facility.

CORPORATE AID

The Jakarta Post, Mon, 03/24/2008 12:27 AM  

 

Bank BRI president director Sofyan Basyir (left) and Maritime Affairs and Fisheries Minister Freddy Numberi (2nd right) chat with local fishermen after giving aid to 32,545 households in Nelayan village, Muara Angke, North Jakarta, on Sunday. The aid, which consisted of staple food supplies, had a total value of Rp 5 billion (about US$550,000), and was part of the bank’s corporate social responsibility program. (JP/P.J. Leo)

International Paper to invest $4b in pulp factory

The Jakarta Post ,  Jakarta   |  Mon, 03/24/2008 1:10 AM 

A giant U.S.-based paper and pulp company, International Paper, plans to invest more than US$4 billion in a pulp factory and industrial forest.

Director general for forest product management at the Forestry Ministry, Hadi S. Pasaribu, said the pulp factory would have the capacity to produce 1.5 million tons of pulp per year.

"They are planning to establish a 500,000-hectare plantation forest to support the pulp factory," he said, as quoted by Antara.

Hadi said Central Kalimantan and Papua had been chosen as the investment locations despite a lack of supporting infrastructure because no similar businesses operated there.

International Paper revealed their interest directly to Forestry Minister MS Kaban last month. Representative president of International Paper Asia, Thomas Gestrich, and the company's director for strategic planning and development in Asia, Aaron Yu, met with Hadi last week to discuss their plans.

International Paper is currently rated among the three largest pulp and paper producers in the world. They operate two factories in Brazil and Canada.

The company chose Indonesia for its business expansion, Hadi said, after conducting a six-month feasibility survey in a number of Asian countries.

He said the company planned to use 25 percent of its forest for biodiversity conservation.

"They plan to allocate a further 25 percent of the forest to be managed in partnership with the community or small-scale domestic enterprises. The company will manage the remaining 50 percent," Hadi said.

The government offered International Paper two options: to develop a new forest or to acquire existing forests owned by other companies.

Hadi said he had requested International Paper follow Indonesian investment regulations by establishing a local company here.

By 2007, Indonesia had 84 integrated pulp and paper mills, with a total production capacity of 6.5 million tonnes.

Two of its largest pulp and paper companies are PT Indah Kiat, a unit of Asia Pulp and Paper, and PT Riau Andalan, a subsidiary of APRIL, which is part of the Raja Garuda Mas International group.

These two companies produce more than 65 percent of Indonesia's total pulp output. The companies require a total of 9 million tonnes of wood each year.

Some raw material suppliers for the two companies have been banned by the police from logging since last year, because of illegal logging cases, making it difficult for the companies to obtain raw materials.

"If the bans continue to be enforced throughout this year, the factories may need to import wood chips," said president of the Indonesian Pulp and Paper Association HM Mansur.

He said the situation could result in a total loss of 4 billion tonnes of wood production, worth at least $3 billion. (lva)

Indonesia plantation firm to stage IPO in April

Jakarta (ANTARA News/Asia Pulse) - PT Gozco Plantations has said it will sell 1.5 billion shares or 30 per cent of its shares in an initial public offering (IPO) to be held next month.

The company said it hoped to secure approval from the capital market and financial agency watchdog Bapepam in the first week of next month. The company has named CLSA and Semesta Indovest as lead underwriters.

It said that 10 per cent of the funds from the share sales would be used to repay a debt owed by subsidiary PT Suryabumi and 15 per cent to increase its working capital, with the rest to finance seedling growing and cultivation.

Indonesia's Semen Gresik Q4 profit jumps 87 pct

Sun Mar 23, 2008 11:24pm EDT

JAKARTA, March 24 (Reuters) - PT Semen Gresik Tbk SMGR.JK, Indonesia's largest cement firm, posted results on Monday indicating a better-than-expected 87 percent rise in fourth quarter net profit, boosted by a building boom and more efficient operations.

Southeast Asia's biggest economy has seen a push by authorities to increase investment on ageing infrastructure including toll roads, ports, airports and power plants.

State-owned Semen Gresik's net profit rose to 503.5 billion rupiah ($54.85 million) rupiah in October-December from 268.7 billion rupiah a year ago, according to Reuters calculations based on its full year earnings released on Monday and nine-month results.

Analysts polled by Reuters Estimates had predicted a full-year net profit of 1.65 trillion rupiah, implying a fourth quarter net profit of 378.7 billion rupiah.

Gresik's revenue climbed 11.8 percent in the quarter to 2.51 trillion rupiah, as its sales volume for the period climbed 35 percent to 3.9 million tonnes, outpacing a 6.1 percent rise in national consumption.

In 2007, domestic demand for cement rose 6.6 percent to 34.2 million tonnes in 2007 from the previous year, due to such infrastructure projects and property developments in the biggest cities, although Gresik's domestic sales volume for the year rose only by only 1.6 percent.

To meet anticipated higher demand in the future, Gresik had said it plans to construct new factories and its own power plants in an effort to boost its annual capacity by 5 million tonnes, with a total investment of $1.5 billion.

The company had said it aims to boost its capacity by 40 percent to 22.9 million tonnes by 2013 from around 16 million tonnes currently. ($1=9,180 rupiah)

(Reporting by Harry Suhartono, editing by Ed Davies)

Bulgaria and Indonesia to Promote Each Other's Tourism

Novinite.com, 22 March 2008, Saturday

The visit of Indonesia's Minister of Culture and Tourism Jero Wachik in Bulgaria continued Saturday with discussions about how the two countries can promote the tourism contacts between one another.

Minister Wachik said he was going to do everything possible to develop the relations between Bulgaria and Indonesia in the fields of culture and tourism. He stated that the 220 million Indonesian traveled a lot, and that it would a huge success for Bulgaria if it managed to attract at least a part of them.

The Head of Bulgaria's State Agency for Tourism Aneliya Krushkova said in turn she was surprised by that fact that 2 800 Indonesian citizens visited Bulgaria in 2007, the press service of the Agency reported.

Indonesia is visited by 5 million tourists each year, which is just as many as Bulgaria, but Indonesia receives about USD 5 B from tourism, or 9% of its GDP, whereas Bulgaria gets only USD 2,3 B

Saturday evening Minister Wachik is going to present the "Visit Indonesia 2008" program in the National Archaeological Museum attempting to attract as many Bulgarian tour operators and tourist agents as possible. Aneliya Krushkova said this would be an act of promoting the Indonesian tourism in Bulgaria.

Indonesia to open furniture showroom in Shanghai

Shenzhen (ANTARA News) - Indonesia in May 2008 will have a showroom for furniture products in Shanghai, China, in order to promote Indonesian furniture among Chinese people on a continuous basis.

"We will build a permanent showroom in Shanghai to promote furniture and handicraft products in Shanghai in May," chairman of the Indonesian Furniture and Handicraft Products Association (Asmindo) Ambar Tjahyono said here on Friday.

He was in Shengzhen to attend the 22nd Shenzhen International Furniture Exhibition (SIFE), popularly called as a special furniture and handicraft products expo, participated in by 40 Indonesian businessmen and hundreds of Chinese and Asian businessmen.

The building of the showroom supported by the government of Indonesia was the initiative of the private sector that covered the cost.

According to him, Shanghai was chosen as the location of the showroom because the city had a strategic location for holding such exhibitions on account of the city`s advanced and complete infrastructure.

Dubai investors to invest US$3.5 billion in Indonesia

Dubai (ANTARA News) - A number of investors from Duba, the United Arab Emirate (UAE), have expressed commitment to investing US$3.5 billion in Indonesia, President Susilo Bambang Yudhoyono said before concluding his working visit here on Thursday.

President Yudhoyono pointed out that a number of companies in the Middle East such as Bin Ladin Group, Emaar Properties, Gulf Petroleum, Pacific Inter Link, Jumeirah Group, and Ras Al Khaimah would invest in Indonesia.

"They have expressed commitment to investing in Indonesia and said they were happy to do so," Yudhoyono said, adding that the government would try to do its best in creating conducive climate for investment in the country.

Earlier on Wednesday morning Yudhoyono held a business meeting with 75 business makers from 37 companies during his working visit in the United Arab Emirates (UAE).

The president and his entourage arrived at Dubai`s Royal Air Wing international airport at 7.15 local time on Tuesday after flying for about 10 hours from Johannesburg, South Africa.

After the meeting with the businessmen, Yudhoyono held a special meeting with a number of businessmen including the CEO of Emaar (tourism investor in Lombok), M Ali Alabbar, the CEO of Pacific Inter Link (Agrobusiness), Fouad Hayil Saeed from Qatar Islamic Bank, Abdul Latif bin Abdulla al Mahmod of Ras Al Khaimah dealing with infrastructure sector.

In addition, President Yudhoyono also met with Crown Prince Sheikh Saud bin Saqr al Qasimi and Sheikh Bakar bin Ladin to discuss about investment opportunities in Indonesia.

The president and his entourage were scheduled to return home from Dubai at 07.30 a.m. local time after making a 10-day overseas tour of four countries - Iran, Senegal, South Africa and the United Arab Emirates (UAE).

The President`s 82-member entourage included Foreign Affairs Minister Hassan Wirajuda, Minister/State Secretary Hatta Radjasa, Trade Minister Mari Elka Pangestu, Religious Affairs Minister Maftuh Basyuni and chairman of the Indonesian Chamber of Commerce and Industry (KADIN) MS Hidayat.

Indonesia`s United Tractors to invest US$200 mln this year

Jakarta (ANTARA News/Asia Pulse) - Indonesian heavy equipment company PT United Tractors (UT) (JSX:UNTR) said it will spend US$200 million this year, mainly on new equipment.

United Tractors finance director Gidion Hasan said replacement of old equipment used by its subsidiary PT Pamapersada will cost around US$150 million.

PT Pamapersada operates in mining contracting service handling a number of projects awarded by a number of major coal mining companies such as PT Adaro Indonesia, PT Kaltim Prima Coal, PT Tambang Batubara Bukit Asam (JSX:PTBA) and Kideco Jaya Agung.

Mercedes intending to make RI bus production base for three regions

Jakarta (ANTARA News) - German auto maker Mercedes Benz intends to make Indonesia a production base for its buses for markets in Southeast Asia, the Middle East and Africa, a company executive said.

"Our choice fell on Indonesia because we have experience in investing in this country and Indonesia is a potential market for passenger cars like buses," Mercedes Benz CEO for Indonesia Rudi Borgenheimer said after a meeting with Vice President Jusuf Kalla here, Tuesday.

He said, he would hold further internal meetings on the plan with the company`s headquarters in Stuttgart, Germany.

"The formal decision (to make Indonesia a Mercedes Benz bus production base) will possibly be taken within the next six months. After that, in two or three years our factory in Indonesia (in Gunung Putri, Bogor) can begin production," he added.

To increase its bus production capacity to 9,000 units and meet demand in the three regions of the world, Mercedes Benz would have to make a total investment of some 10 million Euro.

Currently, Mercedes Benz was turning out 600 buses and 2,250 sedans per year in Indonesia.

With the plan to make Indonesia a bus production base for three regions, the company would increase its production capacity to 9,000 units per year, Brgenheimer said.

"We are optimistic about this plan. Because we have the experience and a good history in Indonesia. In the early 1990s we were producing 2,000 buses per year in Indonesia," he said.

Sigma eyes 50 percent rise in revenue after acquisition

The Jakarta Post , Jakarta , | Tue, 03/18/2008 1:13 AM

Information communications technology (ICT) provider PT Sigma Cipta Caraka, newly acquired by PT Telkom, is targeting the addition of 120 clients and at least US$40 million in revenue this year.

Sigma was acquired by Telkom on Feb. 22 when the nation's largest telecommunications firm purchased an 80 percent stake in Sigma for $35 million.

"We're optimistic of the target due to the huge potential the ICT industry offers in the country," president director Djarot Subiantorom said Monday, adding that the revenue target was a 50 percent increase from last year's.

Sigma currently has 170 clients, mainly banks, while Telkom has around 6,000.

The acquisition would help Sigma achieve the target, Djarot said.

"Apart from benefiting from Telkom's huge number of clients, the arrival of Telkom is expected to strengthen Sigma's competitiveness in terms of network competency as well," said Djarot.

"By this acquisition, both Telkom and Sigma hope to be main players in ICT at a regional level," he said, adding that the company planned to go public with a 20 to 30 percent release of its stake within two years.

The acquisition was Telkom's first in the ITC sector. Telkom has said it is planning soon to acquire 12 IT companies in Southeast Asia and South Asia.

Matahari to spend big on new store

The Jakarta Post , Jakarta , | Tue, 03/18/2008 1:16 AM

Publicly listed retailer PT Matahari Putra Prima is planning to invest as much as Rp 450 billion (US$49 million) on 15 new hypermarkets this year, the firm's executive says.

Director of merchandising and marketing for food business, Carmelito J. Regalado, said the new stores would be concentrated in Bali, Kalimantan and Sulawesi.

Matahari's hypermarket business, under the flagship Hypermart, contributed 42.5 percent to the firm's total revenue last year.

The company recorded consolidated sales of Rp 9.8 trillion last year.

"This year we are introducing the last generation of our grocery shopping experience, by building the first Hypermart that stands alone from malls or other shopping centers," he said.

The company has just built its 38th 10,000-square-meter Hypermart store at Puri Village in West Jakarta.

"Starting from this year we are going to continue with the concept. All of our new hypermarket stores will stand on their own," Regalado said.

According to Hypermart vice president for store operations, Emi Nuel, there are currently a total of 112 hypermarkets in Indonesia.

"Carrefour has 40 stores, while Matahari has 38 stores and Giant 17 stores. The remaining ones are owned by other firms," he said, adding that the firm would remain committed to supporting small-scale suppliers with training.

"As with other Hypermart stores, we'll provide trainings for the (Puri Village) store's 80 suppliers. We have also prepared an area large enough for 20 street vendors in the back of our Hypermart in Puri Village," Emi said.

Matahari built its first hypermarket in 2004. (lva)

ADB Funds Environmental Plan to Save 'Coral Triangle' and 'Heart of Borneo'

Asian Development Bank

(14 March 2008) - The Asia Development Bank will provide a $1.5 million grant for environmentalists to work with Brunei, Indonesia, Malaysia and the Philippines to draw up a plan to protect the region's seas and rainforests which are being damaged at an alarming rate.

Read the full story

Sampoerno Agro to spend Rp 600b to up output amid rising CPO prices

Agustina Wayansari , The Jakarta Post , Jakarta | Sat, 03/15/2008 11:56 AM

Riding the wave of soaring prices of crude palm oil, publicly listed palm oil producer PT Sampoerna Agro is setting aside up to Rp 600 billion (US$65.2 million) this year to boost production.

Finance director Eddy Kurniawan said the money would be spent on new land, factories and supporting infrastructure -- in order to increase its production of palm oil to 1.27 million tons this year.

"In the near future, we will increase our plantation area by up to 15,000 hectares, managed both by ourselves and in partership with local farmers in Sumatra, Kalimantan and Sulawesi," he told reporters after a shareholder meeting.

The company, which currently manages 78,710 hectares of plantations mainly in Sumatra, produced 1.18 million tons of crude palm oil last year, up from 1.15 million tons in 2006, Eddy said.

The Indonesian Palm Oil Association said Thursday the country's CPO production would increase by 27 percent this year from 18.4 million tons in 2007.

Eddy said Sampoerna managed five factories, four in Palembang, South Sumatra, and one in Kalimantan, with a combined production capacity of around 350 tons per hour.

He said buying other existing plantation companies would be too costly.

President director Allan Goh said the company had adequate cash reserves to buy the land, after benefiting from crude palm oil prices nearly doubling last year to US$1,200 per ton, up from $585 in 2006.

Allan said Sampoerna might consider seeking extra funding from outside sources, including loans from banks, in case it needed additional capital for its expansion.

"The number (Rp 600 billion) is our conservative estimate, with CPO prices assumed at between $800 and $950 per ton," he said.

Goh said the company would remain focused on the local market this year, with 94 percent of its output sold to the domestic market in the last two years. The remaining oil was exported mainly to India and China.

"The local market offers us better prices and lower operational costs for transportation and logistics management," he said.

Sampoerna also announced it would allocate some Rp 10.99 trillion out of a Rp 249.135 trillion net profit in 2006 to be distributed as dividends for shareholders.

With total shares of 1.89 billion, each share has a dividend of Rp 126.

City to have more elevated roads as of next year

Mustaqim Adamrah , The Jakarta Post , Jakarta | Wed, 03/12/2008 11:55 AM

Governor Fauzi Bowo said Tuesday the capital would start a Rp 40 trillion (US$4.2 billion) project constructing elevated roads across all municipalities in Jakarta next year. Six toll roads are included in the project.

"We must understand that horizontal road expansion is no longer a favorable solution in easing traffic jams," he said at City Hall.

"Therefore, we have no other choice except to build more elevated roads."

He said elevated toll roads were also part of a plan to generate revenue for the city.

"We could use more revenue from toll roads to fund the development of other roads, as well as the development of an MRT, the monorail and the busway," said Fauzi.

The MRT (Mass Rapid Transit) is a rail system Jakarta has been planning since 1984. Plans to begin construction this year have again been delayed until 2010.

He said, however, more research was required to measure the impacts of the construction, such as congestion.

"Both the central government and the city administration agree road expansion on ground level will not solve transportation issues in the city," he said.

"But we can think of another way to solve traffic problems. We have to carefully decide the locations of the toll road exits and entrances in the design."

Wrong locations of toll road exits and entrances, Fauzi said, would create worse traffic jams.

He also said the money needed to fund the elevated roads project would come from the administration, the capital market, the money market and loan syndicates.

Fauzi said the city would start the toll road construction in North Jakarta because MRT construction was planned for the same time in the south.

The Rp 8.3 trillion ($913 million) MRT project will stretch 14.3 kilometers from Lebak Bulus, South Jakarta, to Dukuh Atas, Central Jakarta and is expected to be finished in 2014.

In addition, Fauzi said the design would also calculate increased air pollution resulting from road expansions that consequently encourage more people to use vehicles.

The six planned toll roads

1. Rawa Buaya, West Jakarta - Sunter, North Jakarta 18.6 km
2. Kemayoran, Central Jakarta - Kampung Melayu, East Jakarta 9.7 km
3. Pasar Minggu, South Jakarta - Casablanca, South Jakarta 9 km
4. Kampung Melayu, East Jakarta - Tomang, West Jakarta 12 km
5. Sunter, North Jakarta - Pulo Gebang, East Jakarta 12.5 km
6. Ulujami, South Jakarta - Tanah Abang, Central Jakarta 8.6 km

Pertamina, Iran firm to build $6b refinery

Riyadi Suparno , The Jakarta Post , Tehran | Wed, 03/12/2008 1:34 AM

State oil company PT Pertamina signed here Tuesday a joint venture shareholder agreement with National Iranian Oil Refining & Distribution Co. (NIORDC) and Petrofield Refining Company of Malaysia to build a US$6 billion oil refinery plant in Banten.

Pertamina president Ari Soemarno explained that within two weeks of the signing, the three parties would establish a joint venture company in Indonesia which would start immediately on the project to be located in the neighboring province near Bojonegara.

If things proceed as expected, the refinery plant will be ready by 2012, with most of the four-year period to be consumed with construction of the physical plant itself.

"We don't know yet the possible impact of the new sanctions (adopted by the United Nations Security Council) against Iran on our project. But we hope this project will proceed as is," Ari said.

He said Pertamina and Oil Refinery Industries would each have a 40 percent stake in the new company, with Petrofield holding the other 20 percent.

Pertamina, he said, would use a combination of internal financing and loans to come up with its capital contribution to the project. The loans were expected to make up some 65 percent of the total.

During phase one, the refinery would run at 150,000 barrels of crude oil per day. Pertamina and its partners are planing to eventually expand refinery capacity to 300,000 barrels per day.

"Iran is committed to supplying half of the crude oil needs of the refinery, in other words, 150,000 barrels per day," NIORDC president Mohammad Reza Nematzadeh said.

The 300,000 barrels crude oil figure translates into 200,000 barrels of fuel, or about one sixth of the country's total needs.

Currently, because of limitations in domestic refinery capacity, Indonesia imports fuel - -mostly from Singapore -- to the tune of about 400,000 barrels of crude oil equivalent daily.

Thus, once the Banten refinery plant is up and running, it is hoped the coutry will be further able to realize substantial reductions in its dependence on imported fuels.

In addition to the oil refinery plant, Pertamina is also looking into the possibility of investesting into the upstream oil industry in Iran.

Pertamina, Ari said, has participated in a tender for the Laleh offshore oil and gas block, in which it ranked second in the list after an Iranian oil company.

"The Iranian company has agreed to take us as a partner in developing this Laleh oil field. So, we are looking into this possibility of entering into Iran's upstream industry," he said.

Laleh is one of 17 oil and gas blocks the Iranian government has recently put on offer.

Iran is the second largest oil producer at the Organization of Petroleum Exporting Countries (OPEC).