PLN signs procurement contracts

Jakarta (ANTARA News/Asia Pulse) - Indonesia's state-run power firm PLN had signed two engineering procurement contracts worth US$888.4 million with Chinese companies for the construction of coal-fired power plants, local press said Saturday.

The first contract worth US$642 million was signed Friday for the 700-Megawatt Tanjung Awar-Awar plant in East Java with a consortium of China National Machinery Equipment Corp. (Sinomac), China National Electric Equipment (CNEEC) and local firm PT Penta Adi Samudra.

PLN also signed another contract worth US$247.4 million for the 200-MW Nagan Raya plant in Aceh with China's Sinohydro Corp, reported leading newspaper The Jakarta Post. PLN President Director Fahmi Mochtar said the projects would run for two years, with the first plant starting commercial operations in October 2010 and the second in January 2011.

Ciputra to invest US$1.1 bln in luxury housing project

Jakarta (ANTARA News/Asia Pulse) - Indonesian publicly-traded construction company PT Ciputra Development (JSX:CTRA) said it will build luxury homes worth Rp10 trillion (US$1.1 billion) in Palembang and Balikpapan.

The company has secured lands totaling 200 hectare in Palembang and 23 hectares in Balikpapan for the locations of the project. Construction would be undertaken in phases starting this year, company director Tulus Santoro said, adding that implementation would take 5-6 years in Balikpapan and 10 years in Palembang.

Germany grants 33 scholarships to Indonesian academician

Jakarta (ANTARA News) - The Federal Republic of Germany officially awarded German Academic Exchange Service (DAAD) long-term scholarships to 33 young Indonesian academicians.

The awarding of the scholarships was held at the German embassy here during a farewell party for Mrs Ilona Krueger-Rechmann, Director of DAAD Jakarta Office who will be returning to her country in July this year.

Funded by the German Federal Ministry of Foreign Affairs and Ministry of Economic Development and Cooperation, the Indonesian scientists and professionals will take part in master`s or PhD programs at renowned German universities, German Charge d`Affaires to Indonesia Mr Hans Joerg Brunner said on the occasion.

The scholarship awardees had been selected by a joint Indonesian-German Committee of Scientists.

Since the beginning of the exchange program between the two countries several decades ago, about 25,000 Indonesian students and scientists have studied or done research work in Germany.

In the meantime, Mr Hans Joerg Brunner, the German Charge d`Affaires, in his address said the granting of the scholarships was a manifestation of the Indonesian-German close relations in the field of education.

Strengthening cooperation in the educational sector would contribute to the improvement of human resources in Indonesia. Development in many sectors could only materialize if it was supported with professional and skilled human resources, he said.

Not only in education, but his country would give more attention to economic cooperation, he said, adding the bilateral relations between the two countries were close and harmonious.

"In the future, not only Indonesian students continued their study in Germany, but German students will also get a similar opportunity in Indonesia, he said.

Nowadays, Germany is still popular as a place for higher education of Indonesians.

About 25,000 Indonesian students chosen German universities. Therefore, for Indonesian students, Germany was the first destination in Europe and the fourth in the world.

The German Academic Exchange Service is one of the world`s largest intermediary organization in the field of science and is also supporting the international academic exchange between Germany and other countries.

Under its different exchange programs, DAAD awards around 400 scholarships to Indonesians for academic studies and research work each year.

India`s Gail, Pertamina to cooperate in oil and gas business

Jakarta (ANTARA News/Asia Pulse) - Indonesian state oil and gas company PT Pertamina said it has agreed with India's GAIL Ltd (BSE:532155) to cooperate in the oil and gas business in the upstream and downstream sectors.

Under the agreement, Pertamina has been offered the option to develop oil fields in India and GAIL has been invited to invest in city gas projects in Indonesia, Pertamina vice president Iin Arifin Takhyan said.

He said Pertamina will offer cooperation with GAIL in developing compressed natural gas for city gas, which is growing in demand in Indonesia as fuel prices soar.

Antam to start building US$400 mln alumina plant in Tayan, W Kalimantan

Jakarta (ANTARA News/Asia Pulse) - Indonesia's state-owned mining company PT Aneka Tambang (Antam) (JSX:ANTM) is set to start construction of a US$400 million alumina factory in Tayan, West Kalimantan.

Based on the feasibility study, the cost of the project will rise to to US$400 million from an earlier estimate of US$250 million. The exact figure is still being studied but it will increase to at least US$400 million due to a surge in construction costs, Antam corporate secretary Bimo Budi Satriyo said.

Construction, due to start in the second half of the year, will be handled by PT Indonesian Chemical Alumina, a new company jointly owned by Antam, Showa Denko KK (TSE:4004) and Marubeni Corp. (TSE:8002).

Antam President Dedi Aditya Sumanagara said the project is expected to be completed in 2010, and it will have a production capacity of 300,000 tons of alumina a year.

Inacraft eyes global buyers

The Jakarta Post, Thu, 04/24/2008 12:26 PM 

President Susilo Bambang Yudhoyono officially opened Wednesday the 10th Jakarta International Handicraft Trade Fair (Inacraft), the biggest annual handicraft expo in the country.

BUYERS WELCOME: (JP/J. Adiguna)

Inacraft, which is organized by the Indonesian Handicraft Producers and Exporters (ASEPHI), will run until April 27 at the Jakarta Convention Center. 

This year, the fair involves 1,700 domestic and foreign participants offering a wide range of handicrafts, including jewelry, textiles, accessories and traditional decorations. 

In 2007, Inacraft involved 1,650 participants generating Rp 67.14 billion in retail sales and $6.43 million in business contracts. 

Yudhoyono said the handicraft industry contributed Rp 105 trillion to gross domestic product (GDP) last year and created five million new jobs. Handicraft exports, valued at $620 million, grew by 19.5 percent on 2006. 

"Although export is important, don't focus only on exporting. Promote and offer the products to Indonesians who are able to buy them." 

He said the domestic market was still strong and would get stronger if people's purchasing power increased. 

The President also encouraged handicraft workers to keep increasing production and quality in line with increasing demand. -- JP/Novia D. Rulistia

Foreign insurance firms eye expansion

The Jakarta Post, Thu, 04/24/2008 12:25 AM  |  Business

Five insurance companies from France, Singapore, the United Kingdom, Italy and Malaysia are seeking local partners to tap the increasingly lucrative Indonesian life insurance industry, an insurance association says.

Chairwoman of the Indonesian Life Insurance Association (AAJI) Evelina Pietruschka said in a statement Wednesday the companies had approached the association for information on qualified companies for potential partners.

"They are now seeking suitable partners to enter the life insurance industry here," she said.

The association refused to name the foreign companies.

Optimism over the country's higher economic growth coupled with the need for a diversified long-term investment portfolio are the primary reasons the foreign companies are setting out to engage the Indonesian market.

The association has forecast a 30 percent growth in revenue from premiums for 40 major insurance firms in Indonesia this year, to around Rp 58 trillion (US$6.3 billion).

Last year, the industry experienced unprecedented growth of 67 percent from Rp 26.5 trillion in 2006 to Rp 44.4 trillion, according to the AAJI.

"For five years, the industry grew by 25 percent each year. But last year's 67 percent jump in revenue from premiums was an outstanding phenomenon.

"The growth was fueled mostly by a shift in investor interest in putting money more into long-term insurance products than into short-term bank deposits. I believe the trend will continue as the public becomes aware of the benefits of insurance," Evelina said.

With investable funds worth Rp 90.9 trillion last year, up by 50 percent from Rp 60.7 trillion in 2006, the industry recorded a 76 percent jump in investment proceeds to Rp 10.4 trillion.

The 40 insurance companies' combined assets were worth Rp 101.2 trillion as of 2007, a 52 percent increase from the previous year.

The companies include a state-owned firm, 24 domestic firms and 15 joint ventures.

R&D expo to strengthen business competition

Novia D. Rulistia, The Jakarta Post, Jakarta | Thu, 04/24/2008 12:26 AM

The Industry Ministry and the private sector will jointly organize the nation's first research and development expo next week to promote use of R&D in industry and strengthen competition.

Head of standardization at the ministry's R&D agency, M. Najib said Wednesday many R&D products developed by research agencies remained unused by industry due to poor marketing.

"The products of research and development usually stop at the laboratory. Many companies are reluctant to come to the laboratory. This exhibition will bring R&D and business closer together to help improve the industrial sector," he said.

He added improvement in research and better use of R&D would help improve national economic performance.

The expo, scheduled for April 29 to May 1, at the Jababeka industrial estate, will involve 56 participants from private and state companies, 26 R&D agencies and several universities.

Najib said the expo was expected to become a national gateway for small and medium enterprises to find the latest appropriate and affordable R&D products.

Jababeka's president director S.D. Darmono said most small enterprises did not have R&D capacity, so were less competitive.

Analysts say a lack of R&D incentives has contributed to the low quality of industrial products.

Last year, according the government, the allocation for R&D was only 0.04 percent of GDP, compared to almost 2 percent in Malaysia and Singapore.

Indonesia's annual spending on research averages some US$300 million, far behind China's $76 billion, or even Malaysia's $1.2 billion and Singapore's $2 billion.

"In developed countries, like Singapore, the government pays the whole cost of the R&D process if they want a product to be completed right away with good quality," Darmono said.

Summarecon to build 30,000 homes in Bekasi

The Jakarta Post, Sat, 04/26/2008 12:02

Publicly listed construction firm PT Summarecon Agung is set to expand its property business by building 30,000 houses for middle and upper-income families in West Bekasi.

President director Johannes Mardjuki said after a shareholder meeting Friday the company was optimistic the houses would sell out as the company already had experience in property projects in Jakarta and Tangerang.

The houses will be built at an investment of some Rp 275 billion (US$29.8 million), he added.

Johannes also said the company was in the process of building a 300-room hotel near Kelapa Gading Mall in North Jakarta, which was expected to start operating in the middle of 2009.

The company is also planning to construct eight levels of Plaza Summarecon Serpong office building in Serpong, Tangerang, for operation in 2008.

"The company has allocated Rp 100 billion from internal cash for the hotel's development and Rp 45 billion for the office in Serpong," he said.

Following higher demand for houses, apartments and shop-houses in Kelapa Gading and Serpong, the company recorded sales of Rp 1.03 trillion last year, up by 6 percent from Rp 965.25 billion in 2006.

Sales in the two areas accounted for 66 percent of the company's total sales last year.

"Demand for houses has increased following stronger public purchasing power and favorable interest rates," said Johannes. (JP/rff)

Regions to offer US$8 billion worth of projects in next investment forum

Novia D. Rulistia, The Jakarta Post, Jakarta | Fri, 04/25/2008 12:16 AM

More than 66 regencies have committed to offering a total of 200 projects worth US$6 to $8 billion to investors at next month's Indonesian Regional Investment Forum, says the forum organizer.

"The projects are mostly in the agribusiness, infrastructure, mining and tourism sectors, as we and the Regional Representatives Council (DPD) have agreed to focus on these sectors," Global Initiatives CFO Sydney Yeung said in an interview Thursday.

The total value of the projects submitted by the regencies has exceeded the minimum target of this year's forum at $6 billion.

"The event is still a month away, but we have identified at least 45 interested foreign investors which are suitable for the projects," Yeung said.

He said the interested investors were from investment banks, private equity funds and security firms from, among other places, the United States, the United Kingdom, China, Hong Kong and the United Arab Emirates.

The forum hopes to attract more than 500 investors, including at least 70 foreign investors, who will channel funds to provinces, cities and regencies.

The Indonesian Regional Investment Forum, the second of its kind, will take place May 26 and 27.

Each region hoping to take part in the forum must first present three or more feasible projects with a total investment need of at least $50 million.

Yeung said the organizer would monitor the progress of deals long after the conclusion of the forum, so as to measure the success of the event.

"Through this forum, we want to ensure that the money and the projects are real, by keeping an eye on the projects for at least 12 months after the forum ends," he said.

Yeung said that in addition to help stimulate regional economies, the forum would also promote regulations related to direct investment.

"The government should inform investors of the regulations in all the sectors that we're focusing on. The regulations need to be explained and updated, which areas investors can enter and which they can't," he said.

"It all needs to be clarified in order to protect investors and keep them investing here."

The Investment Coordinating Board said direct investment in the country rose by 86 percent in the first quarter of this year to $8.33 billion from $4.48 billion in the same period last year.

VP orders PLN to speed up power plant constructions

Adianto P. Simamora, The Jakarta Post, Cilegon | Mon, 04/07/2008 11:17 AM

Vice President Jusuf Kalla renewed calls Friday for state-owned power company PT Perusahaan Listrik Negara (PLN) to speed up construction of coal-fired power plants in a bid to swiftly resolve a power crisis plaguing Java.

Kalla made the statement during his visit to the Suralaya coal-fired power plant in Cilegon, West Java.

"If there are no longer any problems, please speed up the construction. We will reward the management if the project can be finished before schedule," he said.

The 652 Megawatts Suralaya project is scheduled for completion in 2010.

However, since Java has frequently suffered power blackouts due to a lack of power capacity, the government has requested PLN wrap up several key power projects on the island before next year's general election.

President Susilo Bambang Yudhoyono has recently issued a government regulation ordering PLN to complete the construction of 35 planned 10,000 MW plants, 10 of which are to be built on Java, by 2010 at the latest.

Aside from the Suralaya plant, the pipeline projects also include a 600 MW Pacitan plant in East Java, a 900 MW Naga plant in Banten, a 900 MW Pelabuhan Ratu plant in West Java and a 200 MW Lampung plant in Lampung.

"We have just promised the Vice President the Suralaya plant can be completed by March 2009," PLN's Suralaya general manager Chairudin Matondang said.

The Suralaya plant, valued at US$334 million, is being built under a cooperation with China Technical Import & Export Corporation (CNTIC), China National Machinery Import and Export Corporation, Zhejiang Electric Power Design Institute, and local firm PT Rekayasa Industri.

Chairuddin said the construction was disturbed in March by bad weather that hampered incoming materials from China.

There are already seven coal-fired 3,400 MW power plants operating near the Suralaya plant.

PLN has predicted a continuation of the electrical crisis into next year if no extra power is made available.

The Java-Bali power grid has a capacity of 15,000 MW, less than the area's 16,251 MW peak power consumption, forcing PLN to regularly cut off electricity supply in the region.

PLN signs $888m power contracts with Chinese firms

Ika Krismantari, The Jakarta Post, Jakarta | Sat, 04/26/2008 12:02 PM

State power firm PT PLN signed two engineering procurement contracts (EPC) worth US$888 million in total Friday with two Chinese companies for the construction of two coal-fired power plants in East Java and Aceh.

PLN signed the EPC contract for the 700-megawatt (MW) Tanjung Awar-awar power plant in East Java with a consortium of China National Machinery Equipment Corp. (Sinomac), China National Electric Equipment Corp. (CNEEC) and a local company, PT Penta Adi Samudra, with the contract estimated to be worth $642 million.

PLN signed another contract worth $247.4 million for the 200-MW Nagan Raya plant in Nanggroe Aceh Darussalam with another Chinese company, Sinohydro Corp.

PLN president director Fahmi Mochtar said the projects were expected to be completed within 2 years, with the first unit of the plant starting commercial operation in October 2010, followed by the second one in January 2011.

Both plants are part of the government's 10,000-MW power plant project, initially scheduled for completion by the end of next year, but the deadline is likely to be extended due to financial problems.

The program will see PLN build 10 coal-fired power plants with a total capacity of 6,900 MW in Java and 25 power plants with a total capacity outside Java. The program is targeted for completion by 2010.

The program is aimed at raising the country's electricity provision, which currently stands at 56 percent. This means 45 percent of Indonesia's population still lives in the dark.

Approximately 15 percent of financing for the Tanjung Awar-awar and Aceh plants will come from PLN equity, while the remaining 85 percent will come from credit commercials or global bonds.

Fahmi said the two projects had only managed to secure rupiah-denominated loans, while the company is still in talks with a number of lenders to finance the projects.

"We are still seeking the best alternative we can find to get the loans we need," Fahmi said.

The head of the government's power sector development team, Yogo Pratama, said so far the company had secured 60 percent of the $8.3 billion needed to build the power plants under the government's 10,000-MW project.

Financial status of the power project

Power plant location rupiah-denominated loans Bank dollar denominated loans Bank in trillion Rp in million US$

 

• 600-MW Labuan Banten, Java 1.18 BCA 288.6 in talks with Bank of China 
  
• 900-MW Indramayu West Java 1.2 BNI 592.2 Bank of China 
  
• 600-MW Rembang Central Java 1.9 Mandiri 261.8 Barclays 
  
• 600-MW Suralaya Banten 0.735 Mega 284.3 China Export Import Bank 
  
• 600-MW Paiton East Java 0.6 Mega 330.8 China Export Import Bank 
  
• 600-MW Pacitan East Java 1.045 consortium of Mega and 293.2 not yet to secure
  

 

Bukopin

• 900-MW Teluk Naga Banten 1.6 idem 454.9 idem
  
• 900-MW Plb. Ratu Banten 1.87 idem 481.9 idem
  
• 600-MW Tj. Awar East Java 1.49 480
  

 

Awar

• 200-MW Tarahan Baru Lampung 459.9 119.2
  
• 400-MW Pkl.susu North Sumatra 780.8 209.3
  
• 50-MW Jiranjang West Nusa Tenggara 273.8 23.8
  
• 50-MW Gorontalo Gorontalo 264.8 25.8
  
• 50-MW Amurang North Sulawesi 304.5 27.3
  
• 14-MW Tj Balai Karimun Riau 71.2 7
  
• 14-MW Ende East Nusa Tenggara 73.2 7.9
  
• 200-MW Kendari Southeast Sulawesi 97.1 10.3
  
• 200-MW Nagan Raya Aceh 0.795 161
  
• 120-MW Pulang Pisau Central Kalimantan 413.9 idem 62.1 idem 62.1
  

Krakatau Steel, Antam team up for steel plant

Novia D. Rulistia, The Jakarta Post, Jakarta | Wed, 04/23/2008 1:07 AM

State-owned PT Krakatau Steel is teaming up with PT Aneka Tambang (Antam) to build a steel plant in South Kalimantan with a total investment of US$60 million.

Krakatau's president director Fazwar Bujang said Tuesday the joint venture was the follow up to a memorandum of understanding signed by the two companies.

"In phase one, the plant will have a capacity to produce direct-reduced iron bars from 315,000 tons of iron ore, which will be used by Krakatau's plant in Cilegon, Banten province," said Fazwar.

He said the two companies would finance 35 percent of total project cost from equity while securing the remaining 65 percent via a loan from state-owned Bank Mandiri.

"We plan to start construction in November this year and will be operational by 2010," he said, adding that the plant would be named PT Meratus Jaya Iron & Steel.

According to Fazwar, 66 percent of the ownership will belong to Krakatau Steel and 34 percent to Antam.

In the longer term, he said, the plant had potential to be developed into an integrated steel production facility with a total annual production capacity of one million tons through the expansion of downstream products.

He added that the project could also be integrated upstream with the development of ore mining.

"The total investment needed for the overall expansion is estimated at $600 million, excluding funds needed for complementary infrastructural development," Fazwar said.

The long-term expansion proposal is still at the feasibility study stage with Krakatau Steel and due for completion by the end of 2009.

The total production capacity of Krakatau Steel currently is up to 2.5 million tons yearly.

Krakatau Steel's president commissioner Taufiqurrahman Ruki said the project was part of an effort to increase the production capacity up to five million tons per year, as well as to stimulate the economy outside Java.

Recently, the world's largest steelmaker Arcelor Mittal was reported to be eyeing a 40 percent stake in Krakatau Steel.

The government said it needed to study Mittal's proposal to make sure any steps taken would result in the improvement of production capacity.

The government said it planned to conduct either an IPO or strategic sales for Krakatau Steel as part of its privatization program.

According to Krakatau's financial director Sukandar, the firm is targeting a total net profit of Rp 850 billion this year, compared to Rp 367 billion last year. In quarter one 2008, the company already booked Rp 297 billion net profit.

He expects total revenue to reach Rp 19 trillion this year.

Inti Kapuas to buy more oil palm plantations

Jakarta (ANTARA News/Asia Pulse) - PT Inti Kapuas Arowana said it has set aside US$120 million to acquire more oil palm plantations.

Earlier Inti Kapuas signed an agreement for the acquisition of the palm plantations of PT Dendymarker Indahlestari and PT Anam Koto at a price of US$80 million from Malaysia's Boustead Estates Agency.

Corporate secretary Veronica Dini Krissanti said after a shareholders' meeting yesterday part of the fund will also be used to expand the land bank for the future expansion of oil palm plantations.

India`s Binani in talks to buy Indonesian coal mine for $100 mln

Mumbai (ANTARA News/Thomson Financial) - India's Binani group is in advanced talks with Indonesia's largest coal producer PT Berau to buy a coal mine for more than 4 billion rupees (about $100 million), the Economic Times reported citing sources close to the development.

The report said the acquisition will help Binani feed its growing cement operations.

"I can't say which company we are talking to, but it is part of our plan to own raw materials," it also quoted Binani managing director Vinod Juneja as saying.

PT Berau, a joint venture between PT Armadian Tritunggal, the Netherlands' Dan Rognar Holding and Japan-based Sojitz Corp., has coal mining operations in Indonesia with an annual coal production of about 40 million tonnes.

The Indian cement industry requires 25 million tonnes of coal every year out of which 11 million tonnes are imported.

Govt plans to sell 35 percent stake in PTPN III

Jakarta (ANTARA News) - The government plans to sell 35-40 percent of its stake in state plantation company PT Perkebunan Nusantara (PTPN) III through an initial public offering (IPO) probably in the second half of 2008, a minister said.

"Many predicted the market will be favorable in the second semester. If this is so, we will dispose of the stake in PTPN III," State Enterprises Minister Sofyan Djalil said here on Saturday.

The government had yet to dispose of its stake in the company due to the unfavorable market condition, he said.

PTPN III President Director Amri Siregar expressed hope the company would earn Rp1 trillion from the IPO.

"We need an estimated Rp1 trillion to develop upstream and downstream businesses," he said.

The company was waiting for a green light from the government and the House of Representatives (DPR) as stakeholders, to dispose of the stake in the company, he said.

He said the company was ready to conduct the IPO if the government as a shareholder asked it to do so and the DPR approved a plan for the IPO.

PTPN III currently manages 103,424 hectares of oil palm plantations and 38,116 hectares of rubber plantations in North Sumatra.

Last year, the company posted a net profit of Rp702.749 billion.

Oxiana to spend $310m on project

Ika Krismantari, The Jakarta Post, Jakarta | Wed, 04/16/2008 12:31 PM

Australia-based Oxiana Ltd. plans to spend US$310 million this year to construct a gold and silver plant in North Sumatra.

According to Oxiana general manager for external relations Bruce Loveday on Tuesday, the company has secured a contract of work (CoW) for the project as well as the approval for the project's environmental impact analysis, locally known as Amdal.

The project, called the Martabe project, is located in North Sumatra's capital, Medan, and will begin construction in August, after the company secures a construction permit from the Energy and Mineral Resources Ministry.

"All the discussions we have had are very good. A discussion with Pak Sembiring (Simon Sembiring, the director general of minerals, coal and geothermal) says that we may get it (the construction permit) by the end of this month," Loveday said.

The plant is slated to start production at the end of 2009, with a total output of 200,000 ounces of gold and 2 million tons of silver.

The area, with a size of 2,563 square kilometers, has a resource base of 6 million ounces gold and 60 million ounces of silver.

Bloomberg reported that Oxiana, which mines gold, copper and zinc, got the Martabe project after the acquisition of rival Agincourt Resources Ltd. last year.

Loveday said the miner was also considering a partnership with Indonesian companies to expand its operation in the country, adding that negotiations with several local mining firms were underway.

"We can't comment on who we are negotiating with because it is under discussion. But Antam (the state mining company) is one of them," Loveday said.

Loveday said the company planned to offer a 5 percent stake to local governments, as stated in the CoW.

When Antam was ask to confirm, president director Dedi Aditya Sumanagara acknowledged ongoing discussions with Oxiana.

"We are negotiating with Oxiana to buy a stake in the Martabe project," he said without elaborating.

Antam is aiming to raise its business portfolio by either having strategic alliances with other companies or carrying out acquisitions.

It is currently competing with PT Bumi Resources, the country's largest coal producer, to gain a majority stake in another Australian company, Herald Resources, which operates zinc mines in North Sumatra.

MobilityOne signs deals in Cambodia, Indonesia, Malaysia

London (ANTARA News/Thomson Financial) - Digital payment services provider MobilityOne Ltd. announced three deals in Asia as it continues its expansion in the region.

The company said it has secured its first contract in Cambodia through a deal with Telekom Malaysia International, expanded into Indonesia with a deal with Finnet, and has been appointed as a third-party acquirer for a payment scheme run by Malaysian Electronic Payment System.

Financial terms of the deals were not disclosed.

Arcelor Mittal plans $3b investment

Andi Haswidi, The Jakarta Post, Jakarta | Fri, 04/11/2008 12:00 PM

The world’s largest steelmaker Arcelor Mittal plans to team up with state-owned PT Aneka Tambang (Antam) and PT Krakatau Steel to develop mines and a steel plant at a total investment of at least US$3 billion.

The plan was announced by the Investment Coordinating Board (BKPM) following a visit by CEO Lakshmi Mittal to the State Palace Thursday to discuss the investment plan with President Susilo Bambang Yudhoyono.

Mittal, called by Forbes magazine in March the world’s fourth-richest person with an estimated wealth of $45 billion — up one place from a year ago — owns 44 percent shares in Arcelor Mittal.

“Lakshmi came here with a full team, accompanied by his son, who is also the company’s chief financial officer, and top-ranking officials from the company’s merger and acquisition department,” BKPM chairman Muhammad Lutfi told The Jakarta Post.

After the meeting, Lutfi said, BKPM would facilitate cooperation between the company and Antam for securing the supply of minerals, particularly iron ore, nickel and manganese, and with Krakatau Steel for a feasibility study for establishing a steel plant.

Among locations considered appropriate for the steel plant, he said, was Kalimantan considering the proximity to mineral reserves.

Present during the meeting with the President, the Industry Ministry’s Fahmi Idris said the President was very “positive” on Mittal’s proposal and had ordered the Coordinating Minister for the Economy to issue a detailed formal response.

“The response will include, among other things, a requirement for the company to utilize environmentally friendly technology in its operations,” Fahmi said as quoted by Antara.

According to a statement sent to the Post, the President said he hoped the country would be able to learn from the success of Arcelor Mittal, which currently controls 10 percent of the world’s steel supply for automotive, household and other industrial sectors.

The Mittal family started their global empire by establishing PT Ispat Indo in Sidoarjo, East Java, in 1976, already in the steelmaking business with an initial production capacity of 60,000 tons a year. The company currently produces approximately 700,000 tons a year.

Arcelor Mittal was founded in 2006 when Europe-based Arcelor merged with Mittal Steel, which was formed after Ispat International and LNM Holdings, both controlled by Lakshmi Mittal, merged with International Steel Group in 2004.

“The experience of PT Ispat Indo shows we can meet international quality standards. What we must do now is increase production volume,” the President said.

“I ask BKPM and the two state-owned firms to waste no time. This opportunity must be seized through a joint investment.”

RI Consulate in Sydney, Garuda to organize `Discover Indonesia`

Brisbane (ANTARA News) - The Indonesian consulate general in Sydney and national flag carrier Garuda Indonesia will jointly organize a tourism promotion event called "Discover Indonesia" for Australian tourism operators and mass media.

Intended to support the Visit Indonesia 2008 program, the promotional event would be held for two weeks starting late July 2008, Pratito Soeharyo, minister counselor at the consulate, said here Friday.

Representatives of 20 Australian travel bureaus and a number of newspaper and television reporters would be invited to take part in the program, he said.

They would be given the opportunity to visit and see some of Indonesia`s eco-tourism potentials outside Bali, especially on Java, Sumatra, Kalimantan, Sulawesi and Papua islands.

Garuda would among other things fly them to the Bunaken marine park in North Sulawesi, the center for orangutan protection in Kalimantan, and Toba Lake in North Sumatra.

Most Australian tourists visiting Indonesia so far stay mainly in Bali.

For 2008, Indonesia had set a target of attracting seven million foreign tourists and earning around US$6.7 billion in foreign exchange from them.

A total of 5.5 million foreign tourists visited Indonesia last year. Topping the list of countries where the tourists came from were Singapore with 1.46 million tourists, Malaysia (941,202), Japan (593,784), Australia (313,881), South Korea (423,098), China (335,172), Europe (528,171), and the United States (154,846).

IDB Chief meets Indonesian president`s special envoy

Jeddah (ANTARA News) - Dr. Ahmed Mohammed Ali, President of the Islamic Development Bank (IDB) received here last Wednesday Indonesian President`s Special Envoy for the Middle East Alwi Shihab.

The IDB President was briefed on the results of the conference on "Investment opportunities in Indonesia," organized by the Indonesian government last month in Dubai.

On the sidelines of the conference, five Memorandum of Understanding (MoU) between the Indonesian government and Gulf investors were signed.

The MoU were for the implementation of substantial projects development in Indonesia in the sectors of infrastructure, ports, railroads and palm oil refinery at a total cost of nearly $3 billion.

During the meeting, they discussed the possibility of the IDB`s contribution to these projects in general and discussed ways of enhancing the existing bilateral cooperation between Indonesia and IDB.

Medco to build US$55 mln power plant in Singapore

Jakarta (ANTARA News/Asia Pulse) - Indonesia's Medco Energi Group said it will build a US$55 million biomass fuelled power plant in Jurong, Singapore in cooperation with Singapore's Biofuel Indusyries (BI).

The project, using plant and wood waste for fuel, will have a generating capacity of 25 megawatts of power, said Fazil Alfritri, president of Medco Power Venture (MPV), a subsidiary of the Medco Group.

Rajawali Group to develop Cambodian airline

Jakarta (ANTARA News/Asia Pulse) - Indonesia's Rajawali Group on Thursday signed a cooperation agreement with the Cambodian government to develop its national airline.

Under the agreement, Rajawali will build the infrastructure facilities needed to develop the airline, the company's spokesman, Christiantoko, said on Thursday. As a follow-up to the agreement, both sides will set up a new company which will be 49 per cent owned by Rajawali and 51 per cent by the Cambodian government, he said.

Dubai`s Emaar intensifies tourist zone invesment in Indonesia

Mataram (ANTARA News/Asia Pulse) - The biggest state-owned company in Dubai, Emaar Properties LLC Dubai, has been speeding up the realization of its investment in a US$600-700 million integrated tourist zone in the Indonesian province of Central Lombok, West Nusa Tenggara.

"Emaar is speeding up the drawing up of a master plan of the project," said M. Abdul, a member of the Vice Presidential expert staff, when presiding over a meeting on preparations of infrastructure facilities for investment by Emaar Properties LLC Dubai, in Mataram on Thursday.

"All the relevant agencies and institutions need to act quickly, and all the work supporting the investment need to be carried out in parallel," he said.

Air Force to acquire three Sukhoi fighter aircraft this year

Jakarta (ANTARA News) - Three Russian-made Sukhoi or SU-30 jet fighter planes are to arrive in Indonesia later this year, Air Force Chief of Staff Marshal Subandrio said here on Wednesday.

"The three Sukhoi fighter planes from Russia are expected to arrive in Indonesia before the National Defense Forces (TNI) anniversary on October 5," Subandrio said after attending a function to mark the Air Force`s 62nd anniversary at Halim Perdanakusuma airport.

He said the three jet fighter aircrafts would become part of the Air Force`s Sukhoi Squadron V based in Makassar, South Sulawesi.

"The new fighter aircraft from Russia will heighten the state of the Air Force`s operational readiness," Subandrio said, adding that the Defense Ministry was at present negotiating with Russia about the planes` delivery to Indonesia.

Meanwhile, the defense ministry`s director general for defense facilities, Rear Marshal Erik Herryanto, said the ministry and Sukhoi aircraft maker Rosoborn Export would soon finalize negotiations on the supply of six Sukhoi fighter planes to Indonesia.

"The process to purchase the six Sukhois is almost completed and we are now only waiting for the issuance of a letter of credit by the finance ministry," Heryanto said.

The letter-of-credit issuing process would take three to six months so it was still difficult to say when exactly the Sukhois would be delivered, he said.

Hong Kong companies considering relocation to Indonesia

Jakarta (ANTARA News) - A number of Hong Kong companies are looking into the possibility of relocating their plants to Indonesia, an executive said. 

"Today we are going to visit Surabaya to look at possible locations for the plants," chairman of the Indonesia-China Business Council Alim Markus said after accompanying a number of Chinese businessmen at a meeting with Vice President Jusuf Kalla here on Tuesday. 

The Hong Kong companies considered Indonesia a very potential market, he said. 

Chairman of the Hong Kong Chamber of Commerce and Industry Wing Kee Chan said China`s declining competitive edge and newly-enacted labor regulation were among the reasons why the Hong Kong companies wished to relocate their plants to Indonesia. 

"Given the regulation, China`s labor wages become higher than Indonesia`s. The second is that China`s business area has moved to the mainland so transportation costs have jumped accordingly," Chan said. 

In addition, Indonesia, with a population of around 230 million, was a lucrative market, he said. 

The companies wishing to relocate their plants to Indonesia were among others engaged in the energy, infrastructure and manufacturing sectors, he said. 

To date, China is the fifth biggest market for Indonesian exports and the third biggest supplier of goods to Indonesia. 

Both Indonesia and China have committed themselves to increasing their two-way trade to US$30 billion in 2010 from US$20 billion in 2008.

VP orders PLN to speed up power plant constructions

Adianto P. Simamora, The Jakarta Post, Cilegon |  Mon, 04/07/2008 11:17 AM 

Vice President Jusuf Kalla renewed calls Friday for state-owned power company PT Perusahaan Listrik Negara (PLN) to speed up construction of coal-fired power plants in a bid to swiftly resolve a power crisis plaguing Java. 

Kalla made the statement during his visit to the Suralaya coal-fired power plant in Cilegon, West Java. 

"If there are no longer any problems, please speed up the construction. We will reward the management if the project can be finished before schedule," he said. 

The 652 Megawatts Suralaya project is scheduled for completion in 2010. 

However, since Java has frequently suffered power blackouts due to a lack of power capacity, the government has requested PLN wrap up several key power projects on the island before next year's general election. 

President Susilo Bambang Yudhoyono has recently issued a government regulation ordering PLN to complete the construction of 35 planned 10,000 MW plants, 10 of which are to be built on Java, by 2010 at the latest. 

Aside from the Suralaya plant, the pipeline projects also include a 600 MW Pacitan plant in East Java, a 900 MW Naga plant in Banten, a 900 MW Pelabuhan Ratu plant in West Java and a 200 MW Lampung plant in Lampung. 

"We have just promised the Vice President the Suralaya plant can be completed by March 2009," PLN's Suralaya general manager Chairudin Matondang said. 

The Suralaya plant, valued at US$334 million, is being built under a cooperation with China Technical Import & Export Corporation (CNTIC), China National Machinery Import and Export Corporation, Zhejiang Electric Power Design Institute, and local firm PT Rekayasa Industri. 

Chairuddin said the construction was disturbed in March by bad weather that hampered incoming materials from China. 

There are already seven coal-fired 3,400 MW power plants operating near the Suralaya plant. 

PLN has predicted a continuation of the electrical crisis into next year if no extra power is made available. 

The Java-Bali power grid has a capacity of 15,000 MW, less than the area's 16,251 MW peak power consumption, forcing PLN to regularly cut off electricity supply in the region.

Regent hotel chain returns to Indonesia

The Jakarta Post, Jakarta | Tue, 04/08/2008 11:52 AM

The Regent hotel chain is set to return to Indonesia to manage and market a new luxury property to be built by Grand Pacific Properties Ltd. (GPP) on a four-hectare estate on Sanur beach, Bali, with a total investment of between US$75 million and US$100 million.

Carlson Hotels Asia Pacific Pty., which owns the Regent brandname, signed agreements with GPP in Singapore last week covering hotel development services, hotel management and marketing trade licenses.

"The five-star Regent Bali will consist of 150 rooms and 50 villas, each equipped with a private swimming pool," said Victoria Tahir, managing director of GPP and the third daughter of Tahir, chairman of the Mayapada business group, in a press release in Jakarta on Monday. 

The Regent Bali will be the first five-star property in the Sanur beach area. 

Bali, Indonesia's most popular tourist destination, received around 160,000 foreign tourists in February, representing a rise of almost 30 percent from the same period last year, according to the Central Statistics Agency. 

Total tourist arrivals in the country in February were 446,400, up 15.82 percent from a year earlier. 

Victoria said GPP would also develop separate luxury villas, called the Regent Residences, near The Regent Bali complex. 

"The Regent's return to Indonesia reflects a stronger investor confidence in the outlook of Bali as a favorite destination for global tourists, and we are glad to contribute to this momentum of growth," Victoria said. 

The Regent once managed a five-star hotel in the Kuningan area in Jakarta but withdrew a few years ago. The property is now managed by the Four Seasons hotel chain.

South Korea makes high technology investment in Indonesia

Jakarta (ANTARA News) - South Korean Ambassador to Indonesia Lee Sun-Jin said his country has expanded its investment in Indonesia to high technology industries from labour intensive investment. 

"In the recent years our country's investment in Indonesia was no longer dominated by labour intensive industries," Lee, flanked by Councellor Yoon Moon-han, told ANTARA at his residence here on Monday. 

Lee said that several South Korean companies had been operating in the business of machinaries, electronics, chemistry and expansion of natural resources processing, in addition to some existing labour intensive industries such as shoe, textile and wig industries. 

Data issued by the South Korean Embassy showed that the country's investment in Indonesia sharply rose to US$895 million in 2007 from us$320 million in 2002. 

Regarding the balance of trade between the two countries, Indonesia enjoyed a US$3.3 billion surplus. 

In 2007, Indonesia's exports to South Korea reached US$9.110 billion, while the imports from South Korea reached only US$5.770 billion. 

Some of Indonesia's commodities exported to South Korea included LNG, coal, oil, forestry products, rubber, pulp and copper. 

As many as 1,200 South Korean companies operating in different sectors in Indonesia had absorbed more than 500,000 workers, he said, adding that 50 Memoranda of Understanding (MoUs) were signed since Desember 2006. 

Data issued by the National Investment Coordinating Board (BKPM) showed that in 2007 South Korea was the third largest investor and the seventh largest investor in Indonesia in terms of investment realization and investment approval respectively. 

Lee said further the bilateral relations have been improving, among other things by increasing exchange of visits by the two countries' leaders and officials. 

South Korean President Roh Moo-hyun visited Indonesia in December 2006, while Indonesian President Susilo Bambang Yudhoyono made a return visit to South Korea in July 2007. 

"The two countries' leaders have a strong commitment to enhance their bilateral ties in several fields including politics, investment and trade," the envoy said. 

Jakarta and Seoul signed strategic and comprehensive agreements in 2006. 

"The strategic partnership agreement will become a basis for expansion of the relations between the two countries," Lee noted. 

As a follow up of the agreement, the two countries have set minor committees, working groups and task forces in a bid to help improve the two countries' business relations. 

Asked about obstacles to efforts to lure South Korean investors to Indonesia, Lee opined that the coordination between the central government and the regional administrations as well as easier licensing need to be promoted, while sustainable capacity building should also be conducted to create a conducive investment climate. 

"Political stability should also be maintained," Lee said, adding that his country was also ready to cooperate in military affairs, including in the joint manufacture of military arms and on exchange of visits of military personnel. 

The Indonesian Navy is now also using Korean-built landing ship tanks (LSTs) and trucks.