KNOC finds large oil reserve off Papua

Antara / The Jakarta Post - 2007-02-19 16:03:23

JAKARTA (Antara): Korean National Oil Company (KNOC) has found some 671 million barrel of oil reserve in Wakam Block off Sorong regency, Papua province.

Deputy head of The Upstream Oil & Gas Executing Body's (BP Migas) for planning division Achmad Luthfi said Thursday that the finding in 2006 would significantly add to the national oil production.

"KNOC has to carry out further study about the amount of the oil reserve," Achmad was quoted by Antara news agency as saying Thursday, adding that further study needed to know the exact amount of the oil reserve.

If the oil reserve is confirmed, it will be larger than reserve in Cepu Block in Central Java, he added.

Government Guarantees Infrastructure Financing

Monday, 19 February, 2007 | 16:36 WIB

TEMPO Interactive, Jakarta: The government will guarantee the development of infrastructure projects that are financed by national banks.

This statement was made by the Coordinating Minister for the Economy Boediono.

The guarantee is being given to prevent the banking sector from worrying about the risks involved in loan disbursements to these projects.

The projects that will be guaranteed include those involving public interests and are seriously required for supporting macro economic growth.

However, Boediono was still reluctant to explaining examples of the projects.

“We'll be very selective over the projects that will be guaranteed,” he said last week in his office.

On a different occasion, Bank Indonesia stated it will not loosen its policy on the maximum lending disbursement limit (BMPK) even if loans are used for financing infrastructure projects.

The central bank still limits loan disbursement at 30 percent maximally.

In issuing the policy, said Bank Indonesia Governor Burhanuddin Abdullah, the central bank must refer to international regulation.

As a result, all policies will adopt international standards.

However, he said that the regulation was still flexible, in addition to infrastructure development that state-owned enterprises carried out.

“We will be more flexible,” he said without explaining further.

ANTON APRIANTO | SURYANI IKA SARI

Indonesia – Iran Fertilizer Factory to be Built by End of Year

Monday, 19 February, 2007 | 15:08 WIB

TEMPO Interactive, Jakarta: The government has confirmed that the construction of joint venture fertilizer factory in Iran by both Indonesia and Iran will be carried out by the end of 2007.

This was conveyed by Fahmi Idris, Industry Minister, after the signing of a Memorandum of Understanding (MoU) between PT Pupuk Sriwidjaja and National Petrochemical, Iran, last weekend in Jakarta.

Fahmi said that after the MoU finalization, it is expected that the factory construction can be realized soon.

“It is hoped that the project can be implemented by the end of the year,” he said.

Fahmi went on to say that the MoU between the governments had been signed in November, 2006.

The fertilizer factory will be built in Iran with fifty percent ownership belonging to each country.

The plan to build the fertilizer factory is based on the limitations of domestic gas supplies.

In Iran, said Fahmi, gas supplies are abundant and the price is far cheaper.

“The gas price in Iran is US$1 per mmBtu, here (Indonesia) fertilizer factories buy gas for US$4 per mmBtu,” he said.

The fertilizer factory, said Fahmi, will produce 990,000 tons of ammonia per year, with ammonia producing around 1.15 million tons of ures-based fertilizer.

He explained Iran will sell its gas at a price of US$1 for ten years to the joint fertilizer factory.

The source of funds to build the fertilizer factory in Iran, according to Fahmi, was the government’s capital investment and Pupuk Sriwidjaja’s internal funds.

“The amount (for 50 percent ownership) hasn’t been final yet, but it’s between US$200 million and US$250 million,” he said.

Dadag Heru Kodri, Pupuk Sriwidjaja’s Managing Director, said that the second point of the MoU iwa that each owner’s obligation is 50 percent.

According to him, in the MoU, his side had asked for the gas price to be US$1 with 10 years guarantee and 20 years of supply.

Alwi Shihab, the President’s special envoy for the Middle East, said that there are a number of financing organizations that support fertilizer factories.

“Among these is the Islamic Development Bank,” he said.

RR ARIYANI

Singapore's Sembcorp Marine wins US$80 mln contract in Indonesia

Singapore (ANTARA News) - Sembcorp Marine said has won an 80 mln usd contract to build two offshore platforms for TOTAL E&P Indonesie.

It secured the contract through its unit SMOE Pte Ltd's subsidiary PT SMOE Indonesia.

"PT SMOE Indonesia will undertake engineering, procurement, construction, transportation, installation, hook up and commissioning for a manifold and a compression platform to be installed in Indonesia's Tunu Field, which is located on the East of Kalimantan," Sembcorp Marine told XFN Asia.

The platforms are expected to be completed by the first quarter of 2009.

The contract is not expected to have any material impact on Sembcorp Marine's financial performance this year, the company said.

Nutricia extends tender offer for Indonesia's Sari Husada

Jakarta (ANTARA News) - Dutch firm Nutricia International BV will extend a tender offer to buy shares of Indonesian health food maker PT Sari Husada it does not already own from minority shareholders by one month or until March 20.

Nutricia owns 93.52 pct of Sari Husada.

The minority shareholders hold a combined 1.33 pct stake in Sari Husada.

The remainder is comprised of treasury stock owned by Sari Husada founders.

Sari Husada said that in the first tender offer period that ended yesterday, Nutricia has bought 22.22 mln shares or about 85 pct of the shares held by the minority shareholders.

Foreign firms eye RI greenhouse projects

Adianto P. Simamora, The Jakarta Post, Jakarta

Many foreign investors are considering becoming involved in developing greenhouse gas emission reduction projects here in Indonesia as a result of the country's huge potential, an official says.

Prasetyadi Utomo, the secretary to Indonesia's Designated National Authority (DNA), a unit of the State Ministry for the Environment, predicts that there will be at least 10 projects under the Clean Development Mechanism (CDM) submitted by local companies for approval by the government this year.

Under the Kyoto Protocol, which Indonesia has ratified, gas emission reduction projects have to be approved by the United Nations. Project developers are entitled to receive certified emission reductions (CER) from the UN, which can later be used by developed nations to meet their Kyoto protocol targets for reducing gas emissions.

A CER unit stating a one-ton reduction in carbon dioxide is estimated to be worth between US$7 and $8.

"We are in the final stages of approving four CDM projects," Prasetyadi Utomo, the secretary of Indonesia's Designated National Authority (DNA) on CDM at the state ministry told The Jakarta Post on Wednesday.

The DNA, which was set up in 2005, is tasked with approving such projects before submitting them to the UN's Executive Board.

The four projects consist of a mini-hydro scheme, the use of coconut shells to generate electricity, limiting the use of nitrous oxide in the manufacturing of explosives, and methane extraction during tapioca-starch production.

Prasetyadi said that the mini-hydro project consisted of four small-scale power generating plants in Central Java and West Java, and would be developed by PT Indonesia Power in partnership with Japan-based Chugoku Electric Power Co. Inc.

"The project is expected to generate up to 21,139 tons of carbon reductions per year," Prasetyadi explained.

He said that so far, eight Indonesian CDM projects had been registered with the UN Executive Board. The eight projects could produce emission reductions of up to 1.5 million tons per year.

"Many of the project promoters are from Japan. We hope that more investors from the European nations will locate CDM projects in Indonesia this year," he said.

A statement from the British Embassy in Jakarta said that a delegation of 12 British investors would meet Indonesian CDM project developers during a two-day visit starting Thursday.

"The range of services available from the UK climate change companies is extensive and includes CDM project development and financing, carbon fund management, technology provision, carbon brokerage services, validation and verification, and legal services," the statement said.

The Kyoto Protocol requires developed nations to cut greenhouse gas emissions by 8 percent below 1990 levels in the period between 2008 and 2012.

By contrast, developing countries can host projects to reduce the gases. Indonesia, which ratified the protocol, is not required to reduce its emissions and thus is a potential host country.

The state ministry said that Indonesia had the potential to supply two percent of the global CDM market, or the equivalent of a 125-million-ton reduction in carbon dioxide.

It said that the energy and industrial sectors produced the largest share -- up to 60 percent -- of total emissions in Indonesia.

Fossil and coal-based fuels are believed to be the main causes of greenhouse gas emissions that lead to global climate change.

ADB Funds Water Quality Study in West Tarum Canal

ADB - 15 February 2007 - In response to Jakarta's serious water problems, ADB is funding a study on water quality in the West Tarum canal, which provides 80% of the capital city's freshwater supply.

Read the full story

Barrick Gold Seeks New Mines in Indonesia, Papua New Guinea

By Tan Hwee Ann

Feb. 14 (Bloomberg) -- Barrick Gold Corp., the world's largest gold miner, is seeking new mines in Indonesia, Papua New Guinea and Australia as it looks to add to its Asian production.

Countries in the so-called `Ring of Fire' region, including Indonesia and Papua New Guinea are ``very prospective,'' Joc O'Rourke, president of Barrick Australia Pacific, said today in an interview in Perth.

Barrick last March bought Placer Dome Inc. to become the largest gold miner. The Toronto-based company been seeking to add to its mines in Australia, South Africa, Tanzania and Nevada as prices of bullion more than doubled in the past five years

``There are some fantastic minerals resources in Papua New Guinea and Indonesia, and the Philippines has some,'' said O'Rourke. There's a also a ``big opportunity,'' in South Australia where some early discoveries suggest similar geology to the BHP Billiton Ltd.'s Olympic Dam mine, he said.

The Olympic Dam mine in South Australia has the world's sixth-largest copper and tenth-largest gold deposits, according to BHP Billiton, the world's largest mining company.

Barrick last November signed an agreement with Integra Mining Ltd., allowing it to take an 80 percent stake in the Oodnadatta gold and copper project in South Australia for A$3 million ($2 million).

Labor cost increases in Australia have slowed, said O'Rourke. The rate of turnover at Barrick ``peaked early last year, and is slightly down now,'' he said. Labor costs have surged in Australia as miners compete with each other to expand projects.

To contact the reporter on this story: Tan Hwee Ann in Perth at hatan@bloomberg.net

US offers sweet deal to help Indonesia produce more cocoa

Jakarta (ANTARA News) - The United States on Wednesday announced a training programme to help Indonesian farmers battle cocoa bean-eating pests and boost exports to one of America's largest chocolate manufacturers.

Indonesia is the world's third largest cocoa producer, after Ivory Coast and Ghana.

The US Agency for International Development has facilitated an agreement between Blommer Chocolate Co. and supplier PT Olam Indonesia to train farmers on Sulawesi island to improve productivity and tackle the cocoa pod borer, the US embassy was quoted by AFP as saying in a statement.

The moth-like pest lays its larvae in cocoa pods, reducing yields by up to 60 percent and leaving the farmer with a poor quality crop.

Sulawesi's farmers lost 127 million dollars last year due to the ravages of the pest, the embassy said.

The training programme would also help them to improve productivity and quality by 30 percent, enabling them to increase production by 35,000 tonnes a year, it said.

Blommer has agreed to buy premium quality beans at above market value.

The US imported 136,000 tonnes of cocoa from Indonesia in 2005, with American chocolate manufacturers buying about 40 percent of Sulawesi's cocoa butter exports, the embassy said.

Antam, BHP form alliance to develop Halmahera nickel deposits

Jakarta (ANTARA News) - Publicly-listed mining company PT Antam Tbk announced on Tuesday it has signed a heads of agreement establishing an alliance with BHP Billiton to explore the joint development of an extensive nickel laterite resource on the eastern Indonesian island of Halmahera.

The heads of agreement was signed in Perth, Australia, during the Asia Pacific Economic Conference by Antam`s President Director, D. Aditya Sumanagara and BHP Billiton Stainless Steel Materials President, Jimmy Wilson.

The alliance will investigate development of pyrometallurgical and hydrometallurgical processing routes for the Buli deposit on the island and other ore bodies, it said.

This move is in line with Antam`s strategy to move into higher technology and downstream metals processing activities. This strategic alliance with BHP Billiton is also expected to mitigate the cost and risk of developing mineral deposits.

"Mining and metals processing is a capital intensive, long term business. With this move, which is still many years away, we hope to ensure our future competitiveness in the nickel sector. The alliance would immediately commence a project study to develop hydrometallurgical and pyrometallurgical processing technologies on Halmahera Island," Sumanagara said.

The project study represented a significant opportunity to jointly develop a world class nickel resource with considerable long term benefits to Indonesia.

Through the alliance study, Antam and BHP Billiton are committed to achieving leading mining industry best standards in safety, environmental and community practice.

The project study phase will provide employment and support local businesses.

Following the signing, Antam and BHP Billiton will move towards the formation of a joint venture company for the alliance. Antam and BHP Billiton expect the joint venture agreement will be completed by end of 2007.

Indonesia gets US$92.8 mln World Bank loan for farmer empowerment

Jakarta (ANTARA News) - The World Bank said its board has approved a combined 92.8 mln usd loan package to support a farmer empowerment project in Indonesia.

The project aims to help 400,000 Indonesian farm households improve productivity and incomes over the next five years, it said.

Total project cost is 123 mln usd, with Indonesia providing the balance of funding, the World bank was quoted by XFN Asia as saying.

Total project cost is 123 mln usd, with Indonesia providing the balance of funding, it said.

World Bank country director Andrew Steer said the project will support development of a market-oriented agricultural services system based on partnerships among farmers' groups, public agencies and private sector enterprises.

He added that improving agricultural productivity remains perhaps the best single measure to reduce poverty in Indonesia, with almost two-thirds of the nation's poor consisting of farmers.

Indonesia's poverty rate as a percentage of the total population stood at 17.75 pct as of March 2006, with some 39 mln people living below the poverty line, the World Bank said.

Indonesia's BSP to build four more CPO processing plants

Jakarta (ANTARA News/Asia Pulse) - Publicly listed plantation company PT Bakrie Sumatera Plantations (BSP) (JSX:UNSP) said it plans to build four more crude palm oil processing plants in Sumatra at a total estimated cost of US$22 million, BSP Development Director M. Iqbal Zainuddin said.

Currently BSP has two CPO processing plants in Jambi and West Sumatra to process fruits from its plantations.

The company produces 150,000 tons of CPO annually.

Petrogres eyes chance to set up organic fertilizer firms outside Java

Surabaya, East Java (ANTARA News) - Fertilizer manufacturer PT Petrokimia Gresik (Petrogres) has been studying a plan to set up organic fertilizer factories in some areas outside Java, a spokesperson has said.

The high demand for organic fertilizer outside Java has encouraged PT Petrogres to have the plan, Petrogres director Arifin Tasrif said here.

"Before realizing the plan we should study some aspects including raw materials for organic fertilizer. Lampung province seems to be a right place to set up the organic fertilizer factory as it has enough raw materials," he said.

Raw materials for organic fertilizer are manure and sugarcane wastes, he said, adding that an organic fertilizer factory needs an investment value of Rp1 billion to produce 10 tons of organic fertilizer per day.

Until now, he said, Petrogres has already set up 20 organic fertilizer firms dubbed Petroganik in 20 districts in East Java.

Arifin said eight of the Petroganic firms have already operated commercially while the 12 others are under an equipment fabrication process.

"We hope we could set up 30 other Petroganic firms in East Java this year as both investors and farmers are really demanding for more organic fertilizer firms and organic fertilizer price is far lower than that of the chemical one," he said.

Organic fertilizer is sold at Rp1,400-Rp1,500 per kg while inorganic one at Rp2,500 per kg.

Meanwhile, in an inauguration of five Petroganik firms in East Java`s district of Magetan, Agriculture Minister Anton Apriyantono said the government planned to make the use of organic fertilizer to the utmost to reduce the dependence on chemical fertilizer.

Anton, however, did not say whether or not the government would subsidize the making of organic fertilizer as it had done for the inorganic fertilizer production.

Loan 2285-INO (SF): Sustainable Aquaculture Development for Food Security and Poverty Reduction (ADB)

Request for Expressions of Interest (EOI) - Invitation for Shortlisting for Consulting Services

Asian Development Bank

The Government of Indonesia invites reputable consultant firms from ADB's member countries, in association with qualified national consultant, to provide consulting services for Project Management Consultant (PMC) for Project Management Office (PMO) and Project Implementation Unit's (PIU) for the Sustainable Aquaculture Development for Food Security and Poverty Reduction Project (SAFVER), funded by Asian Development Bank under Loan No.2285-INO (SF).

SAFVER supports the government's program to promote sustainable and community-managed freshwater, brackishwater, and marine aquaculture development to benefit poor fish-farming communities. SAFVER will be implemented in five districts in four provinces:

1. Langkat in North Sumatera;
2. OKI in South Sumatera;
3. Karawang and Sumedang in West Java; and
4. Buton in South East Sulawesi.

Read more about the project

Chemical manufacturer gets loan from Japanese firms

Jakarta (ANTARA News) - Indonesia`s chemical manufacturing company PT Budi Acid Jaya has secured a US$3.5 million loan from Japan`s Nedo Fund and Sumitomo Mitsui Banking Corporation, a spokesperson said here Friday.

The fund will be used for development of a biogas-fueled power plant, PT Budi Acid Jaya President Director Santoso Winata told the Jakarta Stock Exchange.

The loan carries an interest rate of 2 percent, higher than that of Sumitomo Mitsui Banking, he said.

The loan with a period of grace until 2012 will be repaid after the power plant has been fully operational, he said.

Budi Acid Jaya`s core businesses are manufacturing and selling tapioca starch, citric acid and other chemicals, monosodium glutamate, plastic bags, glucose and modified tapioca starch.

The tapioca starch is marketed under the Red Mountain and Green Mountain brand names. The group`s factories are located in Subang, Lampung and Jambi with their products sold at home and abroad.

The business group was set up on January 15, 1979 under the name of PT North Aspac Chemical Industrial Company.

Govt to hold first tender for CBM gas

Ika Krismantari / The Jakarta Post - 2007-02-09 11:14

Jakarta, February 9, 2007 (The Jakarta Post) - The government will hold its first-ever tender for the exploration and production of coal-bed methane (CBM) gas in March to meet the growing demand for gas for both local use and exports.

The Energy and Mineral Resources Ministry's director of upstream oil and gas development, R. Priyono, said Thursday that the government would put on the table concessions in two areas that are believed to hold the biggest deposits of CBM — one in Sumatra that is estimated to hold 183 trillion cubic feet (tcf) and the other in Barito, South Kalimantan, estimated to contain 101.60 tcf.

The tenders would be conducted on a direct offer basis. "Currently, there are six investors interested in bidding," Priyono said, adding that among them were state oil and gas firm Pertamina and Australian oil and gas company Santos.

He said that the government was in the process of resolving all matters associated with the tenders, including arranging much-needed incentives to overcome the high cost of exploiting CBM deposits.

"We are also considering how to overcome potential conflicts with coal miners," he said.

CBM is a natural gas formed by the activity of microbes during the coal-forming process, which then becomes trapped amid coal beds.

Indonesia has total estimated CBM deposits of 453 tcf, or about 81.5 billion barrels of oil equivalent, which are the world's second largest after China.

However, many investors have expressed doubts about putting their money into CBM as the government has yet to issue the necessary regulations or give details of the promised incentives.

Upstream Oil and Gas Executive Agency (BP Migas) chairman Kardaya Warnika said last month that the government was considering offering a split of 70 percent to 30 percent in favor of the investor.

This would be much more favorable than the split in the case of regular gas production, which is 35 percent for the investor and 65 percent for the government.

Under its blueprint for the development of CBM, the government is targeting the production of 1 billion standard cubic feet per day (bcf), or about 0.18 million barrels of oil equivalent, by 2025.

Bakrie Telkom to invest Rp 2t on expansion

The Jakarta Post - 2007-02-09 11:24:48

Jakarta, February 9, 2007 - PT Bakrie Telecom Tbk (BTEL), a business unit of Bakrie Brothers, will allocate Rp 2 trillion (about US$222 million) in capital expenditure to finance the company's expansion this year.

"The money will be raised from financial institutions and internal sources," the company's president director, Anindya N. Bakrie, said following a shareholders meeting Thursday.

Anindya said that the new investment funds would be used to double the number of the company's Base Transceiver Stations (BTS) to 800 BTS from 400 BTS at present.

He added that the company would expand its services to 17 more cities, including Surabaya, Medan, Semarang and Yogyakarta this year, in addition to its existing 15 coverage areas in Jakarta, West Java and Banten.

"We plan to increase the number of subscribers to 3.6 million this year," he said, adding that in 2006 the company signed up 1.5 million subscribers, more than the targeted 1.3 million.

He said the company now held an 1& percent share of the market in Jakarta, West Java and Banten.

As of November 2006, the telecommunication unit of Bakrie Brothers has earned Rp 704 billion in revenue, a 131 percent increase from the same period last year.

President director of PT Bakrie Brothers, Bobby Gafur Umar, said that he expected BTEL would contribute 30 percent of the widely diversified business group's total revenues within the next two or three years from 16 percent last year," he said.

German Aid of Rp20 Billion for Solo

Thursday, 08 February, 2007 | 17:09 WIB

TEMPO Interactive, Solo: The municipal government of Solo, Central Java, is to receive aid amounting to Rp20 billion from the Germany Institute.

This organization of German donor representatives for Indonesia will provide equipment and machinery for the Solo Techno Park that is currently being prepared by the municipal government.

“The grant will be handed over in two stages. This year, equipment and machinery for automotives and garments will be provided. The remainder will be given next year,” said Masrinhadi, the Solo City Head of the Industry, Trade and Investment Service, this afternoon (8/2).

The 28-hectare Solo Techno Park is an integrated area for industrial, trade and service activities, and also contains educational facilities.

Solo Techno Park is designed to produce around 2,000 automotive experts and 15,000 garment graduates who will be ready to work.

Even though it has not yet been realized, the Solo Municipal Government is generating cooperation with many parties, such as automotive entrepreneurs and the Indonesian Textile Association (API).

The Indonesian Oil and Gas Association is even interested to train experts in drilling.

Imron Rosyid

Indonesian-Malaysian team to bid for Jakarta toll road project

Jakarta (ANTARA News/Asia Pulse) - State-owned toll road building company PT Jasa Marga said it will team up with PT Astratel and Malaysia's Cahaya Mata Serawak Bhd in a tender for the construction of a toll road in Jakarta.

Jasa Marga is eyeing the projects of Serpong-Kunciran and the Kunciran-Cengkareng sections of the Jakarta Outer Ring Road, expected to cost around Rp4.4 trillion (US$488.8 million).

Jasa Maga president Frans Satyaki Sunito said Jasa Marga wants to maintain a majority share in the consortium with the two partners.

More foreign aid pours flood victims

JAKARTA (Agencies): More foreign countries have expressed their commitments to help flood victims in the capital and its surrounding, whose houses and properties have been inundated since last Friday.

The Dutch government said it is sending US$1.3 million to Indonesia to help bring relief to millions of people hit by deadly flooding in the capital, Jakarta.

Overseas Development Aid Minister Agnes van Ardenne said half the money would be used to buy food, medicine, clothes and blankets for victims. The other half would buy rubber boats to ferry them around the inundated city."As good friends, it goes without saying that we would help Indonesia now that 75 percent of Jakarta is underwater," Van Ardenne was quoted by AP news agency as saying.

Meanwhile, the European Union said Tuesday it would give US$777,300 to help flood victims in Jakarta.

The U.S. Australia, and Japan have previously also expressed their commitments to help flood victims.

RI signs deal with Baxter to produce bird flu vaccine

JAKARTA (AP): Indonesia, the country hardest hit by bird flu,signed a preliminary deal Wednesday with U.S. drug manufacturer Baxter Healthcare Corp. to jointly produce a human bird flu vaccine.

Under the memorandum of understanding, Indonesia will provide strains of the H5N1 virus circulating in the nation and Baxter will offer technical expertise to produce the vaccine, said Indonesia's Health Minister Siti Fadilah Supari.

The deal did not give a date when production would start.

Govt to hold tender for home solar-power units

JAKARTA (JP):The government, pressing ahead with its program to electrify underdeveloped regions across the nation, will next month hold a tender for the procurement of 30,000 home solar-power units.

One home solar unit can generate between 50 and 80 watts of electricity.

J. Purwono, director general for electricity and energy use at the Energy and Mineral Resources Ministry, said Tuesday that the government had allocated Rp 247 billion (US$27.4 million) for the project.

"We have opted for solar energy as it will be cheaper than building power plants," Purwono said. "With an estimated price of Rp 8 million for each unit, it will definitely be much more economical."

Currently, out of Indonesia's total population of 260 million, about 100 million people living outside Java and Bali islands do not have access to electricity.

Based on 2006 figures, state electricity firm PT Perusahaan Listrik Negara (PLN) can only light up 54 percent of Indonesia's villages given that its power plants have a total generating capacity of only 25,000 megawatts.

The solar-power program, to be jointly run by the Energy Ministry and State Ministry for Disadvantaged Regions, aims to provide 30,000 solar units with capacities ranging from 50 watts to 80 watts per unit.(ika)

Indonesia's largest biodiesel plant to come on stream in May

Jakarta (ANTARA News/Asia Pulse) - PT Bukit Kapur Reksa, a subsidiary of Wilmar Energy, is building the country's largest biodiesel factory in the Pelintung Industrial Estate in Dumai, in Riau.

The factory will need one million tons of crude palm oil (CPO) as raw material, an official of the Riau Plantation Office said.

He said construction of the factory started in December 2006 and was expected to be completed and start operation in May this year.

Govt lifts VAT from primary products

The Jakarta Post, Jakarta

In order to boost the farm sector, the government has lifted value-added tax (VAT) on a variety of goods and commodities, including agricultural machinery and primary agricultural products.

Under a new government regulation, there are six categories of goods that will be exempted from VAT.

These include capital goods, such as engines, factory machines and machine tools, both in knocked-down or built-up form, and feeds and feed ingredients for livestock, fowl and farmed fish.

Also exempted from VAT are farm produce, seeds for agriculture and market gardening, fish and livestock seed, clean water distributed through pipes, and electricity, except for domestic use, where the power supply is higher than 6,600 watts.

The new regulation provides that agricultural produce, including that produced by enterprises operating in the agricultural, market-gardening and forestry sectors, will also be exempted form VAT.

Sumitomo Corp wins 14 bln yen georthermal order in Indonesia

Jakarta (ANTARA News) - Sumitomo Corp has received a 14 bln yen order to expand a geothermal power generation facility in Indonesia, the Nikkei reported, without citing sources.

The order entails delivery of equipment made by Fuji Electric Systems Co with an output capacity of 117,000 kilowatts, the business daily said.

Local power company Star Energy Holdings Ltd is overseeing the expansion at the Wayang Windu geothermal plant in West Java, with major construction firm PT Rekayasa Industri handling the steam-related systems, it said.

Panorama to build apartments in Bali

JAKARTA: Tourism business the Panorama Leisure Group is planning to build a boutique hotel and apartment complex in Seminyak, Bali in what the management says is a vote of confidence in the island's tourism prospects.

Panorama management said in a statement that it would build the complex, the Haven Villa and Apartments, in the second quarter of 2007, with operations expected to commence at the end of 2008.

To date, the complex, which consists of seven villas and 60 apartments units, has been well-received, with the villas all having been sold out.

The management is now therefore focusing on selling the apartment units, at a price averaging at US$200,000 for a one-bedroom apartment and $340,000 to $380,000 for a two-bedroom apartment.

To attract more buyers, the group is offering a 6 percent guaranteed rental return per annum for the first three years of operation.

U.S., Australia express commitments to help flood victims

JAKARTA (JP): Several countries including the U.S. and Australia have expressed their commitments to convey assistance for hundreds of thousands of flood victims, whose houses in Jakarta and its surroundings, have been inundated since last Friday.

The U.S. government will provide US$100,000 of emergency relief assistance for displaced people, according to a press release from the U.S. embassy in Jakarta Monday.

The embassy said that the assistance will be channeled through the International Federation of Red Cross (IFRC) and its local partner -- the Indonesian Red Cross--, CARE, Mercy Corps, and World Vision.

Meanwhile, the Australian embassy in Jakarta also said that his country will also provide 150,000 Australian dollar (US$116,243) to support the Indonesian government to help flood victims.

Australian Ambassador to Indonesia Bill Farmer said in his statement that the assistance include 5,000 food packages and 5,000 hygienic stuffs.
At least 25 people have been killed, with some 340,000 others forced from their homes, most staying in mosques, schools or with friends. Electricity and water supplies were cut in many districts, and floods blocked off scores of roads.

Govt. invites investors to build wholesale markets in three cities

JAKARTA (Antara): The government is inviting domestic investors to develop wholesale markets in Makassar, Surabaya and Jakarta, a Trade Ministry official said.

The wholesale markets would be built near seaports in the country's three major cities to facilitate interinsular trade, the ministry's director general of domestic trade, Ardiansyah Parman, said on Friday.

At present Jakarta has a vegetable and fruit wholesale market.

But Ardiansyah said the capital city needed another wholesale market specializing in rice.
Based on the results of a study, the frequency of rice shipped via the Sukarno-Hatta port (Makassar), Tanjung Priok port (Jakarta) and Tanjung Perak (Surabaya) for interinsular trade was high, he said.

SK Engineering wins US$150 mln order for lubricant plant in Indonesia

Yonhap News - 2007-02-01 11:27

SEOUL, Feb. 1, 2007 (Yonhap) -- SK Engineering & Construction Co., a South Korean construction company, said Thursday it has won a US$150 million order to build a lubricating-oil plant in Indonesia.

The contract also calls for SK Engineering to upgrade a Dumai refining plant in the Sumatran province of Indonesia over the next 26 months, the Korean company said in a regulatory filing.

Indonesia's RNI to build more ethanol factories

Reuters, Yahoo Finance - 2007-02-01 11:42:35

JAKARTA, Wed Jan 31, 2007 (Reuters) - Indonesian state-owned trading firm PT Rajawali Nusantara Indonesia (RNI) said on Wednesday it plans to build two ethanol factories with a total capacity of 200,000 litres a day to tap growing demand.

The company will build one ethanol factory in Cirebon, Central Java, and another in Malang in East Java, each with a capacity of 100,000 litres a day, said Son Ramadir, RNI's development director.

The project will cost $40 million and the factories are expected to be completed between 2008 and 2009.

"We are developing a new strategy in the downstream industry including in renewable energy to improve competitiveness," Ramadir told reporters.

"The potential is huge with the surging "The potential is huge with the surging crude oil prices and declining crude oil reserves in the country," he said.

Previously, the company had also planned to build an ethanol factory in Subang, West Java, with output capacity of 100,000 litres per day and is expected to complete construction in 2008.

RNI's move reflects growing interest in biofuel production in Indonesia as authorities are encouraging alternative sources of energy to cut fuel subsidies, inflated by soaring crude oil prices.

RNI joins several Indonesian companies that have announced plans to build green fuel plants, mostly palm-oil based biodiesel, including PT Asian Agri and PT Bakrie Sumatra Plantations

The country's vast land resources and cheap labour have also attracted several foreign companies to enter the Indonesian biofuel industry, including Golden Hope Plantations, Genting Bhd and Sime Darby Bhd and Wilmar Holding Pte. Ltd.

The most recent investment plan was from Chinese oil major CNOOC in early January which announced plans to join palm oil producer PT Smart Tbk and a Hong Kong energy firm to invest $5.5 billion in producing biofuel in Indonesia.

Ramadir said the company will use sugar-cane molasses from its own plantations for production of ethanol.

Ethanol, used as an alternative motor fuel or fuel additive, is produced from cane molasses -- a thick syrup produced from sugar cane during the sugar extraction process.

The company owns 11 sugar mills, producing 325,218 tonnes white sugar in 2006. ($1=9,090 rupiah)

Govt to go guarantor for infrastructure projects

Ary Hermawan, The Jakarta Post, Jakarta

The government will issue guarantees to domestic banks to help encourage more bank lending to finance infrastructure projects and armaments procurements, a minister has said.

"We must provide them with letters of guarantee. After all, we also provide such guarantees when taking out foreign loans," State Minister for National Development Planning Paskah Suzetta said Wednesday.

Meanwhile, Coordinating Minister for the Economy Boediono said the guarantees, to be issued in respect of multi-year infrastructure projects, would provide greater certainty and instill more confidence in the banks when considering whether to extend loans.

Paskah said his ministry would arrange a meeting with the country's banks soon to discuss the issue.

"Some of them have individually agreed to finance the defense industry, including procurements from firms such as PT Dirgantara Indonesia, PT PAL and PT PINDAD," he said.

Paskah said his ministry had received applications to take out foreign loans from government departments and local governments so far this year worth a total of US$40 billion to finance development projects.

Paskah added that his ministry was currently deciding which of the proposed projects could actually be financed from local sources.

"We will be very prudent in assessing the projects," he said, stressing that the government would prioritize local financing and optimize budget spending before turning to overseas borrowing.

He explained that the government's guarantees would provide assurance to banks in disbursing loans so that they would not have to worry unduly about breaching legal lending limits (LLL).

After dissolving Indonesia's main grouping of creditors and donors, the Consultative Group on Indonesia (CGI), last week, the government has pledged to rely more on its own resources to fund the country's development.

Paskah said the government hoped to further lower its debt to GDP ratio, which stood at 42 percent last year.

"We will try to reduce the number of new (foreign) loans taken out," he said.

Both sides of Suramadu bridge set for SEZs

Ary Hermawan, The Jakarta Post, Jakarta

The government plans to set up special economic zones (SEZ) in the areas to be linked by the Surabaya-Madura bridge, with the zones expected to cover some 600 hectares in total.

The SEZs on both sides of the bridge will be established upon the completion of the bridge, which is scheduled for 2008, according to National Development Planning Minister Paskah Suzetta.

"The bridge must be turned into more than just a link between Surabaya and Madura. We must also improve economic conditions in the surrounding areas," Paskah said Wednesday.

Accordingly, Paskah said the government had decided to set up a special agency to speed up the bridge's construction, and to prepare blueprints for the development of the proposed economic zones.

"The agency will focus primarily on land acquisition and the construction of infrastructure, including ports and residential areas to support the zones," he said, adding that the new agency would be headed by Coordinating Minister for the Economy Boediono and include local government officials as members.

Subsequently, Paskah said, the government would invite private firms to submit bids to run the zones as part of a public-private partnership.

"All companies. foreign and domestic, will be invited to invest in and develop the zones," he said.

Better known by its Indonesian acronym as the Suramadu bridge, the new link, which is still under construction, will connect Surabaya on the island of Java and Bangkalan on the island of Madura. It will be the longest bridge in the country at 5.4 kilometers in length.

China has provided US$400 million for the project, while the government has allocated Rp 1.4 trillion (Rp 147.3 million) from the 2007 and 2008 budgets.

Batam, Bintan and Karimun islands in Riau Islands province made up the first SEZ in the country. It has been deemed a success by the government, which now plans to create similar zones in other provinces.

In addition to the proposed SEZs in East Java, the government has said it will establish other ones in North Sumatra, South Sulawesi and Bojonegara in Banten, where a Rp 7 trillion international port is under construction.

The Coordinating Ministry for the Economy is currently preparing a government regulation in lieu of law as a legal basis in the hope that this will save time and accelerate the establishment of more investment-boosting SEZs around the country.

Issues pertaining to the SEZs will also be covered by the proposed new taxation and customs laws.