Thursday, March 19, 2009

Indonesia Business & Trade updates

21 Reports:
(courtesy Joyo News Service)
- JP: RI To Get $1b Standby Loan
- Indonesia To Allow Private Cos To Export High-Quality Rice
- Indonesia To Export 100,000 Tons Of Rice This Year
- Indonesia Targets 2 Trln Rph In Debt Auction
- JG: Foreign Reserves to Fall on Corporate Debt Roll-Over Fears, BI Says
- Indonesia's Adira Finance To Offer IDR500 Bln Bonds Late April
- Indonesia's WOM Finance Secures $454 Mln In Loan Pledge
- United Tractors’ Komatsu Sales Fell 39 Percent in February
- Indonesia's Apexindo To Issue Bonds Valued At $90 Mln
- Investors To Spend $3 Bln On Indonesian HTI Projects
- Indonesia's Pelindo IV To Spend $40 Mln On Container Terminal
- Indonesia's Kimia Farma Chalks Up 10.5pct Rise In Net Profit
- Indonesian Agency Bulog's Sugar Sales Reach 100 Pct
- Indonesian Pvt Airline Lion Air To Scrap MD-80 This Year
- Indonesian Govt Verifying Industries Eligible For Fiscal Incentive
- Indonesia's Bank Mandiri Provides $1.94 Bln For Small Biz
- Indonesian Bank Loan Interest Rates Fall Further: Banker
- Indonesian Excise On Tobacco Products Second Lowest Worldwide
- Dark Times In Taxation Sector Now Over, Indonesian Pres Says
- Canadian Envoy Leads Business Delegation To N Sumatra
- Indonesia's Export Growth To Drop Below Zero Pct: Observer
The Jakarta Post [website] March 19, 2009
RI To Get $1b Standby Loan
The Jakarta Post, Jakarta
The Indonesian government is in finalizing an agreement to get a US$1 billion (Rp 12 trillion) standby loan from the Islamic Development Bank (IDB) and the Franch government to help it weather the storm of the global financial crisis. Hartadi A. Sarwono, deputy governor of Bank Indonesia (BI), said that his office was negotiating the agreement in which Indonesia is expecting to receive $500 million from the IDB and $500 million from the French government. “Prior to the agreement, the government received $5.5 billion,” he He said that the country's deficit reserves would likely to go
down from $51.63 billion to $48.79 billion by the end of the year due to the decreasing value of the Rupiah. “BI will continue its effort to keep our currency stabile. Thus far, our reserves, which currently stand at $53.7 billion, are enough to keep the rupiahs value on the market,” he said.
Indonesia To Allow Private Cos To Export High-Quality Rice
JAKARTA, March 19 (Dow Jones)--Indonesia will allow private rice exporters to join Bulog, the national procurement agency and previously the only agency allowed to export the commodity, in exporting high-quality rice come April, a senior government official said Thursday. Private rice exporters can apply to export up to a total of 100,000 metric tons of high-quality rice from April to June, which coincides with Indonesia's rice harvest season, said Bayu Krisnamurthi, deputy to the Coordinating Minister for the Economy. Critics had said allowing a single government agency like Bulog to export rice may lessen opportunities for farmers to receive competitive prices for their rice. Krisnamurthi said the rice exports will be restricted to three ports in Jakarta, Surabaya and Makassar.
No reason was given for the restriction, but Indonesia usually restricts imports and exports of important goods to certain ports to curb smuggling. Bulog chief Mustafa Abubakar said seven companies have so far applied to export the rice.
Indonesia To Export 100,000 Tons Of Rice This Year
JAKARTA, March 19 Asia Pulse - The Indonesian government has finally decided to allow 100,000 tons of rice to be exported this year, the country's first export of that staple food in
several years.
Indonesia , a jor importer of that commodity a few years earlier, began to have surplus after achieving self sufficiency last year. President of the state Board of Logistics (Bulog) Mustafa Abubakar said exports would be made after the grand harvest in March-April this year. Bulog has proposed to export 226,000 tons but the government decided to exports only 100,000 tons or 0.3 per cent of the country's estimated production of 40 million tons this year, Mustafa said. Bayu Krisnamurti, a deputy of the chief economic minister, said
private companies are also allowed to export rice.
Indonesia Targets 2 Trln Rph In Debt Auction
JAKARTA, March 19 (Reuters) - Indonesia's finance ministry said on Thursday it aims to raise 2 trillion rupiah ($168.2 million) at its March 24 debt auction, part of efforts to finance its budget deficit this year. The ministry said in a statement it plans to sell one-year
treasury bills and 7-year fixed rate bonds . The government's bond sales are to finance this year's budget deficit, forecast to reach 139.5 trillion rupiah, or equivalent
to 2.5 percent of GDP. Heavy spending for infrastructure to sustain economic growth has
pushed up the government's borrowing requirement for this year, but the finance ministry has already raised about two-thirds of its gross debt issuance target for 2009. It raised a lower-than-targeted 1.85 trillion rupiah in the last debt auction on March 10, which analysts say signalled that it is less willing to pay high yields.
The central bank cut its key interest rate by 50 basis points to 7.75 percent earlier this month to spur consumer demand and bank lending to support growth in Southeast Asia's top economy, which is forecast to expand 4.5 percent this year, down from 6.1 percent in 2008. ($1 = 11,890 rupiah) (Reporting by Tyagita Silka)
The Jakarta Globe
Friday, March 20, 2009
Foreign Reserves to Fall on Corporate Debt Roll-Over Fears, BI Says
Bank Indonesia is predicting the country’s foreign exchange reserves will fall to $48.80 billion by the end of 2009 from $50.87 billion in January, and has shifted tack on the danger posed to reserves by corporate debt. The latest reserves forecast compares with an earlier central bank prediction that they would remain at about $51 billion throughout this year. The danger of international banks refusing to roll over corporate short-term foreign currency debts could drag down reserves, the bank said.
Corporations will have to repay $22.6 billion this year, Bank Indonesia Deputy Governor Hartadi Sarwono said in Jakarta on Thursday. Of that, $17.4 billion consists of short-term debts, while the balance is made up of trade financing, he said. This means that corporate debt amounts to 42 percent of the country’s foreign reserves. Hartadi said it might be difficult to roll over debt, as foreign firms were finding it difficult to get new loans. Earlier, he had said this was unlikely as much of the country’s corporate foreign debt was held by local subsidiaries of foreign corporations. Beside foreign loan repayments, other factors that would pressure reserves were slumping exports and rupiah volatility. BI has forecast the country's exports could fall by between 25 percent and 28 percent this year.
Indonesia's Adira Finance To Offer IDR500 Bln Bonds Late April
JAKARTA, March 18 (Dow Jones)--PT Adira Dinamika Multi Finance (ADMF.JK) said Thursday it plans to issue IDR500 billion of bonds from April 29 to May 1. The unit of PT Bank Danamon Indonesia (BDMN.JK) said in a prospectus it will use the proceeds as loans to motorcycle buyers. Adira said the bonds will have two- and three-year tenors, the sizes of which will be determined later. PT CIMB-GK Securities Indonesia, PT HSBC Securities Indonesia, and PT Indo Premier Securities are the co-lead arrangers for the planned issuance. Local rating agency PT Pefindo has assigned its AA- rating to the proposed bonds. Adira's net profit rose 82% in 2008, to IDR1.02 trillion from IDR460.52 billion a year earlier.
Indonesia's WOM Finance Secures $454 Mln In Loan Pledge
JAKARTA, March 19 Asia Pulse - PT Wahana Ottomitra Multiartha (WOM Finance) (JSX:WOMF) has secured a loan pledge of Rp5 trillion (US$454 million) from PT Bank Internasional Indonesia in the form of joint financing. The publicly traded financing company is also seeking loans from two other lenders PT Bank Mandiri and PT Bank Panin . WOM Finance President Suwandi Wiratno said the loan commitments allow the company not to rush to issue bonds to the market, waiting for the interest rate to decline.
Last year the company postponed plan to issue bond valued at Rp1 trillion on high interest rate, the newspaper Bisnis Indonesia said. Suwandi said the loan from BII will be disbursed by phases to meet the company's financing requirement using the prevailing
market interest rate . The company hopes to spend Rp5 trillion on financing business or
the same as last year .
United Tractors’ Komatsu Sales Fell 39 Percent in February
By Arijit Ghosh
March 19 (Bloomberg) -- PT United Tractors, Indonesia’s biggest heavy equipment seller, said sales of Komatsu Ltd.’s vehicles fell 39 percent last month. United Tractors’ sales of Komatsu vehicles in Indonesia in February dropped to 223 units, from 367 units a year earlier, the company said in an e-mailed statement today. Komatsu is the world’s second-largest maker of earthmoving equipment. Coal sales were unchanged at 4.6 million tons, the company said.
Indonesia's Apexindo To Issue Bonds Valued At $90 Mln
JAKARTA, March 19 Asia Pulse - Oil and gas drilling company PT Apexindo Pratama Duta (JSX:APEX) is considering issuing bonds valued at Rp1 trillion (US$90 million) to help finance business expansion and to repay debts. The operator of oil rigs has a total debt of Rp750 billion in bonds maturing on August 4 this year, its President Hertriono
Kartowisastro said. The company, which is 98.14% owned by Mitra Rajasa, still had
long-term contracts valued at US$594 million in oil and gas drilling, the newspaper Bisnis Indonesia said. Hertriono said that Apexindo, the shareholder of the company,
approved its delisting from the Indonesian Stock Exchange required under the stock market rule of chain listing.
Investors To Spend $3 Bln On Indonesian HTI Projects
JAKARTA, March 19 Asia Pulse - Around 24 Indonesian and foreign companies will invest Rp35.6 trillion (US$3 billion) this year to build 1.3 million hectares of industrial timber estates (HTI) in the country. PT Taiyoung Engreen and PT Inni Joa, both from South Korea and PT Selarasd Inti Semesta already secured the license. Taiyoung has a concession of 59,981 hectares in Central Kalimantan, PT Inni Joa 28,721 hectares in South Kalimantan and PT Selaras 259,475 hectares in Papua. Other 21 companies have so far been given only the principle approval, the newspaper Investor Daily said.
Director of plantation forests Bejo Santoso said the HTI projects will open 1,769 jobs not including 14,176 for daily paid workers. This year the government targets to build 5 million hectares of HTI by the end of this year.
Indonesia's Pelindo IV To Spend $40 Mln On Container Terminal
JAKARTA, March 19 Asia Pulse - Indonesian State port operator PT Pelabuhan Indonesia (Pelindo) IV will spend Rp485 billion (US$40 million) on a container terminal project in Kariangau , Balikpapan, East Kalimantan. Pelindo Finance Director Mulyono said Rp175 billion of the fund will be used for the procurement of equipment including two container cranes. The container terminal project to be operational in 2011, will be built in cooperation with the East Kalimantan administration, the newspaper Bisnis Indonesia said. Last year, the flows of container cargoes via the Balikpapan port totaled 86,792 TEUs or an increase of 10 per cent from the previous year.
Indonesia's Kimia Farma Chalks Up 10.5pct Rise In Net Profit
JAKARTA, March 19 Asia Pulse - Publicly-listed pharmaceutical company PT Kimia Farma (JSX:KAEF) posted Rp57.89 billion (US$4.8 million) in net profit last year, up 10.52% from the previous year. The state company recorded Rp2.68 trillion in sales, with
operating profit at Rp106.58 billion last year. This year, the company is set to chalk up a 14.55% increase in income to Rp3.07 trillion, with net profit at Rp65.74 billion. The government plans to start the process of a merger between Kimia Farma and another state pharmaceutical company Indofarma this year.
Indonesian Agency Bulog's Sugar Sales Reach 100 Pct
JAKARTA, March 19 - Asia Pulse - Indonesia's state-owned logistics agency Bulog has been able to realize 100 per cent sales of 255,000 tons of crystal white sugar since it was
entrusted to sell the commodity by PT Perkebunan Nusantara (state plantation firm) and sugar distributor company PT RNI, Bulog president director Mustafa Abu Bakar said.
Mustafa Abu Bakar said here on Wednesday that stocks of that amount had been sold up in January. The sales of the sugar was started last November and December. "All of the 255,000 tons of sugar has been 100 per cent sold out," the Bulog chief said. Despite the fact, Bulog still had sugar stocks at present, especially at the private level while that at the state
plantation firms had already finished. He said that Bulog would conduct sugar buying activities in April or May because the milling season would start only in May.
When asked on the volume it would purchase for this year, the Bulog chief was reluctant to reveal it. "I don't have the guts to disclose it," Abu Bakar, who is a former acting governor of the province of Nanggroe Aceh Darussalam, said. On the marketing system, Abu Bakar said that for Bulog it would be the same as that used last year, where Bulog would collect
the stocks first and then distribute them down to the remote and isolated areas in Indonesia.
Indonesian Pvt Airline Lion Air To Scrap MD-80 This Year
JAKARTA, March 19 Asia Pulse - Indonesia's largest private airline Lion Air said it will replace all of its MD-80 aircraft with Boeing 737-900ER this year. The 11 units of MD-80 owned by the airline would serve as standby aircraft, its general director Edward Sirait said. The replacement of the MD-90 aircraft would follow later, Sirait
said, adding that the replacement could be made at once as it would depend a lot on the availability of new aircraft.
Lion Air is ordering 178 units of Boeing 737-900ER from the U.S. aircraft maker and so far only 19 units have been delivered. The airline hopes to receive more units to increase the number to 30 units by the end of this year and to 42 units in 2010, the newspaper Investor Daily said. It also hopes to receive two units of Boeing 747-400 aircraft to serve regular flights to Jeddah in June.
Indonesian Govt Verifying Industries Eligible For Fiscal Incentive
Surabaya, E Java, March 19 Asia Pulse - Indonesia's Industry Ministry is currently verifying industries which are eligible to receive fiscal incentives totaling Rp 2.5 trillion (US$ 210 million) in government-paid import duty (BMDTP).
"Until this month (March), there are scores of industries that have been verified. We have yet to complete the verification," Director General for Transporation Equipment Industries and Telematics of the Industry Minister Budi Darmadi said here on Tuesday.
According to him, the incentive is divided into some sectors of industries on needs basis and number of players, including the electronic sector which gets Rp230 billion, automotive Rp700 billion, shipbuilding Rp150 billion, information technology and optic cable Rp50 billion. The incentive is aimed at boosting exports. But he predicted that the export of electronic components in 2009 remain relativley unchanged.
"Perhaps the target of 2009 may be the same as in 2008 in which the exports reached only US$7.1 billion amid the global economic crisis," Budi said. He said the export growth of electronic products would be balanced by daily products. "Such DVD players, IT and lamps. Therefore the need for these products would still increase." On the other hand, exports of other electronic products such as refrigerators and air conditioners are predicted to decline. In the meantime Industry Minister Fahmi Idris reaffirmed that he
will continue evaluating incentives as a national economic stimulus.
Indonesia's Bank Mandiri Provides $1.94 Bln For Small Biz
JAKARTA, March 19 Asia Pulse - PT Bank Mandiri (JSX:BMRI) extended Rp23.19 trillion (US$1.94 billion) credits to micro, small and medium-sized businesses (UMKM) in 2008, or an increase by an average of 26 per cent per annum since 2005, the bank said in a media release here on Wednesday. It said that in 2005 the bank extended Rp11.59 trillion credits to the UMKM businesses. Based on the criteria set by Bank Indonesia (BI/the central bank), Bank Mandiri was able to provide credits to three groups of businesses. The first group consisted of micro businesses with a credit ceiling of Rp50 million. The second group consisted of businesses with a credit ceiling between Rp50 and Rp500 million
and the third one were companies receiving credits amounting to between Rp500 million and Rp5 billion.
It said that in 2008 credits provided for group Rp50 million amounted to Rp2.65 trillion, up from Rp808.67 billion in 2005. Bank Mandiri provided Rp4.7 trillion in 2008 for businesses grouped in the Rp50 million-Rp500 million recipients. The amount of credits provided in 2008 increased from Rp2.64 trillion in 2005. In the meantime, credits provided for companies in the Rp500 million - Rp5 billion group increased by an average of 24.8 per
cent per annum since 2005. Bank Mandiri director Bambang Setiawan explained that the number of UMKM businesses continued to increase reaching 98 per cent of total businesses in Indonesia.
Indonesian Bank Loan Interest Rates Fall Further: Banker
JAKARTA, March 19 Asia pulse - Banks may lower further the interest rates of their credits in line with the aggressive move of Bank Indonesia (BI/the central bank) to cut its benchmark rate, locally called BI Rate, in the past three months, a banker said. "Bank loan interest rates can be lowered further in adjustment to the cut in the BI Rate, moreover if BI once again lowers its rate," Mansyur S Nasution, executive vice president for consumer finance of Bank Mandiri said here on Wednesday. He said that his bank had lowered the interest rate of its housing scheme credits (KPR) from 15 per cent to 13.5 per cent.
Meanwhile, Bank Indonesia's chief for financial stability system Wimboh Santoso said banks had now begun lowering the interest rates of their lending. He said the average interest rate of banking credits in the third week of March, 2009 was recorded at 13.97 per cent, 0.27 per cent lower than that in December 2008, which stood at 14.20 per cent. The interest rate of deposit had dropped 0.51 per cent to 8.24 per cent in the third week of March, 2009 from 8.75 per cent in December 2009. Santoso said the interest rate of credits could not go down rapidly but for sure it would be lowered sometime in the future.
Usually, banks responded to the lowering of the BI Rate about six months to one year later.
On the occasion, Santoso denied the opinion that the interest rate was high due to the presence of segmented banks where only certain banks could borrow money in the inter-bank spot market. He said that only a small number of banks were affected by the
banking segmentation. "The number of banks which are not trusted by other banks is very small."Santoso said the banks' liquidity at present was basically adequate. In the third week of March, 2009, the third party funds at banks reached Rp1,768.7 trillion, or a growth of Rp57.6 trillion if compared with that in December 2008.
Credits meanwhile grew by Rp2 trillion to Rp1,286.1 trillion in the third week of March 2009 compared with that in December 2008.
Indonesian Excise On Tobacco Products Second Lowest Worldwide
JAKARTA, Mar 18 Asia pulse - The Indonesian Consumer Institute Foundation (YLKI) said the excise on tobacco products in Indonesia is the lowest in the world after Cambodia. "The excise on our tobacco products, including cigarettes, is one of the lowest, only 37 per cent. Actually the state is supposed to earn more from tobacco products," member of YLKI, Tulus Abadi, said in Jakarta. He said that the Rp 42 trillion (US$3.528 billion) per year in excise proceeds is actually still not enough, because under the Excise Law, Indonesia's excise proceeds could be raised to 57 per cent.
Dark Times In Taxation Sector Now Over, Indonesian Pres Says
JAKARTA, March 19 Asia pulse - Indonesia's President Susilo Bambang Yudhoyono asked all sides to let the dark times of taxation in the past be bygones and to enter an era where taxation is managed through a modern administration system.
"In the past, taxation was managed in a way full of uncertainties, reticence and personal deals. We have left that era," the president said when inaugurating a tax service office here on Wednesday. Yudhoyono said the time had come for Indonesia to enter a new
era of a well-organized taxation management through a modern taxation system. He said the taxation system in Indonesia had undergone basic administrative reforms. The president also appreciated the increasing state tax revenues which rose from Rp358 trillion in 2006 to Rp426.2 trillion in 2007 and Rp500 trillion ($US42 billion) in 2009.
The head of state said that the increase in the state tax revenues had enabled the country to carry out development with funds from domestic sources and reduce its dependence on foreign loans. "It happened in the past when Indonesia faced difficult times after the 1998 economic crisis, where sources of expenditures in the state budget depended largely on foreign loans and the proceeds of privatization (of state companies). Thanks to the hard work of us all, development is now funded with domestic receipts, the state's income from taxes in particular," he said. The president also said that the reforms in the taxation
administrative system had also provided a sense of justice for taxpayers.
With the increase in the number of personal taxpayers to 11 million following the introduction of the sunset policy, or an increase of 252 per cent, the president said that the policy was right. President Yudhoyono also expressed thanks to taxpayers and businesses that had fulfilled their obligations in paying tax because all this had helped increase state revenues from the tax sector.
Canadian Envoy Leads Business Delegation To N Sumatra
JAKARTA, March 18 Asia pulse - The Canadian Ambassador to Indonesia, John Holmes, will open the Canada-North Sumatra Business Forum in Medan (North Sumatra provincial capital) on March 19, 2009, it was reported here Wednesday. The event would be part of a three-day visit by a Canadian business delegation to North Sumatra, the Canadian Embassy said in a press release, adding that the purpose of the visit was to
expand bilateral relations between Canada and Indonesia. The Canadian Embassy is organizing this mission in conjunction with the Indonesia-Canada Chamber of Commerce (ICCC) and with the support of the regional chamber of commerce and the provincial government of North Sumatra. At the forum, North Sumatran businesses will get the opportunity to have one-on-one meetings with the Canadian business delegation. The delegation will also tour the facilities of a number of major companies in North Sumatra.
"Canada-Indonesia trade relations reached record levels in 2008, with C$2.5 billion (US$2 billion) (Rp23.1 trillion) in two-way trade," said Ambassador Holmes. "I am confident that this initiative will help companies from both Indonesia and Canada find new opportunities which are of particular importance in this time of economic uncertainty".
The Canadian delegation will include representatives of Canadian companies active in Indonesia in areas such as insurance (Manulife), education (Lasalle College), fertilizer (Canpotex) and power generation equipment (Babcock and Wilcox). The delegation will also include representatives of companies dealing with engineering and infrastructure (SNC Lavalin, McElhanney Indonesia), lubricants (Petro Canada), portable electric transmission towers (SBB), oil and gas equipment (Ilham Treda Industries), fire fighting equipment (SEI Industries), and roofing materials (Iko Industries Ltd).
Indonesia's Export Growth To Drop Below Zero Pct: Observer
JAKARTA, March 19 Asia Pulse - Indonesian export growth this year is predicted to stand at minus five per cent so that a new breakthrough must be sought amid the ongoing global crisis, an economic observer said. "This year, it is not necessary to expect more from export
activity, because growth in this sector will only stand at minus five per cent," director of the Econit Advisory Group Hendri Saparini said during the launch of a book on 'Economic
Constitution' here on Wednesday. According to him, under present circumstances, most of the export products were primary commodities whose prices had been declining since mid-2008. Since July 2008, export of plantation products had actually shown signs of crisis as marked by a decline in the prices of agricultural and plantation products.
"A drop in plantation as well as mining products had already been declining prior to the crisis, so that it is natural if export growth is really depressed," he said. Therefore, the country had to optimize export of each group of specific products and not export of raw materials. "Considering that our export is much depending on the exploitation of natural resources, so that we have to suppress the export of high value-added products," he said.
He opined that actually Indonesian products could not be said competitive and their competitive edge should be improved. However, special and specific step for each group of the products such craftsmanship and food industries should be in their classes and export destination. "This is what Thailand has done, namely through offensive strategy against food industry, so it remain being able to drive other sectors," he said.
Export destination countries which could receive Indonesian products should be specified because some countries are carrying out a tight supervision against foreign food products.

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