Friday, June 12, 2009
Business & Trade updates from Jakarta
- Telkom:Telkomsel To Issue IDR, Dlr Bonds For '10 Capex Needs
- Telkom: 1H Revenue May Grow "Low Double Digits" Vs 1H 08
- Krakatau Steel to Produce at Capacity in July as Demand Gains
- Indonesia's Krakatau Steel Pays Us$138 Mln Dividend To Govt
- India's TVS To Expand Indonesian Motorcycle Factory
- At Least 13 Indonesian Plastic Recycling Firms Stop Operation
- Indonesian Deposit Insurance Agency Cuts Rate By 25 Basis Points
- Incentives Needed To Make Banks In Indonesia Lower Rates
- Foreign Control Of Indonesia's Traded Shares Rising
- Indonesia, Vietnam Advised To Form Joint Robusta Coffee Panel
- Indonesia Detains 147 Foreign Fishing Vessels
- Indonesia's Suramadu Bridge To Be Reopened June 14
- World Crude Prices Affecting Indonesia's Industrial Dev't: Exec
- Central Sulawesi's Non-Oil Exports Down 24.41 Pct
- Indonesia's Bengkulu Prov. To Offer Its Commodities To China
(Courtesy Joyo News Service)
Telkom:Telkomsel To Issue IDR, Dlr Bonds For '10 Capex Needs
JAKARTA, June 12 (Dow Jones)--PT Telekomunikasi Indonesia
(TLKM.JK), Indonesia's largest telephone company by subscribers,
plans about IDR21 trillion in capital expenditure both this year
and next, about 30% of which it will fund using bonds and loans,
the company's finance director said Friday.
Cellular unit Telkomsel will next month sign deals for loans
worth IDR7 trillion with local banks and will likely issue
rupiah- and dollar-denominated bonds this year or next, Sudiro
Asno said after Telkom's shareholders meeting.
Asno said Telkom hopes before the end of 2009 to issue IDR1
trillion to IDR3 trillion bonds and sign IDR2.5 trillion loan
commitments, with local banks and the government funding its
capital expenditure requirements, along with the expenditure of
its other units besides Telkomsel.
The Telkom group companies will fund about 70% of their capital
expenditure requirements using internal cash, Asno said.
Telkom: 1H Revenue May Grow "Low Double Digits" Vs 1H 08
JAKARTA, June 12 (Dow Jones)--PT Telekomunikasi Indonesia
(TLKM.JK), Indonesia's largest telephone company by subscribers,
expects revenue in the first half of the year to grow by as much
as "low double digits" compared to the same period a year ago
due to an increase in subscribers and in its other businesses,
the company's finance director said Friday.
Revenue "may rise by single digits or low double digits"
compared to the January-June period last year, in which revenue
was IDR30.2 trillion, Sudiro Asno told Dow Jones Newswires on
the sidelines of Telkom's shareholders meeting.
Telkom provides fixed line and cellular services as well as data
mangement and broadband internet, among other products.
Krakatau Steel to Produce at Capacity in July as Demand Gains
By Bambang Dwi Djanuarto and Naila Firdausi
June 12 (Bloomberg) -- PT Krakatau Steel, Indonesia’s largest
producer, plans to resume output at capacity next month as
Krakatau started cutting production in November as lower demand
and increased imports boosted the country’s stockpiles of steel
coils, depressing prices.
“We will start operation at full capacity in July as demand
starts to increase,” Chairman Taufiequrrahman Ruki told
reporters last night in Jakarta. “We’ll try to fill domestic
demand even as prices remain low.”
Krakatau’s net profit rose to 459 billion rupiah ($45 million)
last year from 313 billion rupiah a year earlier, Ruki said. In
April, he said the state-owned company’s steel sales may drop 17
percent this year compared with 2008 as prices decline.
Indonesia's Krakatau Steel Pays Us$138 Mln Dividend To Govt
JAKARTA, June 12 Asia Pulse - Indonesia's PT Krakatau Steel has
decided to pay a Rp137.872 billion (US$137.9 million) dividend
to the government, or 30 per cent of its net profit made in 2008
totalling Rp459.572 billion.
"We proposed a pay-out ratio of 30 per cent this year," its
chief commissioner, Taufiqurrahman Ruki said after a general
shareholders meeting here on Thursday.
Ruki said in 2008 the company booked an increased net profit of
around 46 per cent totalling Rp459.572 billion from the previous
year`s Rp313 billion.
He said the shareholders in the meeting also agreed to allocate
Rp312.509 billion of the company`s profit made in 2008 for
"The reserve funds are intended for strengthening capital for
investment and capital expenditures," he said.
The company also met its obligation for the partnership program
and environment development reaching Rp9.1 billion.
According to rules allocation of funds for environment
development reaches 1.5 per cent of net profit or around Rp6.894
billion while for partnership program 0.5 per cent or Rp2.298
billion to help the poor living around the company`s compound.
Regarding the company`s planned initial public offering in 2009
Ruki said that it was still difficult to confirm the date.
"We have to constantly monitor the movement of share price
indices. If the price is still at current levels do not try to
enter the market," he said.
India's TVS To Expand Indonesian Motorcycle Factory
JAKARTA, June 12 Asia Pulse - India's PT TVS Motor Company
Indonesia said it will invest US$40 million this year to expand
the capacity of its motorcycle plant in Indonesia.
The additional investment will increase its total investment to
US$90 million in its factory in Karawang , West Java, Nurlina
Fatmikasari, TVS Indonesia corporate communication officer, said.
Part of the fund will be used to expand network of dealers,
Nurlina said, adding the company plans to open marketing offices
in 115 locations in 16 of the country's provinces.
It will also improve after sales service through 350 official
workshops located in Java, Sumatra and Kalimantan, she told the
newspaper Bisnis Indonesia.
At Least 13 Indonesian Plastic Recycling Firms Stop Operation
JAKARTA, June 12 Asia Pulse - At least 13 Indonesian plastic
recycling companies have halted production since early this
month on scarcity of supply of basic materials.
The companies were forced to lay off around 600 workers to
reduce operating costs, the association of plastic waste
Association chairman Ma'aruf Maulana said the trade ministry's
decision to tighten imports of used plastic caused the scarcity
in supply in Indonesia.
Ma'aruf said since early this year, plastic recycling industry
has operated much below capacity averaging 65 per cent of
Indonesian Deposit Insurance Agency Cuts Rate By 25 Basis Points
JAKARTA, June 12 Asia pulse - The Indonesian Deposit Insurance
Agency (LPS) has decided to cut again its insurance interest
rate by 25 basis points for the period of June 15 to September
"We decided to cut the rate because of the current economic
developments," the LPS executive chief Firdaus Djaelani said
here on Thursday.
The LPS rate for general banks is set at 7.5 per cent for rupiah
deposits and 2.75 per cent for deposits in foreign currencies
and 11 per cent for micro-credit banks.
He said the decision to cut the rate was based upon conditions
such as the drop in stages of bank deposit interest, the
relatively low inflation tendency, the decline in the BI key
interest rate and increasing liquidity of banks.
He said the width between insurance and key rates was now only
50 basis points (0.5 per cent) with the BI rate standing at 7.0
per cent. In the future he hoped it would be shorter, he said.
"In the future it could go there. Now it is still 50 basis
points. Indeed ours is still quite high to cover wider
customers," he said. Economic observer Tony Prasetyantono
meanwhile said that the decision was in line with the monetary
policy on BI Rate which continued to be cut.
"The movement in the BI Rate and the LPS Rate must be parallel
in order to give certainty regarding future monetary policy for
reference in determining business plans by banks and the real
sector. The central bank (BI) early this month cut its key rate
by 25 basis points to seven per cent.
Incentives Needed To Make Banks In Indonesia Lower Rates
JAKARTA, June 12 Asia pulse - The government should provide
incentives for banks so that they will be able to lower their
rates of interest in accordance with the already lowered
benchmark rate of Bank Indonesia (BI Rate), a private business
organization official said.
"The government can provide incentives for banks so that they
will be able to lower their interest rates in accordance with
the BI rate," deputy chairman of the Indonesian Chamber of
Commerce and Industry (Kadin), Sandiago Uno, said here on
He said the government should intervene in private banks which
had not yet lowered their interest rates because BI, the central
bank, had already cut its benchmark rate to 7 per cent.
Uno said that banks should have lowered their interest rates so
that it would not have affected micro, small and medium
Banks at present still imposed a range of 16 - 24 per cent
interest rates on their lending. Kadin hoped that banks would in
the near future cut their rates to about 10 per cent.
He said that the government and banks should provide low
interest credits for UMKMs like those provided for big
businesses which carried an interest of between 10 and 12 per
After all, UMKM contributed more to banks then big business
maker did, he said.
Early this month, BI cut its key rate by 25 basis points to
seven per cent. But the lowering of BI`s benchmark interest was
not followed by the lowering of banks lending rates.
In the meantime, chairman of the Association of Indonesian
Sidewalk Vendors Yudi Lazuardi asked banks to simplify
applications for smallholder credits for UMKM players and lower
high interest rates.
"We also hope the banks will raise business capital on a routine
basis to enable UMKM to reach progress in their operations,"
Foreign Control Of Indonesia's Traded Shares Rising
JAKARTA, June 12 Asia Pulse - A significant increase has been
recorded in foreign control of shares traded at the Indonesian
Stock Exchange rising 42 per cent in value to Rp632.9 trillion
(US$63.29 billion) in five months.
Foreign investors are showing growing interest as they believe
the country's economic condition will improve, analysts said.
The increase in investment was attributable not only to larger
amount invested by old investors but also to new investors, the
self regulatory organization of Indonesia capital market (KSEI)
KSEI director Trisnaldi Yulrisman said the number of shares
registered with KSEI rose in value to Rp981 trillion earlier
this month from Rp658 trillion by the end of 2008.
The shares registered with KSEI represent 60 per cent of the
total share market capitalization of Rp1,657.4 trillion at
present, Trisnaldi told the newspaper Investor Daily.
Chief researcher from BNI Securities Norico Gaman noted foreign
investors have been more aggressive in buying shares in the past
They believe Indonesia as one of the best portfolio investment
place in emerging markets, Norico said.
Indonesia, Vietnam Advised To Form Joint Robusta Coffee Panel
JAKARTA, June 12 Asia pulse - Indonesia and Vietnam should form
a join committee to handle robusta coffee trading as the two
countries together control 60 per cent of the world robusta
coffee market, a businessman has said.
Indonesian Coffee Exporters Association (AEKI) secretary Rahim
Kartabrata said Friday that cooperation between the two
countries in managing the robusta coffee trade was the only way
to change the present situation where the commodity`s market
price was determined at will by a handful of fund managers at
the London commodity exchange.
He said trading in robusta coffee, which is considered to be a
second-grade type of coffee, was often affected by the market
price of Arabica coffee, the supply of which was mostly
controlled by Latin and Central American countries through the
New York bourse.
A crisis at the the New York bourse would immediately affect the
robusta coffee price at the London bourse.
"If Indonesia and Vietnam can handle the market through joint
actions, a positive sentiment will no doubt prevail in the
market, and this will boost the robusta coffee price at the
farmer`s level," Rahim said.
So far, Vietnam is known as the biggest robusta coffee supplier
in the world with an annual production of 900,000-1,000,000 tons.
Indonesia ranks second in the export of robusta coffee with an
average production of 400-450 tons per year.
The main robusta coffee producing regions in Indonesia are
Lampung, South Sumatra and Bengkulu. Together the three regions
are also called Indonesia`s "coffee triangle."
The destination countries of Indonesian robusta coffee are the
United States, Japan, European countries, Russia, the Middle
East and China.
This year, Indonesia`s robusta coffee exports are predicted to
decline on account of climatological conditions, namely
increased rainfall in Sumatra.
Indonesia Detains 147 Foreign Fishing Vessels
JAKARTA, June 12 Asia Pulse - The Indonesian authorities caught
147 foreign fishing ships operating illegally in Indonesian
waters in five years ending 2008, an official report said.
Around 547 crew members of the vessels were detained and tried,
the directorate general for fishery and maritime resources
The report said the vessels charged with illegal fishing were
detained at navy bases in Pontianak, Ranai, Tarempa, Timika and
Illegal fishing is still rampant in Indonesia notably in eastern
part of the country, the report was quoted as saying by the
newspaper Bisnis Indonesia.
Indonesia's Suramadu Bridge To Be Reopened June 14
SURAMADU, Indonesia, June 12 Asia Pulse - Indonesia's
Surabaya-Madura (Suramadu) bridge will be reopened on June 14,
2009, after the tent used by President Susilo Bambang Yudhoyono
when dedicating the bridge has been removed, an technical
officer involved in the project said.
"The work to remove the tent is underway, and it will be
completed on Sunday (June 14)," Eko Prasetyo of the Management
Consultant Team of Suramadu bridge construction, said here on
The bridge was open during and after the inauguration ceremony
on Wednesday (June 10), but on Thursday at 1 pm local time, the
bridge connecting Madura island and Java island was closed.
The 30-meter-wide bridge`s closure is also for setting up of
median in the bridge`s gate in the Madura part.
The median construction would be completed in two days, Prasetyo
President Yudhoyono in his speech when dedicating the bridge
expressed his hope that the construction of the Suramadu bridge
could help improve the economy of Madura Island and the welfare
of the local people.
When inspecting the site of the Suramadu bridge project last May
2009, the president said the 5,348-meter bridge was the longest
sea-crossing structure in Indonesia and a symbol of national
awakening and development.
"Do not see the bridge as a mere link between Surabaya and
Madura but try to understand that it is a symbol of our
civilization and national development," the president said.
According to the head of state, the Suramadu bridge was also
monumental structure because of its huge financial cost and
The Suramadu bridge which will be the first to cross the Madura
Strait, has three cable-stayed sections between Surabaya on the
island of Java and the town of Bangkalan on the island of Madura.
The bridge has two lanes in each direction plus an emergency
lane and a dedicated lane for motorcycles.
Built at a total cost of about Rp4.5 trillion (US$445 million),
the Suramadi bridge is also the longest structure of its kind in
World Crude Prices Affecting Indonesia's Industrial Dev't: Exec
JAKARTA, June 12 Asia pulse - Crude prices in the world market
have a significant effect on development of Indonesian
industries, including the textile industry, because their
production processes depend on energy, an industrialist said.
This is because 30 per cent of the need for energy of textile
industry are fuel oils so that fuel oil prices have significant
impact on the development of industries, executive director of
the Indonesian Textile Producers Association (API), Ernavian G
Izmy said here on Thursday.
He said that production cost was much influenced by fuel oil
price developments so that the price of oil in the world market
would have impact on the developments of industry.
Izmy said the dollar exchange rate also affected the development
of the country`s textile industries. After all, many of textile
industries` raw materials were imported.
"We import about 100,000 tons of raw materials and they bought
with dollars," he said.
Therefore, he added, the developments of oil crude prices and
the dollar exchange rate against the rupiah also have
significant effects on the development of industries at home.
In the meantime, Chamber of Commerce and Industry (Kadin)
chairman said that Indonesia should not focus on the export of
raw materials only but also on diversified finished products.
Indonesia should also carry out export of locally-based creative
products offered in franchised packages, the Kadin chairman said
at a seminar on the protection of franchise business and
business licenses based on the Law on Intellectual Property
He said Indonesia should not allow itself to become a recipient
of foreign products only but it should also export its own
products which are typically Indonesian.
The Kadin chairman said that exporting an Indonesian (HAKI)
license and franchise was comparable to introducing Indonesia`s
culture and its people to the world economy.
Hidayat said earlier that Indonesians making a visit or staying
abroad might all want to see Indonesian products on display in
the business centers of the world`s big cities.
Central Sulawesi's Non-Oil Exports Down 24.41 Pct
PALU, Sulawesi, June 12 Asia Pulse - The proceeds from Central
Sulawesi`s non-oil/gas exports in the first quarter of 2009
reached US$56.95 million, a 24.41 pct decline from the same
quarter last year reaching US$75.35 million.
According to Bank Indonesia (BI) Palu office Thursday, the value
of the exports had been affected by their drop to Asian
countries, like Malaysia, Singapore, Vietnam, and India.
The province`s non-oil/gas exports to Malaysia in the first
quarter of this year reached only US$25.78 million, while in the
previous quarter reached only US$41.22 million.
The exports to Singapore dropped from US$7.90 million in the
IVth quarter of last year to US$1.81 million.
The exports to Vietnam dropped from US$3.16 million to US$1.21
million, and to India from US$42,000 in the same period.
Indonesia's Bengkulu Prov. To Offer Its Commodities To China
BENGKULU, June 12 Asia Pulse - Indonesia's Bengkulu provincial
administration will offer China its various commodities, so that
country would become one of the markets of the commodities from
the Indonesian province.
"Bengkulu will also be taking part in the China-ASEAN Expo in
October this year. We will use the event to introduce various
products, and in the coming years China is expected also to
become a a market of our commodities," Head of the Bengkulu
industry, trade, cooperatives, small and medium businesses (UKM)
agency Syamsu Ridhuan said here Thursday.
The commodities to be offered during the the event will include
minerals like coal and ferrous sand, plantation and farm
commodities, as well as handicraft products.
China, he said, is a market with good prospects in the sale of
Many goods and products of Bengkulu had been exported, but none
to China, he said. Bengkulu`s coal had been exported to India
and Malaysia with a volume of less than one ton per year.
"We have vast coal deposits, which could be exploited to the
maximum for marketing purposes, including to China," he said
Likewise, plantation commodities like CPO, had never been
exported to China.
Syamsu said Bengkulu will also introduce its handicraft goods to
the international market, first of all to China.