Monday, June 22, 2009

Business & Trade updates from Jakarta

- Indonesian New Car Sales Expected To Drop 25-30 Pct In 2009
- Indonesian Co Wika Secures $325 Mln Worth Of New Contracts
- Indonesian Ship Builder PT PAL Loses $4.5 Mln In 2008
- Bank Rakyat Indonesia To Issue Bonds
- Indonesian Airlines To Carry Cargoes From Malaysian Airport
- Indonesia's Debt Ratio Lower Than Advanced Nations' : Minister
- Official Defends Indonesian Govt's Debt Management Policy
- Indonesian Oil Palm Rejuvenation Needs $340 Mln
- Int'l Cooperation Needed For Indonesia's Traditional Fishermen
(Courtesy Joyo News Service)
Indonesian New Car Sales Expected To Drop 25-30 Pct In 2009
JAKARTA, June 22 Asia Pulse - New car sales in Indonesia are
predicted to drop between 25 and 30 per cent in 2009 from
600,000 units recorded last year, an industry spokesman said.
Freddy Sutrisno, secretary general of the Association of
Indonesian Auto Industries (GAIKINDO), said here Friday the
sales would drop because of weakening public and corporate
demand as a result of the global financial crisis.
"New car sales in 2009 will be worse than in 2008," he said.
He said new car sales used to increase for the past few years.
In 2005 they reached 534,000 units but dropped to 318,000 in
2006 before rising again to 430,000 in 2007.
The biggest sales of 600,000 units were recorded in 2008.
Gaikindo is targeting 450,000 units in new car sales this year,
he said.
"Although it is quite hard to achieve because of our financial
crisis we hope this year`s sales will be able to reach 450,000
units. It will be quite good if the figures are met," he said.
He said in 2008 new monthly car sales in Indonesia reached above
50,000 units in the first semester but because of the crisis
sales in the period this year had only reached around 30,000
Slowly though new car sales kept increasing from month to month
from 34,000 units in April to 35,000 in May and hopefully 36,000
to 37,000 in June, he said.
"If sales are increasing it means our economy is improving," he
Freddy said around 70 per cent of new cars sold in the country
were produced at home while the rest was imported.
Indonesian Co Wika Secures $325 Mln Worth Of New Contracts
JAKARTA, June 22 Asia Pulse - Publicly traded Indonesian
construction company PT Wijaya Karya (Wika) (JSX:WIKA) Wijaya
Karya said it has secured new contracts valued at Rp3.35
trillion (US$325 million) in the first five months of this year.
Wika still hopes to secure more contracts valued at Rp1.3
trillion until the end of June, Natal Argawan, the corporate
secretary of the state company said.
By the end of the first quarter of this year the company already
secured contracts valued at Rp2.77 trillion, Natal told the
newspaper Investor Daily.
He said the new projects won by five subsidiaries including Wika
Induk , Wika Beton, Wika Realty, Wika Intrade, Wika Insan
Pertiwi and Wika Gedung.
This year the company hopes to secure Rp9.39 trillion worth of
new contracts, he added.
Indonesian Ship Builder PT PAL Loses $4.5 Mln In 2008
SURABAYA, June 22 Asia Pulse - PT PAL Indonesia, the state-owned
ship-building company, suffered a loss of Rp47 billion (US$4.5
million) in 2008, its chief said.
"The loss is relatively smaller than that in 2007 when it
reached Rp543 billion," PT PAL president director Harsosusanto
said here on Friday.
Therefore, he said, the company now had the courage to
participate in ship procurement biddings, especially after it
received an international shipbuilding certificate following its
success in meeting orders in time.
Although its performance was improving as shown by its
decreasing net loss, the state enterprise minister`s office
could not as yet confirm the schedule for capital injection to
the company through PT Perusahaan Pengelola Aset (PPA).
"We will indeed inject capital but when it will be done we
cannot as yet confirm," the office`s deputy for mining,
strategic industries, energy and telecommunications, Sahala
Lumban Gaol, said.
He said there were procedures that had to be followed by PT PAL
before it could get funds from the PPA.
"To save PT PAL some procedures must be passed to assure
effective use of the funds," he said after leading PT PAL`s
shareholders` meeting.
According to plans, PT PPA will inject Rp193 billion and US$26
million to save PT PAL`s balance sheet.
Until now however the schedule for its disbursement is not yet
certain. "Actually we are hoping for its disbursement,"
Harsusanto said.
Bank Rakyat Indonesia To Issue Bonds
ANYER, W Java, June 22 - Asia Pulse - PT Bank Rakyat Indonesia
(BRI) plans to issue bonds worth no less than Rp2 trillion
(US$194 million) in the second semester this year to increase
its capital and credit distribution.
"We have already made preparations for it," the bank`s head of
planning and strategy division, Irianto, said in a press
gathering here on Saturday.
He said he still had yet to wait for the financial report for
the first semester at the end of June before implementing the
He said it would take around one and a half months or two months
to audit the first semester`s financial report and therefore the
issuance of the bonds would only be done after July.
Irianto said no decision had been made yet on whether the bond
would mature in five or ten years.
He said BRI had actually planned to issue bonds several
semesters before but because economic conditions were not
supportive the plan had been delayed.
The bank`s head of investor relationship desk, Haru
Koesmahargiyo, said BRI until March 2009 still performed well
growing above the average national banks.
"BRI`s assets grew 24.78 percent, third party funds up 27.23
percent and credit rose 39.51 percent while profit increased
22.02 percent," he said.
Haru said the value of BRI`s asssets reached Rp250.14 trillion
while its outstanding credit Rp165.23 trillion, third-party
funds Rp203.11 trillion and net profit Rp1.72 trillion.
The bank`s capital adequacy ratio was recorded at 14.91 percent
while its non-performing loan 3.24 percent and its loan to
deposit ratio at 81.35 percent.
Indonesian Airlines To Carry Cargoes From Malaysian Airport
JAKARTA, June 22 Asia Pulse - Indonesian airlines will be
allowed to carry passengers and cargoes from a number of
Malaysian airports on reciprocal arrangement to certain cities
in other countries in the world starting this year.
The agreement will be signed between the two sides by the end of
July, Air Transport Director at he Transport Ministry Tri S
Sunoko said.
Sunoko said based on the agreement, Indonesian airlines will be
allowed to carry passengers and cargoes from the Malaysian
cities of Kuala Lumpur, Kinibalu and Kuching airports.
On the other hand Malaysian airlines will be allowed to carry
passengers and cargoes from Indonesian cities of Jakarta,
Denpasar and Makassar to four cities in Australia.
Indonesia's Debt Ratio Lower Than Advanced Nations' : Minister
JAKARTA, June 22 Asia Pulse - Indonesia`s debt ratio against its
gross domestic product (GDP) has in the past five years
continued to decline and is now even lower than those of
advanced states, Finance Minister Sri Mulyani said.
"Although the nominal value of Indonesia`s external debts is
increasing, its GDP is also increasing so that its debt ratio
against its GDP has dropped from 57 per cent in 2004 to 32 per
cent now," the minister said here this week.
She said that in 2008 the debt ratio of Indonesia against its
GDP was 32 per cent while that of Japan was 200 per cent. The
minister also mentioned that the United States` debt ratio
against its GDP was 81.2 per cent and Britain 61 per cent.
This means that the amount of debts of the advanced countries is
big and their debt ratios against their GDP were also big.
"But the local non-governmental organizations do not kick a fuss
over the Japanese debts, while their counterparts in Indonesia,
though its debt ratio is small, always raised anger and
criticism," the minister questioned.
In the meantime, the ratio of Indonesia`s debt interest against
its revenues and expenditures is also small, namely on between
9.8 and 10 per cent.
At present, (per March 31, 2009) Indonesia`s debts which have
fallen due amount to Rp64 trillion in foreign loans and Rp30
trillion in promissory notes.
On the occasion, the minister also criticized international
economic rating agencies which so far were unfair in giving a
rating to Indonesia as a developing country.
The international economic rating agencies always gave AAA
ratings to advanced countries such as the United States and
Britain, though these countries` economies are now weakening due
to the crisis.
"The rating agencies are not coming here to see the details. I
happened to touch this matter in a Bali meeting recently. I
raised the question of their existence. There are only three
rating agencies. If they make mistakes who will correct them,"
the minister said.
Official Defends Indonesian Govt's Debt Management Policy
JAKARTA, June 22 Asia Pulse - Indonesia's debt management has
improved significantly over the past five years and claims by
some politicians that the current government has left the
country with a heavy debt burden are groundless, an official
President Susilo Bambang Yudhoyono has come under fire
throughout the current presidential election campaign for his
administration's debt management policies.
Vice President Jusuf Kalla has said he wanted to reduce the
national debt , while former President Megawati Soekarnoputri
has said she would like to restructure the country's debts.
However, none of the presidential candidates has offered
detailed steps for how they hope to accomplish these policy
Although the country's debt levels have soared in recent years,
the ratio of the country's debt to its Gross Domestic Product
has fallen , Rahmat argued.
Data at the finance e ministry show that the country's
outstanding debt has almost doubled in the past decade from
Rp940 trillion (US$91.2 billion) in 1999 to Rp1,700 trillion
this year.
Over the same period the debt to GDP ratio has dropped from 85
per cent to 32 per cent as the GDP soared from Rp1,105 trillion
to Rp5,312 trillion, the newspaper Jakarta Global said.
Indonesian Oil Palm Rejuvenation Needs $340 Mln
MEDAN, N Sumatra, June 22 Asia Pulse - The Indonesian government
needs to provide Rp3.5 trillion (US$339.5 million) in funds for
the rejuvenation of about one million of the country's 2.7
million hectares of oil palm plantations, an oil palm farmer
"About one million hectares of oil palm plantations are already
20 to 30 years old so that their productivity has dropped to
about 5 to 10 tons of fresh fruit bunches (TBS) per hectare,"
Anizar Simanjuntak, general chairman of the Indonesian Oil palm
Farmers Association (Apkasindo) said here on Saturday.
He said that with the decline in the productivity of the oil
palm plantations, farmers could not maximally get profit from
their plantations.
The Apkasindo chairman said that the amount of funds needed to
rejuvenate the plantations was about Rp3.5 trillion with the
assumption that each hectare would need Rp35 million.
He said that the government was expected to help the farmers
because their contribution to the national crude palm oil
exports (CPO) was big.
Simanjuntak said that the government could take the funds from
the CPO export taxes and fees.
"Apkasindo urged the government to realize the fund assistance
for the rejuvenation of the oil palm plantations owing to the
fact that so far the government`s revitalization program is
still running slowly," he said.
Simanjuntak said he had reported to the North Sumatra Governor
Syamsul Arifin on the need to rejuvenate the oil palm
The governor had issued a recommendation to the central
government that it should return the CPO export tax and fees to
the North Sumatra`s oil palm farmers, he said.
Indonesian Palm Oil Producers Association (Gapki) chairman
Joefly J Bachroeny predicted recently that Indonesia`s crude
palm oil (CPO) production will increase 5-10 percent as harvest
time in the country would begin soon.
"CPO production in the January-April 2009 period reached 5
million tons. We hope the figure will increase 5-10 percent in
the upcoming months as the grand harvest will happen soon," he
He said the country`s CPO production in 2009 was projected to
reach 20 million tons, of which 15.5 million to 16.5 million
tons including biodiesel fuel would be exported.
In 2008, Indonesia produced 14.29 million tons of CPO, 33
percent of which was exported to India.
Int'l Cooperation Needed For Indonesia's Traditional Fishermen
JAKARTA, June 22 Asia Pulse - The Indonesian government needs to
seek international cooperation to protect traditional fishermen
who run aground in other countries due to uncontrollable natural
factors at sea, a law expert said.
"The cooperation is also important to prevent theft of marine
resources by foreign fishermen such as often happend in the
waters of Aceh province," M Adli Abdullah of Banda Aceh-based
Syiah Kuala Unviersity said here on Saturday.
Besides, such a cooperation on fishing in sea border areas would
prevent the entry into the country of illegal migrants, he said.
The lecturer on law said that in the current bad weather such
things as strong winds and high waves as a result of global
climate change could easily cause traditional fishermen to be
dragged away into other countries` territorial water.
"I am afraid that bad weather as a result of global climate
change will cause more Indonesian fishermen to be carried away
into neighboring countries` territorial waters, or other
countries` fishermen to our waters", he said.
In the meantime, Indonesia and Australia are reportedly to
readjust the management and utilization of their resources in
areas along their common borders.
Spokesman of the Ministry of Marine and Fisheries Affairs (DKP)
Soen`an Hadi Poernomo said here on Friday Indonesia and
Australia needed to cooperate in making the readjustments.
Matters taken into account in the readjustments of the resources
management included the welfare of traditional fishermen and the
conservation of the ecology and natural resources in the border
areas, Poernomo said.
He said the two sides, through the DKP and the Australian
embassy, needed to carry out a joint research by experts of the
two countries on the status of the ecological resources of the
waters on their common borders.
Both sides agreed to decide the ecological status of the
resources and openly define which resources still could be
exploited, or could be exploited with a restricted number of
fishing vessels/fishing equipment and time or period of fishing.
Poernomo said that the two countries also considered the need to
define the categories of groups of fishermen crossing the sea

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