Indonesia's Gresik says 2008 net profit up about 40 pct

Reuters, Mon Mar 16, 2009 4:54am EDT  

JAKARTA, March 16 (Reuters) - Indonesia's largest cement firm, PT Semen Gresik (SMGR.JK), on Monday said net profit rose about 40 percent to 2.5 trillion rupiah ($208.8 million) in 2008 from 1.78 trillion rupiah in 2007, thanks to a construction boom. 

The state-controlled company also said sales climbed to 12.2 trillion rupiah in 2008, from 9.6 trillion rupiah in the previous year. 

The firm's shares were down 0.72 percent at 0848 GMT at 3,425 rupiah. ($1=11975 Rupiah) (Writing by Andreas Ismar; Editing by Sara Webb)

President wants Bakrie to pay out mudflow compensation today

The Jakarta Post | Wed, 12/03/2008 3:50 PM

President Susilo Bambang Yudhoyono has demanded the Bakrie Group settle on Wednesday all its liabilities tied to the compensation owed victims of the Lapindo mudflow disaster in East Java.

"The president wanted the matter settled today," presidential spokesperson Andi Mallarangeng told reporters at the State Palace Wednesday noon.

Earlier the President held a meeting with a representative of the Bakrie family, Nirwan Bakrie, accompanied by Public Works Minister Djoko Kirmanto and Social Services Minister Bachtiar Chamzah.

Andi said the president left the meeting to attend the inauguration of the A.H. Nasution museum in Menteng, Central Jakarta, and instructed the ministers and Nirwan to draw up the final settlement details within two hours.

The meeting with the president will resume again later this afternoon, Andi said.

Thousands of protesters have been rallying in front of the State Palace in Monday following Bakrie's failure to disburse the remaining 80 percent of the compensation to the victims by the Dec. 1 deadline. (and)

Related Articles:

Compensation deal reached in lengthy Lapindo debacle

Lapindo mudflow victims make camp at Dutch Embassy

Surabaya to host regional investment promotion expo

The Jakarta Post, Jakarta

The Investment Coordinating Board (BKPM) will hold a regional investment promotion expo in Surabaya this week, the second such regional event this year in which all 33 provinces will showcase their respective business and investment potentials.

The expo, which will be held on Oct. 24-26, will give around 1,500 invited investors the chance to participate in round table discussions and forums, according to Darmawan Djajusman, BKPM deputy chairman for investment promotion.

This year's first regional expo was held last month in Batam.

"Invitations have not only been sent to local and overseas companies, but also to foreign business chambers as far away as Brazil -- who have by the way confirmed their participation," Darmawan told The Jakarta Post recently.

"Our representatives in foreign countries have also been actively involved in promoting this event," added Yuliot, BKPM director in charge of domestic promotion.

Yuliot said the agency organized the event in an effort to promote investment opportunities in the country. "Every year, we organize two major regional events and two others overseas."

Earlier in the year, the BKPM organized a promotion investment exhibition in Seoul, South Korea and plans to hold another one in Paris later in the year.

Since the monetary crisis, Indonesia has been boosting efforts to lure foreign investors in order to help fuel its consumption-driven economy.

By promoting investment opportunities in regions, the government is hoping to spark competition among the provinces in terms of ensuring a business-friendly climate.

All efforts, however, are often still riddled with classic problems, such as complicated licensing procedures and bureaucratic red-tape.

According to the latest survey from the World Bank and its private sector, the International Financial Corporation (IFC), Indonesia remains a tough place for investors.

The survey says 105 days are required for an investor to start up a business in the country, far longer than its main regional competitors like China, Malaysia and Vietnam, let alone Singapore.

Acknowledging this, Yuliot said many regional governments, and especially the BKPM itself, have continued to address such issues and have in some cases, made some improvements.

"With the BKPM, for instance, all procedures can now be completed within five working days. The target is actually 10 days.

"More and more regencies have set up a one-roof investment service. Around 200 regencies are now doing this, although most of them are located on the larger islands, such as Java and Kalimantan," Yuliot said.

He said the Surabaya event would also host a forum in which businesspeople from East Java could meet with relevant ministries and agencies to discuss the problems caused by the Lapindo mudflow disaster.

Govt has five commitments to help MSMEs

Jakarta (ANTARA News) - Indonesia's Cooperatives, Small and Medium Entrepreneurs Minister Suryadharma Ali said there were five government commitments in helping micro, small and medium entrepreneurs (MSMEs).

Among them were the empowerment of Business Development Service Providers (BDS-P), funding, creation of job opportunities and empowerment of civitas academic cooperatives as well as harmonization in understanding MSMEs through the law.

Speaking at a journalists orientation forum here on Thursday, the minister stressed that the first government commitment had to do with efforts to empower business development service providers (BDSP).

This institution played a key role in providing consultation services to MSME centers in Indonesia in addition to giving non financial assistance to MSMEs in developing the potential of their businesses. Besides, this institution was also attempting to bridge productive sources like information on capital, markets, technology and human resources.

Data from the Cooperatives, Small and Medium Entrepreneurs Ministry indicated that the empowerment of BDSP had already been developed since 2001.

At present there are about 957 BDSPs, most of which are scattered in 33 provinces and 339 districts/cities.

The second government commitment was linked particularly to funding sector. Talking about funding, many MSMEs were unbankable even though their business prospects were good. They often ran into difficulties in their efforts to obtain working capital.

MSMEs had such assets as plots of land or business buildings. Unfortunately their ownership right could not be made as a collateral in getting credit from banks.

Hence, the ministry had cooperated with the National Land Agency (BPN for many years to make certification program over their right, Suryadharma said adding that it was a chance for MSMEs to solve their funding problems.

"The funding aspect for MSMEs is one of the realizations of the government`s policy package in the real sector," he said adding that improving the aspect of funding, the government will take two steps, namely developing micro financial institutions and credit quaranty program for MSMEs.

Suryadharma also reiterated the third commitment which had to do with the efforts to create job opportunity through university graduates` self employment program (Prospek Mandiri).

This program is directly oriented to business by creating new business opportunities and not to create new job seekers.

In 2006, university graduates` self-employment and job-opportunity creation program was more focused on six provinces, namely East Java, Yogyakarta, West Kalimantan, Maluku, West Nusa Tenggara and Riau islands.

According to a plan, at least 925 university graduates who had set up around 37 cooperatives were reported to be members of the program.

In addition, the cooperatives, small and medium entrepreneurs ministry also had the fourth commitment for the employment of civitas academic cooperatives (Kocika).

The government had allocated a budget of about Rp5 billion for strengthening their capital in the form of revolving funds in 10 Kocika cooperatives in ten higher learning institutions.

Furthermore, the minister said the budget for Kocika program would rise to Rp13 billion in 2008.

The fifth comitment, he added, had to do with harmonization of MSMEs understanding under the law which until now is still under discussion at the House of Representatives.

Under the law, there will be a legal umbrella for the cooperatives, small and medium entrepreneurs ministry to execute their task in helping MSMEs in the country.

West Sumba teacher takes home Kalpataru award

M. Taufiqurrahman, The Jakarta Post, Jakarta

Like Sysiphus of Greek mythology, who relentlessly carries a rock uphill, West Sumba native Elan Wukak Victor has for years carried out a similarly endless task, growing trees on rocks.

The 63-year-old English teacher started by encouraging his pupils to grow trees in their schoolyard, an idea he took from school to school.

And after 30 years, Elan has planted 400,000 trees, distributed 100,000 seeds to 23 green community groups he helped set up as well as built 81 water reservoirs across Waikabubak, a barren, hilly village in West Sumba, East Nusa Tenggara.

Elan's hard work paid off on Wednesday, when he, along with 11 other environmental activists, was awarded a Kalpataru, the highest award for environmentalists in Indonesia.

Elan won in environmental conservation pioneer category, together with Amandus Kaize from Merauke, Papua, and village head Slamet Tugiyanto from Magelang, Central Java.

Kaize was honored for his efforts to grow a rare variety of plants in a protected forest controlled by his tribal community, while Slamet won for promoting multiple crops among local farmers.

One notable figure who also won the award was former West Java governor Solichin Gautama Purwanegara, for his campaign against illegal logging and on the regreening of community-controlled forests in nine regencies in West Java.

Apart from the Kalpataru awards given to environmental activists, the government has handed out Adipura awards to cities that strive to promote cleanliness.

This year, the government gave the awards to 84 cities throughout the country. More than 300 cities were nominated for the Adipura awards this year.

All five municipalities in Jakarta won Kalpatarus in the category of metropolitan city. Other cities in the category which won Kalpataru are Palembang in South Sumatra and Surabaya in East Java.

Jakarta's gain, however, was at the loss of other cities in the greater Jakarta area such as Bekasi, Bogor and Tangerang. None of these cities won Adipura in this year's contest.

Other cities which also won Adipura include Padang (West Sumatra), Yogyakarta, Denpasar (Bali), Malang (East Java) and Pekanbaru (Riau).

President Susilo Bambang Yudhoyono said in his speech before presenting the two awards that the Indonesian people did not have to wait for people in other countries to save the environment.

"Let us save the earth together with other people in this world," Yudhoyono said.

The President also called on local governments to take environmental protection into account when making policy.

He also reiterated his statement about the need to prepare for global warming's fallout.

Yudhoyono said that global warming would have a disastrous impact on Indonesia as an archipelagic country, as the rising of sea levels would drown many of the country's small islands.

"The time is high for us to find a breakthrough and brace for global warming," he said.

Indonesia has over 18 million micro-business

Manado, North Sulawesi (ANTARA News) - Indonesia has 18,933,701 micro businesses accounting for 83.2 percent of the total number of enterprises which was recorded at 27,737,314, an economic census conducted by the Central Bureau of Statistics (BPS) in 2006 showed.

The number of small-scale businesses was 3,594,254 or 15.8 percent, medium-scale businesses 152,789 or 0.7 percent, large businesses 44,038 or 0.2 percent and unclassified businesses 2,532 or 0.1 percent, Nursinah Amal Urai, a BPS director, told a seminar on the economic census 2006 here Friday.

The census also showed 10,297,908 or 46.3 percent of the total number of enterprises were engaged in wholesale and retail trading, 3,220,156 or 14.2 percent in processing industries, 3,015,208 or 13.3 percent in transportation and warehouse services and 2,702,574 or 13.3 percent in the communication sector.

Quoting the data, Nursinah said the business sector in Java accounted for 60.13 percent of national economic activities.

Three provinces which made the largest contributions to the national economy were Jakarta (17.48 percent), East Java (15.18 percent) and West Java (14.55 percent).

Other provinces whose contribution to the national economy reached more than 1 percent were Central Java (8.47 percent), Banten (3.44 percent) and Yogyakarta (1 percent).

The significant contribution from provinces in Java to the national economy could not be separated from the processing industries whose percentage stood at 80.

The data also showed the contribution of Java to the national economy had continued to grow in the past five years, Nursinah said.

Java`s contribution to the national economy was recorded at an average of 59.32 percent in 2000-2005 and it increased to 60.13 percent in late 2005.

Investment in first quarter 2007 up 27.16 pct from previous year

Jakarta (ANTARA News) - Capital Investment Coordinating Agency (BKPM) Chief Muhammad Lutfi said here on Tuesday investment in Indonesia in the first quarter of this year reached Rp40.59 trillion or up by 27.16 percent compared to the same period last year.

This meant investment growth had returned to a pre-crisis level, he said.

He said "the figure represents 30 percent of the government`s investment target for the year reaching 70 percent of the expected investment of 2005 totaling Rp172.77 trillion."

Lutfi said he believed the achievement would help push economic growth to meet this year`s target of 6.3 percent.

The target of investment for 2007 had been set at Rp83.08 trillion.

According to BKPM records, foreign investment grew by 15 percent from US$2.6 billion to US$2.99 billion from January to March.

Domestic investment meanwhile reached Rp13.68 trillion or rose 60.56 percent compared to the same period last year when the figure was Rp8.52 trillion.

Five sectors that had received the largest foreign investment were pharmaceutical and chemical industries (US$1.5 million), printing, paper and paper product industries (US$394.3 million), mining (US$252.3 million), food industries (US$189.8 million) and construction (US$149.3 million).

The five biggest sectors receiving domestic investment meanwhile were printing and paper industries (Rp3.8 trillion), metal, machineries and electronics industries (Rp2.9 trillion), food industries (Rp2.4 trillion), plantations and food crops cultivation (Rp1.73 trillion) and construction (Rp1.4 trillion).

Jambi enjoyed the biggest domestic investment (Rp3.7 trillion) followed by Southeast Sulawesi (Rp2.8 trillion), Jakarta (Rp2.4 trillion), Riau (Rp1.9 trillion) and East Java (Rp672.3 billion).

The largest foreign investment meanwhile was enjoyed by East Java (US$1.5 billion), followed by Jakarta (US$662.9 million), Riau (US$392.4 million), West Java (US$200.1 million) and Banten (US$86.5 million).

"Investment in East Java remains high meaning that it has not been affected by the Lapindo mudflow disaster," he said.

Lutfi said the largest foreign investment came from Britain totaling US$1.4 billion in 17 projects while the second largest investment was from Taiwan totaling US$398.4 million in 11 projects.

Australia came third with its investment reaching US$179.2 million in eight projects, followed by South Korea US$165,2 million in 46 projects and Japan US$149.1 million in 24 projects.

Govt easing procedures of doing business in densely-industrialized areas

Jakarta (ANTARA News) - The Indonesian government is trying to loosen six procedures for doing businesses in the country`s eight densely-industrialized regions to raise its investment privilege rating to 75th in 2008 from 135th in 2006, an official said.

"We will launch the project in eight densely-industrialized regions first," Head of the Investment Coordinating Board (BKPM) Mohammad Lufti said following a limited coordination meeting with Vice President Jusuf Kalla at the Office of the Administrative Reforms Minister here on Friday.

The meeting also agreed on the formation of a small team with Administrative Reforms Minister Taufiq Effendy as its chief and the BKPM chief Mohammad Lufti as executive chief to relax the procedures for doing businesses in the regions.

The eight regions are Jakarta, Banten, West Java, Central Java, East Java, Sumatra and Sulawesi.

The six procedures cover exports and imports, enforcing contracts, paying taxes, applying for building permits, and starting a business.

"Under the current circumstances, we will be able to improve our rating to 56th from 135th on condition that other countries do nothing to improve their investment privileges," Lufti said.

Under the present procedure, a foreign investor needed 97 days to start a business in the country and the government had been trying to reduce the period to 23 days, he said.

"God willing, a foreign investor can start doing business within 23 days," 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.

PGN blames management, technical problems for pipeline delays

Ika Krismantari, The Jakarta Post, Jakarta

State gas company PT PGN has blamed a six-month delay in the opening of a key US$1.1 billion pipeline -- which sent its shares tumbling by 23 percent last week -- on management and technical problems.

The pipeline will span a total of 1,106 kilometers and link South Sumatra and West Java, and have the capacity to transport 1,000 million standard cubic feet per day (mmscfd) of gas. It was originally scheduled to open in December.

PGN's shares fell 23.3 percent last week to Rp 7,400 (US$0.81) from Rp 9,650.

"We should have realized there would be a delay earlier, but because of the explosion the directors, who were appointed in mid-November, were focused on that," PGN president director Sutikno said Sunday.

The explosion he was referring to involved a PGN gas pipeline in Sidoardjo, East Java, the site of the mudflow disaster.

It was not until the middle of December that the directors started analyzing the problems hindering the gas pipeline project, he said.

"We released a statement about the delay on Jan. 11, after we reached a final conclusion on how long the project would be delayed," Sutikno said.

He denied there was any effort on the part of the management to try and cover up the delay.

PGN director for development Adil Abbas said another problem facing the project was the issue of land clearance.

As a result of the delay in the opening of the pipeline, PGN revised down its gas production target for this year to 555 mmscfd from 787 mmscfd.

For 2007, PGN has set aside $517.11 million for a number of different projects, including gas pipelines linking Duri in South Sumatra, Dumai in Riau and Medan in North Sumatra.

Data to determine government's gas policy to be issued soon

The Jakarta Post, Jakarta

Long-awaited projections of the country's long-term gas supply and needs will be issued later this month, providing the government with reliable figures on whether or not it should go ahead with its liquefied natural gas (LNG) export policy and interisland gas pipeline projects.

"I hope the preparation of the gas supply and needs projections will be completed this month," the Energy and Mineral Resources Ministry's director general of oil and gas, Luluk Sumiarso, told the Suara Pembaruan daily Wednesday.

He said that the gas projections would provide information on proven gas reserves and potential demand in nine gas-producing provinces, including Nanggroe Aceh Darussalam, North Sumatra, South Sumatra, Jambi, West Java, Central Java, East Java, East Kalimantan and Papua.

"The data will be used as the basis for deciding whether or not we will go ahead with the plan to build a gas pipeline linking East Kalimantan and Central Java, and to determine our future export policy," he said.

PT Bakrie & Brothers won tenders from the downstream oil and gas industry regulator, BPH Migas, in July to build and operate the 1,115-km pipeline linking East Kalimantan and Central Java.

However, the construction of the $1.26 billion pipeline project has been delayed due to a lack of gas supplies.

Current gas production in East Kalimantan is only enough to supply the PT Badak NGL liquefied natural gas plant, the country's largest LNG producer.

Energy and Mineral Resources Minister Purnomo Yusgiantoro had said that the fate of the pipeline project would be determined after the issuance of the gas supply projections.

Purnomo said that the government might also choose to use LNG tankers, instead of building pipelines, to overcome gas shortages in Java.

Due to the decline in gas production, the government had planned to cut LNG exports by 19 percent to Japan, South Korea and Taiwan this year.

Indonesia may ship 19.4 million metric tons of LNG this year, less than the contracted 24 million tons. Pertamina is also negotiating the postponement or replacement by other producers of 36 cargoes from the Badak plant and 22 from Aceh-based LNG producer PT Arun NGL.

Luluk said the government was still committed to exporting LNG based on existing contracts, even if there was a shortage of gas supplies at home.

The gas supply projections will only affect future export policy, he said.

According to figures issued by the Energy and Mineral Resources Ministry, Indonesia's total gas reserves stood at 187.1 trillion standard cubic feet (TSCF) last year, up from 185.8 TSCF in 2005.

Last year, Indonesia produced a total of 8.10 billion standard cubic feet per day. About 54 percent of the total gas production was exported, mostly in the form of LNG. The remaining 46 percent was sold on the domestic market.

China's ICBC says will buy Indonesian bank

January 01, 2007, The Jakarta Post

BEIJING (AP): The Industrial and Commercial Bank of China, which had the largest-ever IPO in October, said Monday it had agreed to acquire the small Bank Halim of Indonesia in its first such overseas purchase.

ICBC said it would buy 90 percent of Bank Halim, with an option to buy the remaining 10 percent from shareholders in three years. No value of the deal was given.

"It is the first time that ICBC has taken over a foreign bank ... and should give the bank experience to expand into international financial markets," ICBC said on its website.

ICBC made history in October by making the first ever simultaneous Hong Kong and Shanghai listing and raising US$21.2 billion in the world's largest IPO, surpassing the record $18.4 billion raised by the NTT DoCoMo Inc. IPO in 1998.

The Bank Halim deal still has to be approved by regulatory authorities in both countries.

The privately held Bank Halim is based in Surabaya, on Indonesia's main island of Java, and with assets of $50 million is much smaller than ICBC, which has its headquarters in Beijing.

The Chinese bank, which is the largest company by capitalization on China's stock markets, said that by the end of June it had total assets of more than 7 trillion yuan ($897 billion), with more than 2.5 million corporate and 150 million individual clients.

Despite a history of bad loans and poor management, investors snapped up ICBC's IPO and have bought its shares since, seeing it as a good way to profit off of the country's roaring economic growth.

ICBC's share price has risen steadily since the listing, and then jumped 30 percent in the last week of the year.

It was the third of China's so-called Big Four banks to list sell overseas IPOs. China Construction Bank Corp. was the first in 2005 when it listed a $9.2 billion. Bank of China Ltd. followed in June with a US$11.2 billion offering.

Related acticle: ICBC shares soar after record IPO

Madrasah Education Development Project

Asian Development Bank, November 2006

The Project supports the Government’s efforts to improve madrasah education so it meets national education standards, within the Government’s broader education policy and strategic framework. The Project will cover primary, junior, and senior secondary private and public madrasahs in 27 poor districts of Central Java, East Java, and South Sulawesi provinces.

The Project will benefit 120,000 students in 500 madrasahs.

The Project will support a mixture of demand- and supply-side interventions to enable project madrasahs to (i) improve teacher professionalism; (ii) upgrade teaching–learning resources and facilities; (ii) increase their internal efficiency; and (iii) strengthen their governance, management, and sustainability.

The Project will help madrasahs meet national education standards according to the needs identified in madrasah development plans, through a range of interventions, including teacher qualification upgrading and professional certification, provision of substitute teachers, and teaching skills development; upgrading or expansion of facilities (classrooms, libraries, and laboratories); and provision of teaching–learning materials. These interventions will be selected by individual madrasahs according to their development needs.

The Project will enhance the internal efficiency of project madrasahs by increasing enrollment, decreasing dropout and repetition rates, and increasing completion rates at all levels through remedial and scholarship programs, particularly for poor and female students.

Governance, management, and financial sustainability of project madrasahs will be improved through training and performance-based madrasah development planning and management, and advocacy programs to enhance the perception of madrasah education quality and encourage stakeholder participation to ensure better resource mobilization and transparency.

Read More : Madrasah Education Development Project (Indonesia) [PDF]

Dutch foreign minister visits Indonesia

ANTARA News - 2006-12-18 10:20:58

Jakarta, December 16, 2006 (ANTARA News) - Dutch Foreign Affairs Minister Bernard Bot is scheduled to visit Indonesia from December 16 to 19, 2006 to strengthen bilateral relations between the two countries, media reports said here on Saturday.

Indonesian Foreign Affairs Minister Hassan Wirajuda was expected to receive his Dutch counterpart in Bali where the Dutch minister would lay a wreath at the memorial for the more than 200 victims of the bomb attack in 2002. Four Dutch nationals were killed in the bombing.

From Bali, Minister Bot would visit Yogyakarta accompanied by Minister Hassan Wirajuda. They would sign a letter of intent in Yogyakarta on Monday. Bot is expected to arrive in Jakarta on Tuesday (Dec.19).

Bot`s visit would be an informal one at the invitation of Hassan Wirajuda, who made a two-day visit in the Netherlands in August 2006. Bot visited Jakarta to attend Indonesia`s Independence Day celebration in August 2005.

The Netherlands colonized Indonesia for about 250 years until 1945 when Indonesia declared its Independence on August 17, 1945.

The Netherlands Education Center (NEC) had intensified the promotion of education cooperation with Indonesia by offering scholarships to Indonesian students and holding Holland Education fairs in Surabaya (East Java), Bandung (West Java), Yogyakarta, and Jakarta.

RI mulls new standards to curb sales of low-quality products

Andi Haswidi, The Jakarta Post, Jakarta

Responding to the complaints from the electronics industry about the mushrooming of potentially hazardous, low-quality goods, the government is currently preparing the launch of a quality standard to prevent such poor quality goods being sold.

"Indonesia has become a junkyard for electronics goods. There is a need to protect the industry from the overabundance of low-quality products that are mostly illegally imported so that the local industry can improve," the Industry Ministry's electronics director Abdul Wahid told The Jakarta Post on Monday.

"The ministry has taken steps with a view to introducing electronic products standardization. So far, the plan is going well," he added.

Abdul said that the ministry was currently studying the possibility of adopting the European categorization of hazardous electronic substances, known as the Restriction of Hazardous Substances (RoHS) directive, was first implemented in 2003.

"Many nations have implemented the RoHS. Indonesia should too, he said but admitted that no timeframe had been agreed as yet.

The RoHS sets out a constantly updated list of hazardous materials that should not be used in electronic and electrical equipment. Currently the list consists of 20 restricted materials, including mercury, cadmium, hexavalent chromium, poly brom and lead.

Many of the restricted materials listed on the RoHS can cause long-term brain damage, decreasing memory capability, kidney problems and liver problems.

Abdul also said it was planned to establish two standards laboratories, one in Bandung for consumer goods and the other in Surabaya for components standardization.

"The procurement of equipment for the laboratory has already been completed. We hope that the laboratory will be fully erected some time next year," he said

Low purchasing power has contributed greatly to the flourishing trade in low-quality products, which are mostly illegally imported from China.

According to an industry source, electronics goods illegally imported from China have taken nearly 40 percent of the domestic electronics market.

According to the ministry, Indonesian electronics manufacturers, which mostly still rely on imported raw materials, face strong competition not only at home but also overseas.

According to the ministry's data, Indonesia's exports of electronics goods are the lowest in Southeast Asia. In 2004, Indonesian electronics exports reached only US$7.9 million in 2004, while those of the Philippines were worth $24 million, Singapore $41 million and Malaysia $63.5 million.

The industry also suffers from high dependence on imports as around 50 percent of main raw materials are still being imported and around 60 percent of molds are manufactured outside the country.

In 2005, the country's electronic exports fell to $7.65 million from $7.9 million in 2004. While at home, the industry was only able to meet 36 percent of the total demand which reached about $2.4 billion in 2005, with the rest being fulfilled by imported products, mostly brought into the country illegally.

Abdul said that the ministry had already established a team to monitor the market with some of its members being deployed to Makassar, South Sulawesi and Surabaya.

"This month we will have a more up-to-date picture regarding the extent of illegally imported electronic goods in the market," he said.

Abdul said that after the assessment was complete, he would work with the Customs and Excise Office to identify the points where the illegal imports were entering the country.

Foreigners Invade Local Banks Indonesia

Tuesday, 12 December, 2006 | 15:41 WIB

TEMPO Interactive, Jakarta: Foreign banks are more eager to buy banks in Indonesia. Currently Bank Indonesia (BI) has received plans from the Commonwealth Bank (Australia) which will acquire PT Bank Artha Niaga Kentjana and the Bank of India to take over PT Bank Swadesi.

“They will take 50 percent of the shares, not 100 percent considering that local shareholders are still necessary,” said Siti Ch. Fadjrijah, BI Deputy Governor, yesterday (11/12).

Several investors from the Middle East have previously conveyed their interest in buying banks in Indonesia. They especially aim at syariah banks or conventional banks that have syariah units.

In addition to Al-Barakah, which is interested in taking over a bank in Indonesia, according to Fadjrijah, BI has met with Sedco. This Saudi Arabian investor now has 21.2 percent of shares of Bank Muamalat.

“Sedco has two plans: to add capital at Bank Muamalat or to buy one of local banks to be merged with Muamalat Bank into one syariah bank,” she said. The Kuwait Finance House, which has sold its interest, according to Fadjrijah, has not so far realized its plan.

The Bank of India has signed a conditional sale and purchase-shares agreement to acquire 76 percent of Bank Swadesi’s shares, in Jakarta yesterday.

The large number of small banks in Indonesia acquired by foreign banks is related to BI’s banking consolidation policy--that compels a bank’s minimum capital to be Rp80 billion by the end of 2007 and Rp100 billion by 2010.

Until now, it is listed that several small banks’ ownerships have been taken over by foreign banks, such as Bank Haga and Bank Hagakita that have agreed to be acquired by Rabobank International, one of the corporation banks from the Netherlands.

Bank Nusantara Parahyangan has been approached by Japanese investor Acom Ltd. and the consortium of Bank of Tokyo, Mitsubishi and UFJ Ltd—with the agreement being signed on November 27 by the shareholders.

The Industrial and Commercial Bank of China, the biggest bank in China which has recently obtained a large sum from the Initial Public Offering (IPO) last month, is also completing negotiations with Bank Halim from Surabaya, owned by the Gudang Garam group.

SURYANI IKA SARI | RR ARIYANI

South Korea's SK sees a lot of potential in Indonesia

Ika Krismantari, The Jakarta Post, Jakarta

A high-ranking delegation of South Korea's third largest company SK led by chairman Tae Won Chey visited Indonesia recently to explore new business opportunities in the country.

Already engaged in 14 countries with its core business in energy and telecommunications, SK is committed to further strengthening its global presence.

With a workforce of about 25,000 employees, SK booked a total revenue of about 60 trillion won (about US$65.3 billion) at the end of 2005.

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