Marubeni, Doosan unveil expansion plans in Indonesia
Linda Yulisman, The Jakarta Post, Jakarta | Headlines | Thu, January 17 2013, 11:07 AM
Buoyed by Indonesias strong economic fundamentals, two major foreign companies, the Marubeni Corporation of Japan and the Doosan Group of South Korea, plan to further expand their business in Southeast Asias largest economy.
Marubeni Corporation president and CEO Teruo Asada and Doosan Group chairman Yongmaan Park unveiled their business expansion plans during a meeting with Industry Minister MS Hidayat in Jakarta on Wednesday.
Speaking to reporters following the meeting, Hidayat said that Marubeni intended to join state-owned electricity company PLNs tender for the development of a 660-megawatt (MW) power plant.
The firm has completed the 660 MW project in Cirebon [West Java] and it will participate in the bidding for a geothermal [power plant] project that will generate 1,000 MW, he added.
Marubeni, through its subsidiary, Cirebon Electric Power (CEP), commenced operations at the first coal-fired power plant (PLTU) in Cirebon, West Java, last October. The plant operates as an independent power producer (IPP), which sells its electricity production to PLN.
The plant, built with an investment of US$850 million, produces 660 MW of electricity for Bali and Java islands.
Marubeni controls 32.5 percent of shares in CEP, while the remainder belongs to the Korea Midland Power Corporation (27.5 percent), Koreas Samtan Corporation Ltd. (20 percent) and local publicly listed firm Indika Energy. Under the IPP mechanism, PLN will buy electricity from the power plant at 4.43 US cents per kilowatt-hour (kWh).
In November last year, Marubeni through the Supreme Energy Rantau Dedap (SERD), a company it established with local player Supreme Energy and Frances GDF Suez SA, sealed a power purchase agreement with PLN. SERD will build a geothermal power plant in Rantau Dedap, South Sumatra, which will supply 220MW. The plant is slated to come into commercial operation in 2016.
Marubeni would also look into developing water treatment plants in Jakartas regions with local and foreign partners, Hidayat said, adding that it would study the governments offer to enter the machinery sector and shipping industry.
I told them [Marubeni executives] we needed investment for machinery, especially for the textile industry, and also shipyards where demand is high, he said. Indonesias textile industry is struggling with inefficiency resulting from high energy costs, partly due to the use of outdated machines.
Many of the 1,500 textile firms nationwide urgently need to replace their production equipment, and the government has intervened in recent years with a textile machinery revitalization program.
The country has also seen the number of ships jump from 5,000 to 11,000 in the past five years, but there are only 220 shipyards to meet the demand, leaving ample room for development.
The Industry Ministrys director general for high-priority industries, Budi Darmadi, said that Koreas Doosan Group, which showed expertise in the production of heavy equipment and marine diesel machinery, had expressed an interest in strengthening its presence in Indonesia.
Doosan, which is well-known for a wide range of heavy equipment, such as articulated dump trucks and excavators, is currently marketing its products through local distributors; it has yet to open a production facility in Indonesia.
We are offering them the chance to meet the demand that we currently source from imports, such as heavy dump trucks, Budi said.
Marubeni, Doosan unveil expansion plans in Indonesia | The Jakarta Post
RI biggest winner in Japanese stimulus
The Jakarta Post, Jakarta | Headlines | Thu, January 17 2013, 10:59 AM
Indonesia tops the list of nine Asian countries that will reap benefits from the economic reforms recently unveiled by Japanese Prime Minister Shinzo Abe in his bid for stronger domestic demand and a weaker yen, Credit Suisse says.
In its research note released on Wednesday, the Switzerland-based bank says Indonesia will be the country that gains most from the expected economic recovery in Japan. It puts South Korea at the bottom of the ranking as the most vulnerable economy due to its export competition with Japan.
Since Indonesia exports a lot of end-user products such as commodities mainly mineral fuels and lubricants to Japan, it will benefit from a potential pick-up in Japans domestic demand, Singapore-based Credit Suisse economist Santitarn Sathirathai said in an email interview on Wednesday.
Abe, who is scheduled to meet President Susilo Bambang Yudhoyono in Jakarta on Friday, recently unveiled an economic stimulus and monetary easing package as part of his plan to revive Japans economy, which has long been trapped in a deflationary spiral.
His economic reforms include a ¥10.3 trillion (US$116 billion) stimulus that the Japanese government claims will boost its gross domestic product by 2 percent and add 600,000 jobs.
With regard to the monetary side, Abe has ordered the Bank of Japan to double its inflation target to 2 percent, calling for bold leadership at the central bank.
According to Credit Suisse, Indonesia will surpass Malaysia and Thailand in benefiting from the Japanese reforms because of its roles as both a supplier and consumer for Japan. Malaysia and Thailand also export a substantial volume of goods to Japan, but their imports are of less significance.
Japan is Indonesias second-biggest export destination after China, accounting for 11.3 percent of Indonesias total non-oil and gas exports worth $15.9 billion during the January-November period in 2012.
Japan is also Indonesias second-biggest source of foreign direct investment after Singapore, with Japanese companies realizing $1.8 billion in investments in the January-September period last year.
Satirathai said that because Southeast Asias largest economy imported many intermediate goods from Japan, the expected weaker Japanese yen would make the goods cheaper and, consequently, benefit Indonesia.
Analysts have said that Abes economic policies will eventually result in a weaker yen, a situation that is good for Japans economy as the currency has been too strong for too long, undermining that countrys trade competitiveness.
As of Jan. 16, the Japanese yen had already depreciated by 13 percent against the US dollar from its peak in September, a change that was described by Credit Suisse as dramatic.
Credit Suisses report also notes that Southeast Asian economies, including Indonesia, are also likely to benefit from Japans rising political tension with China, given the expectation that Japanese companies will turn to the region to expand their manufacturing facilities. (sat)
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