ASEAN Affairs Forum

[nufix]

Indonesia offers 'new wave' of opportunity

Surabaya, East Java Provincial Capital.

Indonesia is at the early stages of a period of strong economic growth, creating a wave of new middle-class and affluent consumers (MACs) that will grow in both size and purchasing power through 2020, says the Boston Consulting Group (BCG).

With the fourth-biggest population in the world, a stable political climate and strong local demand, Indonesia's economy is currently growing at 6.4 per cent a year. Such growth is lifting millions from lower-income socioeconomic levels into the MAC categories. The number of MACs in Indonesia is projected to double between 2012 and 2020, from 74 million to 141 million. At that point, the island of Java alone will have more MACs than the entire population of Thailand.

During that period, some 8 million to 9 million people will enter the middle class each year.

"These consumers are the sweet spot of this market," said Vaishali Rastogi, a BCG partner.

"They're beginning to move beyond basic necessities to products that offer greater convenience and comfort, such as home durables, white goods, cars and financial services," said Rastogi.

BCG has found out that Indonesian consumers tend to be extremely family oriented, and as they move from lower-income classes into the middle and affluent classes, they are more likely to buy things that improve living conditions for their families than splurging on themselves. Some 63 per cent say they never spend on themselves until the needs of the family have been met (compared with 46 per cent in China).

Such findings point to categories in which consumers would be willing to trade up as they enter the MAC segment, such as education, home renovations, consumer durables and health care.

Similarly, it has also been found out that even when MACs splurge on big-ticket items, they justify their purchases by focusing on functional benefits. For example, home durable products are viewed as long-term investments. Consumers justify the purchase of DVD players and flat-screen televisions as a way to save money on going out to the movies.

"This has implications for the way that companies market their products," said BCG partner Dean Tong.

"Because functionality is so crucial, brand name recognition and clear messaging regarding product features will become increasingly important," said Tong.

Companies must also understand if they are to effectively reach MACs, says the report. The MAC population is becoming more dispersed. Indonesia currently has 12 cities millions of MACs. By 2020, however, this number will roughly double, to 22, (including emerging cities such as Palembang, Makassar, Batam, Semarang, Pekanbaru and Padang).

"Companies that are currently reaching 50 per cent of the MAC base will need to double their regional presence if they want to maintain the same level of reach," said another BCG partner Eddy Tamboto.

"They will need to think about how they operate and scale up, how they organise their sales forces and supply-chain networks and how they distribute goods to address demand in the lower-tier cities that they might have overlooked before," he said.

Indonesia offers 'new wave' of opportunity | IR News | Inside Retail Asia



These cities will likely follow what China did, dispersing the economic center onto each region, thanks China for the lesson.

 

[nufix]

Two Indonesian Cities (Jakarta & Bali) Top Global Cities Property Performance Rate as a result to the high jump on people's spending power.

Indonesia second China in The Total Increase of Billionaires by 2022.

The Wealth Report 2013: Examining High Net Worth Individuals from around the world - YouTube

 

[Viet]

not too bad Indonesia! Congrat

 

[nufix]

08 MAR 2013 | PROPERTY


Jakarta Most Appealing Property Investment in Asia Pacific

Kuningan Central Business District, South Jakarta (02/13)

JAKARTA – Jakarta places the first as city with the most prospective property sector investment across Asia Pacific in 2013, Urban Land Institute (ULI) and Pricewaterhouse Cooper (PWC)’s surveys reports. Jakarta shifts Singapore to the third place, from last year’s first position.s

On the scale of one to nine, Jakarta’s highest property investment prospect across the region stands at 6.01 points, higher than other largest cities, including Shanghai (5.83), Singapore (5.78), Sydney (5.69), Kuala Lumpur (5.68), Bangkok (5.67), Beijing (5.65) and Osaka (4.82).

Jakarta Most Appealing Property Investment in Asia Pacific - Indonesia Finance Today

 

[nufix]

RI women deemed most assertive in SEA
Mariel Grazella, The Jakarta Post, Jakarta | Headlines | Fri, March 08 2013, 12:19 PM
A- A A+
Paper Edition | Page: 3

Indonesian women professionals have outdone their Southeast Asian peers in proactively demanding pay raises and promotions, a move that has borne highly favorable results to their careers, a recent study on women and the workplace reveals.

The yearly study, conducted by global consulting firm Accenture, involved 500 professional women across Indonesia, Singapore, Malaysia, Thailand and the Philippines.

Accenture conducted the study, titled “Defining Success Your Way”, to mark the annual International Women’s Day (IWD), which falls every March 8.

Neneng Goenadi, executive director of PT Accenture Indonesia, said the objective of the study this year was comprehending the way women “defined success in their lives and careers”.

“It’s more than just balancing, you need to integrate your work and life to attain satisfaction,” she told The Jakarta Post in a limited report result release on Thursday.

She added that a striking difference this year was that women were as assertive as their men colleagues in demanding pay rises and promotions.

The study found that 80 percent of the respondents asked for a raise and another 73 percent requested promotion. These percentages have outdone results from other Southeast Asian countries.

Thailand is the first runner up in both categories with 53 percent of respondents having asked for a raise and 43 percent saying they have requested a promotion.

The voicing of career needs by Indonesian women professionals did not fall on deaf ears. Only 5 percent of those who asked for raises ended up empty-handed. The remaining women were rewarded with various forms of raises and incentives.

Meanwhile, 15 percent of respondents requesting a promotion received new and better roles, with another 59 percent given new, sometimes unexpected, roles.

Neneng noted that the assertiveness women exhibited in the workplace benefited companies, especially the human resource team, in gauging employee needs.

She said workplaces had to implement systems that enabled a work-life balance, given the premium professionals placed on it.

As many as 76 percent of respondents said they would turn down jobs offering a poor work-life balance with another 81 percent placing an importance on flexible work schedules. Another 63 percent defined career success through the attainment of work-life balance.

“Facilitating this integration can be done in a myriad of ways, from providing day care facilities in offices to allowing a certain period of time working remotely from the office,” she said.

Neneng added that a new feature in the study this year was the element of technology. A majority of respondents, 90 percent, said that technology had allowed them to keep flexible schedules.

“Another new thing is that a majority of women — 58 percent — admitted that they were workaholics,” she noted.

RI women deemed most assertive in SEA | The Jakarta Post

 

[EastSea]

Suu Kyi's Party Confronts Transition Pangs
On the Agenda as Now-Aging Opposition Members Convene: How to Morph Into a Viable Contender to Govern Myanmar

YANGON—As Aung San Suu Kyi's opposition party seeks to morph from a symbol of defiance into a party that can actually govern Myanmar, it finds itself hobbled by an aging leadership and sniping from former supporters over compromises it has begun to make.

Members of the National League for Democracy, Aung San Suu Kyi's opposition party, meet at the headquarters in Yangon on Wednesday.

Admiration for the party rests almost solely on the role and leadership of Ms. Suu Kyi, and analysts note the lack of a new generation of leaders capable of succeeding her. Many current party leaders are in their 70s and 80s, and Ms. Suu Kyi is 67 years old.

"Decision-making and influence within the party has been very much centered upon one individual. Even very senior party members defer to [Ms. Suu Kyi], unwilling to take decisions without consulting her," said Daniel Gelfer, a director at political consultancy Vriens & Partners in Myanmar.

With Ms. Suu Kyi often on the road and meeting with leaders overseas, "this is unsustainable," he said.

At a three-day event in Yangon, 900 party members from across the country will choose the party's new core leadership and central committee—the team that will take on President Thein Sein's reform-minded cabinet, composed mostly of former generals, in the next elections. Party leaders will also set the NLD's policy priorities.

Party leaders say they are focusing on pushing the current government to be more transparent to rid the country of corruption. They also want to change the 2008 constitution to remove the enshrinement of political power for Myanmar's military.

There is no question that the party is seen as the main challenger to Mr. Thein Sein's government in 2015: In the 2012 by-elections, the NLD won 43 out of the 44 seats contested. Still, the party has fewer than 10% of Parliament's more than 600 seats, held largely by current or former soldiers linked to Myanmar's military regime.

Many of the country's 60 million citizens revere Ms. Suu Kyi and her party to a large degree because of her father, Gen. Aung San, who was widely considered a nationalist hero and the key figure in the country's independence from British colonial rule. Ms. Suu Kyi is also celebrated for standing up to the military in a pro-democracy uprising in 1988. It was bloodily suppressed, and she spent most of the next 21 years under house arrest. Refusing a standing offer to leave the country to keep the spirit of opposition alive, she won the Nobel Peace Prize in 1991.

But the party was slowly eviscerated by arrests and members drifting away after the military refused to honor NLD wins in parliamentary elections in 1990. Now, to be viable as an opposition force, leaders need to find a new generation to replace them in the coming years.

"There must be change, there must be a fresh crop of youth," said U Tin Oo, the party's deputy leader and a former political prisoner once detained with Ms. Suu Kyi. "I myself will be 87 in two years, when it comes to election time." Mr. Tin Oo said that training younger members of the party, as well as pushing for more women to assume leadership roles in the NLD, is a priority though he says that in townships farther away from Yangon, older members often feel they deserve leadership roles because of their experience with persecution under military government. "Sometimes the older members think the new generation did not share the same experience as them," he said.

The opposition party is also increasingly drawing flak from human-rights groups and observers who say it has moved too far away from its founding principles, remaining silent or relatively uncritical of outstanding abuses and ethnic strife in the country.

Ms. Suu Kyi, for example, chose not to take sides on the issue of violence between Muslim Rohingyas and the majority Buddhists in Rakhine state, where dozens of Rohingyas died and more than 100,000 were displaced from their homes.

"Aung San Suu Kyi and the NLD gained great moral authority through years of resistance to military rule and human-rights abuses," said Phil Robertson, deputy director for the Asia division of Washington-based Human Rights Watch. "But in the rush to play politics, they risk squandering precisely those principles of protecting rights for all that made them so special."

Others say that Ms. Suu Kyi and her party are simply being realistic, balancing the myriad priorities facing the nascent political party in a fast-reforming country. Ms. Suu Kyi has gone out of her way to not offend the army, refraining from criticizing their actions in Kachin state, which saw heated conflict and unprecedented shelling earlier this year. NLD leaders and some analysts say, though, that the party is seeking the most constructive way forward in working with the country's leaders.

"We understand that many of the generals are still the same people, in civilian clothes," said Mr. Tin Oo, "But we have to be practical. We had been conflicting for 25 years, and where did that get us? We need to focus on some win-win policies and work together, not zero-sum games." Mr. Tin Oo says many longtime democracy activists like himself are already seeing improvements internally, are able to move freely and regroup politically, though human-rights issues—especially when concerning ethnic minorities—still "needs improving."

Some businesses, too, privately worry that while Mr. Thein Sein's ruling ministers are actively engaged in the country's sweeping process of economic and social reforms—including in drafting the new foreign-investment law, speaking with foreign businesses and working toward modernizing some of Myanmar's most antiquated industries—opposition leaders are only just finding their footing politically and would be unprepared to assume ministerial positions in 2015.

Sean Turnell, an economist from Sydney's Macquarie University and a personal adviser to Ms. Suu Kyi on economic policy, says while he remains impressed by her "natural and intuitive feel for good economic policy," he has "reservations" about some of the leaders below Ms. Suu Kyi.

Questions remain on whether the army-drafted 2008 constitution will actually be changed before the 2015 elections. Currently, Ms. Suu Kyi is prohibited from becoming president because her family members are foreign citizens. Mr. Thein Sein has promised to form a committee to look into changes and has said he would accept Ms. Suu Kyi's bid for the presidency if she does run.

But changes would require the support of at least 75% of parliament, still largely constituted of former generals. The changing role of the military under the democratizing government is still unclear, even to longtime observers. But they have so far remained compliant with Mr. Thein Sein's reforms.

A version of this article appeared March 7, 2013, on page A14 in the U.S. edition of The Wall Street Journal, with the headline: Suu Kyi's Party Confronts Transition Pangs.

 

[nufix]

Semen Indonesia Eyes To Acquire Cement Factory In Myanmar

Semen Padang, a subsidiary of Semen Indonesia

MALANG: After successfully acquired Thanglong Cement Vietnam, PT Semen Indonesia Tbk is eyeing to acquire a cement factory in Myanmar.

Semen Indonesia Marketing Director Amat Pria Darma said acquisition plan of a cement factory in Myanmar is still under internal evaluation.

"The problem is the current political situation in Myanmar which is still volatile. Thus, it’s not profitable to invest under such circumstances. Political turmoil obviously has negative impact on economic growth," he said during Fun Bike Carnival Fresh and Fun in Malang, East Java, Sunday (3/3).

According to him, the acquisition process of Thang Long Cement plant, Vietnam, has been completed. PT Semen Indonesia has invested IDR1.5 trillion.

With such large investment, PT Semen Indonesia holds 70% of Thang Long Cement shares. The cement production capacity reached 2.3 million tons which is mainly used to meet domestic consumption.

However, if there is an excess production, the cement can be exported to neighboring countries such as Singapore and Bangladesh. (k24/T07/tw)

Semen Indonesia Eyes to Acquire Cement Factory in Myanmar - Bisnis.com

 

[Viet]

Vietnam´s PM opens ASEAN-EU Business Summit


Updated : 3/9/2013 1:07:15 PM
Voice of Vietnam

(VOV) - Prime Minister Nguyen Tan Dung has delivered an important speech to the third ASEAN-EU Business Summit (ASEAN-EU 2013), opened in Hanoi on March 9.

The summit is part of the 19th ASEAN Economic Ministers’ Retreat and the 12th ASEAN Economic Ministers and EU Trade Commissioner (AEM-EU) Consultations.

The summit’s participants also included EU Trade Commissioner Karel de Gucht, Minister of Industry and Trade Vu Huy Hoang, ASEAN Secretary-General Le Luong Minh, and 600 representatives from leading ASEAN and EU businesses.

In his speech, PM Dung described the summit as a good opportunity for the ASEAN and EU business communities to foster cooperation and connectivity and pass on their recommendations to ASEAN and EU management agencies.

The event is especially signifcant as ASEAN nears fulfilling the goal of building its community by 2015 while economic relations between ASEAN and the EU continue to develop.

The establishment of the ASEAN community, the regional body’s foremost priority, depends on the crucial pillar of the economic community. It will engender favourable conditions for investment capital circulation and trade exchange, creating business operation expansion opportunities and greatly benefiting the more than 600 million ASEAN people.

In conjunction with building the economic community, ASEAN is sparing no effort to deepen its integration with regional and global partners. Enhancing cooperation with the EU in the name of sustainable development and prosperity is a major focus.

The trade and commercial cooperation between the two blocs has grown steadily in spite of global economic doldrums. The EU is ASEAN’s second biggest trade partner and the source of its biggest foreign investment inflow. ASEAN is the EU’s third biggest trade partner.

The EU has also provided most of the technical support ASEAN received for its common development target and its experience has proven very valuable during ASEAN’s community-building process.

Dung said that as the coordinator of ASEAN-EU economic cooperation, Vietnam always supports propelling ASEAN-EU trade and investment to new heights. The EU and a number of ASEAN member states including Vietnam are accelerating bilateral free trade area (FTA) agreement negotiations that will serve as firm foundations for future comprehensive ASEAN-EU cooperation.

Vietnam welcomes and wants to encourage the business community’s involvement in ASEAN’s and the EU’s combined efforts to strengthen the relationship between the two blocs.

 

[nufix]

Rupiah Investment Offers The Most Attractive Return in Asia

IDX Jakarta Stock Exchange Building

JAKARTA – Return on investment in financial assets in the form of rupiah, seen in the uncovered interest parity as of February 2013 was higher than the other countries in Asia, according to the data of Bank Indonesia. This shows that Indonesia is one of the destinations of foreign fund placement that provides attractive return.

Bank Indonesia’s Monetary Regulation Review as of March 2012 showed that since last year, Indonesia’s uncovered interest parity has rebounded. Indonesia’s return stands at 4.5 percent, higher than Philippines’ 0.5 percent, South Korea’s 2.5 percent and Malaysia’s three percent.

Rupiah Investment Offers The Most Attractive Return in Asia - Indonesia Finance Today

 

[nufix]

Volkswagen to Start Investing in Indonesia

German-based carmaker Volkswagen will begin investing in Indonesia as part of its expansion plans, Industry Minister M.S. Hidayat announced on Monday.

The government has given Volkswagen permission to invest in Indonesia, Hidayat said, adding that the company agreed to the requirements the state asked them to fulfill, including joining a domestic partnership and using national components.

He told reporters that the auto manufacturer will start realizing their plan in early 2014.

“I told them that as long as they follow the regulations, I will give them the green light,” he said as quoted by Republika.co.id.

The scheme was set into motion after President Susilo Bambang Yudhoyono met with Volkswagen executives during his visit to Berlin last week.

The company expressed their interest in investing in Indonesia in 2012, saying that it wanted to open a $140 million manufacturing plant with a production capacity of 50,000 units per year.

The industry minister stated that the move would be financially beneficial for the country. He noted that Volkswagen had exceeded its production capacity in Japan, so it wants to expand further in Asia.

“That shows that VW is very popular and they want to pass that on to Indonesia,” he said.

Hidayat said Volkswagen will partner up with Indomobil Sukses International, the country’s second-largest auto distributor after Astra International.

 

[nufix]

Road Building to Drive Sales of Heavy Trucks in Indonesia
Dion Bisara | March 11, 2013

Increasing demand due to infrastructure improvement, fleet rejuvenation and lively domestic trade will drive up sales for medium and heavy-duty trucks in Indonesia, said Munich-based consulting firm Roland Berger Strategy Consultants.

Market value for the trucks — defined as vehicles at more than six tons gross weight — will reach $3 billion over the next two years, from $2.5 billion last year, the firm said.

“Improvements in infrastructure would be driving that demand,” Roland Berger’s managing partner for Southeast Asia, Joost Geginat, told the Jakarta Globe last week.

Better roads and an expanded toll road network, Geginat said, would allows trucks with larger load capacities to operate and provide more efficient modes of transportation for businesses.

The government has been committed to boosting infrastructure projects across the country.

In May 2011, Yudhoyono outlined an economic development master plan, known as MP3EI, that calls for $413 billion in investment in roads, ports, bridges, airports and manufacturing centers. The plan aims to catapult the country into the ranks of the 10 biggest economies in the world by 2025.

The country has been growing by more than 6 percent annually over the last three years, with domestic consumption accounting for more than 50 percent of the $850 billion economy. “That means that more goods [will need] to be transported within the country,” Geginat said.

New trucks are also replacing the old ones, Geginat said, as many companies in Indonesia will need to cope with tighter emissions and overloading restrictions. “The trucks are getting old and there will be a lot of modernizations,” he said.

The Environment Ministry has set a deadline for new motorcycles to apply Euro III emission standards by Aug. 1, 2013. Other vehicles are still using Euro II standards, but officials said it might be raised in the future.

Bambang Brodjonegoro, head of fiscal policy at the Finance Ministry, said that the government was mulling a plan to impose an emissions excise on sub-standard vehicles. “But we are still studying what standards will be used,” he said last week.

Medium and heavy truck sales in Indonesia reached 143,255 units last year, up 19 percent from a year earlier, according to data from the Indonesia Automotive Industry Association (Gaikindo). Medium and heavy duty trucks accounted for 46 percent of truck sales. The larger portion of sales are light trucks and pickups, the data showed.

Geginat said that Indonesia’s truck market is still dominated by Japanese original equipment manufacturers with their budget trucks, including the Mitsubishi Fuso Canter, Toyota Dyna, and Hino Dutro.

Those OEMs benefit from established local production, high levels of local content and an extensive after-sales services network, he said.

Western OEMs looking to enter the Indonesia market, Geginat said, are aiming for the premium truck segment, offering higher capacity with more efficiency, safety features and superior emissions standards.

 

[nufix]

Bali Infrastructure Project On Schedule
BY MUHAMMAD RINALDI

Benoa Floating Toll Road, one of infrastructure project in Bali.

JAKARTA - Commission V of the House of Representatives hoped that Dewa Rutji intersections underpass project can be completed on time. The Commission also hoped that Nusa Dua - Ngurah Rai - Benoa toll road as handled by PT Waskita Karya Tbk (WSKT) can be completed according to schedule.

Laurens Bahang Dama, Head of Commission V, said that the projects should be completed prior to the APEC Summit in November. He said progress for each project has reached 83 percent.

Bali Infrastructure Project On Schedule - Indonesia Finance Today

 

[nufix]

JCI's Performance Correlates with Global Stock Exchanges
BY DONNY SUSILO & FIRDAUS NUR IMAN

JAKARTA – Movements of the Jakarta Composite Index (JCI) have high correlation with the movements of the global benchmark stock indexes in the first three months of 2013. Investors have created this as solid basis to decide on the appropriate measures in investment.

Muhammad Alfatih, senior technical analyst from PT Samuel Sekuritas, said the movements of the JCI in early 2013 were in line with the movements of the Dow Jones Industrial Average (DJIA), Hang Seng Index (Hong Kong) and NIKKEI Index (Japan). The high growth of the JCI on a year to date follows the growth of the three benchmark indexes.

JCI's Performance Correlates with Global Stock Exchanges - Indonesia Finance Today

 

[nufix]

Indonesia's Pertamina Partners With Thai Petrochemical on $5 Billion Project
Tito Summa Siahaan | March 13, 2013

State-owned energy company Pertamina has chosen Thailand’s PTT Global Chemical as a partner in the development of a $5 billion petrochemical facility in Indonesia, it announced on Monday.

The decision was made after months of deliberations with 11 companies being considered, including South Korea’s SK Global Chemical and Japan’s Mitsubishi.

“PTT Global Chemical is a company with a global reputation in [the] petrochemical sector,” Karen Agustiawan, Pertamina’s president director, said in a statement.

“The partnership between both companies is expected to not only build petrochemical plants” but also to involve marketing and research and development to gain market share across Asia, Karen said.

She added that Pertamina planned to make petrochemicals a key part of its business as it strived to become a regional leader by 2025.

The partnership with PTT will center on the construction of a petrochemical plant with an annual production capacity of 250,000 tons of ethylene and 350,000 tons of polypropylene — materials key for producing plastic.

It will also produce each year 400,000 tons of polyethylene (plastic) and polyvinyl chloride, which is widely used as a construction material.

The companies will commence a feasibility study for the construction of the plant soon, with an agreement due to be signed early next month. A joint venture will be established in December, ahead of the plant’s construction next year.

Hanung Budya, Pertamina’s marketing director, had previously said that Pertamina and its partner planned to invest “no less than $5 billion” in the construction of the plant. He added that Pertamina must at least control a 51 percent ownership in the joint venture.

The petrochemical plant is expected to go on stream in 2017, with Pertamina aiming for a 30 percent market share at that time.

PTT owns the largest petrochemical facilities in Thailand, with an annual capacity of 8.2 million tons, using advanced technology and high energy efficiency. Pertamina has the largest oil refinery assets in Southeast Asia.

The facility will be built near one of Pertamina’s existing oil refineries in Balongan, West Java; Plaju, South Sumatra; and Tuban, East Java. The company has not yet decided which location to use.

Karen, head of Pertamina since 2009, had her term extended “temporarily” by the national government last week.

 

[nufix]

edited wrong section