Indonesia Economy Forum

[Nike]

Food and beverage industries contributed highest to exports: minister
23rd Jul 2020 15:50

Jakarta (ANTARA) - The food and beverage industry continued to make the largest contribution to exports in the manufacturing sector, with US$13.73 billion and $10.87 billion of exports respectively during the first semester of 2020.

"Food and beverage industries registered a high demand during the COVID-19 pandemic. This is since people are looking to consume nutritious food to boost their immunity," Industry Minister Agus Gumiwang Kartasasmita noted in a statement here on Thursday.

Kartasasmita pointed out that small- and medium-scale enterprises dominated the country’s food and beverage industry, so it can become a backbone for the country's economy.

"In accordance with the Making Indonesia 4.0 roadmap, we have set a target for Indonesia's food and beverage industry to dominate the Southeast Asian market," Kartasasmita stated.

Some food and beverage products already have a potential market abroad, such as instant noodles in African nations. To this end, the ministry has encouraged market expansion and export-oriented product diversification.

In the basic metal industry, the improved added value of natural resources has augmented foreign exchange revenue from exports. Moreover, this has breathed new life into the industry to absorb workers, he remarked.

With its position as the mother of industries -- as its products have been used as raw materials for other sectors, such as automotive, maritime, and electronics -- the basic metal industry has also served as the backbone for the country's economy.

"We are encouraging the metal industry to enter the Industry 4.0 through the application of digital technology. This is aimed at boosting productivity and quality. Industry 4.0 is not aimed at reducing workforce but instead to improve the added value of human resources," he expounded.

During the period from January to June 2020, the export value of manufacturing products had touched $60.76 billion, or 79.52 percent of the total exports of $76.41 billion.

"We will continue to maintain the momentum by accelerating the stimulus for the manufacturing sector in the second semester of 2020. This could encourage the export-oriented industry to increase its production capacity," Kartasasmita explained. Related news: Ministry holds business-matching event to boost exports to Canada
Related news: Ministry encourages farmers to develop eel farming

Translated by: Sella PG, Sri Haryati
Editor: Rahmad Nasution
https://en.antaranews.com/news/1529...tries-contributed-highest-to-exports-minister

 

[Nike]

Bukan Mimpi di Siang Bolong, RI Punya Pabrik Baterai Terbesar
Cantika Adinda Putri , CNBC Indonesia
NEWS

24 July 2020 14:23

Foto: Ilustrasi baterai pada mobil listrik yang dikemas dalam komponen yang aman. electrec.co

Jakarta, CNBC Indonesia - Era pengembangan mobil listrik di Indonesia perlahan mulai tampak. Pasokan baterai yang menjadi isu utama pengembangan kendaraan listrik sebentar lagi terpecahkan.

Perusahaan asal Korea Selatan, Hyundai Motor Group bekerja sama dengan LG Chem Ltd, berencana membangun pabrik baterai di Indonesia. Nilai investasinya mencapai US$ 9,8 miliar.

Kepala Badan Koordinasi Penanaman Modal (BKPM) Bahlil Lahadalia menjelaskan secara eksklusif kepada CNBC Indonesia perihal rencana Hyundai-LG yang akan bangun pabrik baterai.


Menurut Bahlil, pembangunan pabrik baterai oleh Hyundai-LG ini akan pertama kalinya menjadi yang terbesar dan terintegrasi di dunia.

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"Pabrik baterai itu akan dibangun dari hulu sampai hilir. Sampai packing baterai. Ini perusahaan pertama di dunia yang terintegrasi, dari proses tahap pertama sampai dengan jadi baterai. Investasinya nggak main-main, US$ 9,8 billion. Dan sudah bertahap dan sudah 80% kita bicarakan," jelas Bahlil saat melakukan video conference dengan CNBC Indonesia, Kamis (23/7/2020).

Sebelumnya dikabarkan bahwa, Pimpinan LG Group, Koo Kwang-mo telah melakukan pertemuan dengan Wakil Pimpinan Eksekutif Hyundai Euisun Chung untuk membahas kerja sama baterai dan teknologi masa depan. Namun belum ada keputusan yang dapat diberikan mengenai kerja sama dua perusahaan ini.

"Hyundai Motor Group berkolaborasi dengan LG Chem dalam berbagai proyek. Namun, belum ada diskusi konkret terkait usaha patungan baterai di Indonesia," kata Hyundai dalam sebuah pernyataan kepada Reuters, sebulan lalu atau tepatnya 24 Juni 2020.

Saat ini beberapa pabrikan mobil global memang sedang berlomba-lomba untuk mencari sumber produksi baterai guna mempersiapkan diri untuk mengantisipasi perkembangan otomotif ke era mobil listrik. LG Chem sendiri pun sudah mendirikan usaha dengan beberapa produsen mobil, seperti General Motors Co, Hyundai, Tesla, dan Geely Automobile

Pernyataan ini juga sejalan dengan langkah Menteri Koordinator bidang Kemaritiman dan Investasi, Luhut Binsar Pandjaitan, yang akan menghentikan ekspor raw material, termasuk Nikel dan Kobalt.

Luhut berambisi di masa mendatang Indonesia menjadi negara terpandang karena lantaran menjadi negara produsen baterai lithium terbesar kedua di dunia.

"Kenapa pemerintah melihat nikel ore ini penting? Ini karena kendaraan listrik dibutuhkan untuk mencapai Paris Agreement 2030. Artinya, international combustion akan hilang pada 2030 dan mereka akan lari ke litium baterai. Dan kita akan menjadi produsen litium baterai nomor dua terbesar di dunia," tutur Luhut dalam acara Indonesia Moving Forward, pada Awal Juni 2020.

Tepat setahun lalu, Presiden Joko Widodo (Jokowi) telah mengeluarkan Peraturan Presiden No. 55 Tahun 2019 tentang Percepatan Program Kendaraan Bermotor Listrik Berbasis Baterai (Battery Electric Vehicle) untuk Transportasi Jalan. Saat ini sedang menunggu aturan turunan berupa petunjuk teknis (Juknis) di kementerian perindustrian.

https://www.cnbcindonesia.com/news/...siang-bolong-ri-punya-pabrik-baterai-terbesar

 

[Bungaterakhir]

Starting in 2021, one of the largest shrimp pond production center in the Bumi Dipasena /Lampung will be evaluated through a study to develop business concepts and financing methods.

From the existing planning, shrimp cultivation business in Dipasena will be carried out by adopting the principle of sustainability through the use of environmentally friendly technology. So that the business will continue to go hand in hand with a commitment to protect natural resources.

Better development methods and principles for Dipasena have also been the focus of the Indonesian Institute of Sciences (LIPI) in the past two years.

 

[Indos]

Starting in 2021, one of the largest shrimp pond production center in the Bumi Dipasena /Lampung will be evaluated through a study to develop business concepts and financing methods.

From the existing planning, shrimp cultivation business in Dipasena will be carried out by adopting the principle of sustainability through the use of environmentally friendly technology. So that the business will continue to go hand in hand with a commitment to protect natural resources.

Better development methods and principles for Dipasena have also been the focus of the Indonesian Institute of Sciences (LIPI) in the past two years.

Who is the owner of the business now ?

Look like small farmers make a cooperative and start the business by their own.

https://www.mongabay.co.id/2019/12/...pkan-pada-pengembangan-tambak-udang-dipasena/

 

[Indos]

Businesses, big and small, say economy in bad shape: Survey

• Dzulfiqar Fathur Rahman
  The Jakarta Post
  

Jakarta / Fri, July 24, 2020 / 03:04 pm

The majority of business players, from large companies to micro, small and medium enterprises (MSMEs), are of the view that Indonesia’s economy is in a bad shape, a new survey shows.

Negative sentiment is most pronounced among big businesses, with 73.5 percent of them saying the economy is in a poor condition, according to the survey by Indikator.

The public opinion pollster questioned 1,176 respondents in nine provinces from June 29 to July 11.

Among the micro and small enterprises, 60.6 percent and 69 percent of the respondents surveyed, respectively, held a similarly bleak view.

According to the survey, the businesses’ negative view on the economy stemmed from issues such as the sluggish global economy, the difficulty to get a project or order, as well as high operational costs and rising raw material costs during the pandemic.

“Businesspeople tend to see the central government as having handled COVID-19-related issues poorly,” Burhanudin Muhtadi, the executive director of Indikator, said in a virtual briefing on Thursday.

The COVID-19 pandemic has slowed Indonesia’s economic growth, with Southeast Asia’s largest economy growing by 2.97 percent year-on-year (yoy) in the first quarter this year, the lowest rate in 21 years.

Bank Indonesia (BI) has forecast that domestic economic growth will contract by 4.8 percent year-on-year in the second quarter of 2020. The Finance Ministry expects the country to fall into recession in the third quarter of the year.

Meanwhile, the government has allocated Rp 695.2 trillion (US$47.5 billion) from the state budget for its COVID-19 response to strengthen the healthcare system and boost economic activity. It launched a new team on Monday to tackle the public health and the economic aspects of the pandemic, while aiming to speed up the disbursement of the stimulus funds.

Read also: Don’t ‘misinterpret new normal’: Govt expects new team to meet health, economic goals

As of Tuesday, the government has only disbursed 9.59 percent of the total Rp 123.46 trillion earmarked to aid MSMEs during the pandemic, Cooperatives and Small and Medium Enterprises Ministry data show.

Meanwhile, according to Finance Ministry data as of June 29, the government has only spent 10.14 percent of the Rp 120.6 trillion allocated to tax incentives, including for businesses.

Among those in hard-hit sectors, such as retail, wholesale and the automotive industry, a particularly high share of 81.4 percent expressed negative views on the economy.

“In the sectors of fisheries and construction, the share of those who said the economy was bad was lower than in other sectors, but it was still the majority,” Burhanudin said.

Despite a surge in June, national car sales only reached 260,933 units during the first half of the year, a plunge of around 46 percent from the same period last year, according to Association of Indonesian Automotive Manufacturers (Gaikindo) data compiled by diversified conglomerate PT Astra International.

The majority of the companies also stated that the government should reopen the economy and phase out restrictions, the survey found.

Since the government gradually reopened the economy in June, Indonesia surpassed China in its total number of COVID-19 cases on July 18. It logged 1,906 new confirmed cases on Thursday, bringing the total number of infections nationwide to 93,657.

Read also: Administrative issues hamper COVID-19 budget disbursement: Sri Mulyani

Yugi Prayanto, the deputy chairman of the Indonesian Chamber of Commerce and Industry (Kadin), said the government could reopen the national economy while implementing COVID-19 protocols, because businesses could not rely on overseas markets yet, especially in the fisheries sector.

“We do not know how long we can survive the current condition,” said Yugi. “Thus, the only way is to optimize the domestic market.”

Aviliani, an economist at the Institute for Development of Economics and Finance (Indef), said the government should have disbursed 50 percent of the COVID-19 stimulus package by June to cushion the pandemic’s impact on the economy.

“Under the current condition, the government should [increase] its spending, because the private sector cannot,” said Aviliani, adding that the slow disbursement indicated a business-as-usual approach.

According to the Finance Ministry, state spending totaled Rp 1.06 quadrillion in the first half, a 3.3 percent increase from the same period last year and equal to 39 percent of this year’s target.

 

[Nike]

Unilever projects H1 sales growth, appoints former energy minister as commissioner

• Dzulfiqar Fathur Rahman
  The Jakarta Post
  

Jakarta / Fri, July 24, 2020 / 03:49 pm
Publicly-listed consumer giant Unilever Indonesia has its headquarters in BSD, Tangerang. (File/unilever.co.id)
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Consumer goods giant PT Unilever Indonesia estimates that its net sales increased to Rp 21.77 trillion (US$1.49 billion) in the first half of the year, which would mark annual growth of 1.5 percent.

Sales growth was propelled particularly by domestic demand, the company announced on Friday, as domestic sales rose 1.6 percent over the same period.

Read also: Unilever Indonesia books 6.5% profit growth in Q1 as consumer goods still sell


“With the current challenging and dynamic situation, we are focusing on three aspects: the safety, health and wellbeing of our people, ensuring business continuity […] during this challenging time and contributing to society at large through various COVID-19 relief efforts,” Unilever Indonesia chief financial officer Arif Hudaya said in a statement filed to the Indonesia Stock Exchange (IDX).

The publicly listed company, the local arm of Anglo-Dutch company Unilever, said the April-June period had been particularly hard, as the coronavirus pandemic had forced its food unit’s customers, namely hotels, restaurants and cafes, to shut down entirely or operate at less than full capacity.

The company recorded a 1.6 percent drop in net sales in the second quarter after a 4.58 percent annual increase booked in the first quarter.

The COVID-19 pandemic has hit business activity in the country as shops, offices and factories were forced to close to comply with social restrictions implemented to curb the virus spread. The cooling economic activity has taken its toll on people’s purchasing power as millions have lost their jobs.


In an email interview with The Jakarta Post in May, Unilever Indonesia president director Hemant Bakshi shared his expectation that customers in the future would be less complacent, especially about their health and hygiene. He expressed optimism that, if his company was able to tap into behavioral changes, it would see positive results.

Read also: Unilever closes Cikarang factory after workers test positive for COVID-19

“Given the impacts of large-scale social restrictions (PSBB), which we believe will be more visible in the second quarter, we predict that most of [Unilever’s] second-quarter financial results this year might come out weak,” Mirae Aset Sekuritas Indonesia analyst Mimi Halimin wrote in a note on Friday.

“However, we think that run-rate achievement of 48.4 percent (MiraeAsset Sekuritas Indonesia) and 49 percent (consensus) in first half sales was still relatively in line, amid the challenging conditions in the second quarter, although it’s slightly below last year’s achievement,” she added.

Unilever Indonesia will announce its first-half financial report on July 30. Its stocks, traded on the IDX under the code UNVR, were up 0.31 percent as of 3 p.m., while the benchmark, the Jakarta Composite Index (JCI), plunged 1.21 percent.

Also on Friday, the company’s annual shareholders meeting appointed former energy minister Ignasius Jonan as a commissioner. Unilever Indonesia expected the appointment of Jonan, who once also served as state-owned railway firm PT Kereta Api Indonesia (KAI) president director and transportation minister, could support the company’s efforts to better understand the domestic market.

Read also: Indonesia’s factory activity contracts to historic low in Q2

The company also appointed Badri Narayanan, who has been with the company for 20 years, as a director.

“With the support of the qualified talent, the company is optimistic about its ability to survive, give livelihood to thousands of employees and millions of people in its supply chain amid this challenging situation,” said Unilever Indonesia director and corporate secretary Sancoyo Antarikso in a statement.

The meeting also approved the payment of Rp 7.4 trillion or Rp 193 per share in dividends to the shareholders. The dividend equals the company’s entire 2019 net profit, which grew by 9.3 percent year-on-year (yoy).

Last year, Unilever Indonesia booked an annual increase of 2.7 percent to Rp 42.9 trillion in net sales.


https://www.thejakartapost.com/news...s-former-energy-minister-as-commissioner.html

 

[Indos]

Indonesia to mix coal-based DME, LPG as cooking gas to reduce imports

• Norman Harsono
  The Jakarta Post
  

Jakarta / Mon, July 27, 2020 / 08:59 am

A Pertamina employee fills a 3-kilogram LPG canister in South Kalimantan on March 31. Indonesia is looking to mix coal-based dimethyl ether (DME) and liquefied petroleum gas (LPG) as a cooking gas to reduce LPG imports. (Pertamina/Pertamina)


The government is looking to mix coal-based dimethyl ether (DME) and liquefied petroleum gas (LPG) as cooking gas in an effort to reduce Indonesia’s dependence on imported LPG.

The country has long sought to replace the LPG with DME as a cooking fuel, but new official studies have revealed a key limitation with the plan.

Read also: Govt to slash diesel subsidy 50%, generate trillions in 2021 savings

The studies found that, compared to LPG, burning DME was less pollutive but also much less hot, which meant the cooking time was up to 20 percent longer, Energy and Mineral Resources Ministry research and development head Dadan Kusdiana told reporters at a press briefing on Wednesday.

Thus, mixing 80 percent LPG with 20 percent DME was the ideal ratio to maximize retail economics, he said, summarizing the studies that were carried out between 2017 and 2020.

“If we mix it like that, the gas can be used with the existing infrastructure,” he added, explaining that conventional stoves and canisters wore out faster when burning pure DME.

Switching to DME is among Indonesia’s many plans to cut consumption of LPG, a fuel the country has been heavily importing at the cost of widening its trade deficit, a key vulnerability for Southeast Asia’s largest economy.

Oil and gas trade booked a deficit of US$3.55 billion during the January-June period this year, while non-oil and gas trade booked a surplus of $9.05 billion in the same period, Statistics Indonesia (BPS) data show.

Ideally, piped natural gas would substitute LPG, as Indonesia already produced more natural gas than needed, said Indonesian Olefin, Aromatic and Plastic Industry Association (INAPLAS) secretary-general Fajar Budiono.

“But the household gas pipes cannot yet reach every corner of the country,” he said. “The pipes are only for big cities and big islands.”

To supply cooking gas to regions not connected by pipelines, the government plans to distribute canisters of DME derived from domestically mined low-calorie coal. Indonesian reserves hold around 2 billion tons of such a coal, mostly unused.

Read also: Pertamina, PGN cut revenue targets as weak rupiah, lockdown severely hurt businesses

The energy ministry estimates that around 6 million tons of the coal is needed to produce 1.5 million tons of DME, and it estimates the DME price needs to be below $563 per ton to be economical when compared with LPG.

However, only one company, namely state-owned coal miner PT Bukit Asam, has announced a plan to develop a coal-to-DME facility thus far.

The company, working with United States-based chemical manufacturer Air Products and Chemicals Ltd, plans to develop a $2 billion facility that produces 1.4 million tons of DME a year. Such an output level requires 6.5 million tons of coal.

“That 1.4 million tons is about enough to meet Sumatra’s LPG needs,” said Dadan.

PTBA and state-owned oil giant Pertamina, the country’s top LPG distributor, previously calculated that selling the cheap coal at $20 per ton – the market price for regular coal is now at $52.16 per ton – would allow coal-derived DME to compete with LPG.

Bukit Asam president director Arviyan Arifin said on June 10 that the company was currently working on the facility’s early phase project planning, known as front end engineering design (FEED).

“We hope to begin commercial operation in 2024-2025,” he said

https://www.thejakartapost.com/news...dme-lpg-as-cooking-gas-to-reduce-imports.html

 

[Indos]

Good data about Covid 19 in Jakarta, one of the epicenters in Indonesia, Jakarta do test two times more than what WHO suggested. In the last 2 weeks, the test even has been done 4 times more than WHO suggestion. The data is quite detail, I hope another epicenter like West Java and East Java open the data like Jakarta administration.

 

[Nike]

Dari Rugi Gede, Silmy Sulap KRAS Laba Rp 380 M di Q2-2020
Monica Wareza, CNBC Indonesia
MARKET

29 July 2020 20:49

Foto: Direktur Utama PT Krakatau Steel Silmy Karim (CNBC Indonesia/ Muhammad Sabki)

Jakarta, CNBC Indonesia - Sepanjang semester I-2020 PT Krakatau Steel Tbk (KRAS) membukukan laba senilai US$ 26,27 juta (Rp 380,12 miliar, asumsi kurs Rp 14.470/US$). Nilai ini jauh lebih baik sebab pada periode yang sama tahun sebelumnya perusahaan masih membukukan kerugian senilai US$ 7,75 juta.

Laba bersih ini dibukukan perusahaan kendati terjadi penurunan penjualan pada kuartal kedua tahun ini akibat dampak pandemi Covid-19. Sepanjang periode April-Juni 2020 penjualan bersih perusahaan mencapai US$ 241,63 juta (Rp 3,49 triliun), dibanding dengan periode Januari-Maret 2020 yang senilai US$ 311,18 juta.

Sedangkan sepanjang semester I-2019 lalu perusahaan membukukan penjualan total senilai US$ 702,05 juta.


Sedangkan laba operasi sepanjang semester I-2020 mencapai US$ 79,06 juta (Rp 1,14 triliun), naik drastis 211,7% dari laba operasi di periode semester I-2019 yang senilai US$ 70,74 juta.

Baca:
Menteri Erick Rombak Jajaran Komisaris Krakatau Steel
Direktur Utama Krakatau Steel Silmy Karim mengatakan laba bersih ini salah satunya disebabkan karena menurunnya biaya operasional pada periode ini yaitu sebesar 27,5% bila dibandingkan periode yang sama tahun lalu.

Komponennya antara lain turunnya biaya energi sebesar 15,7%, penurunan biaya consumable sebesar 16,4%, penurunan biaya spare part sebesar 64,6%, penurunan biaya outsourcing non tenaga kerja sebesar 33,2% dan penurunan biaya outsourcing tenaga kerja sebesar 78,6% jika dibandingkan dengan periode yang sama di tahun 2019.

Baca:
Hilirisasi, Krakatau Steel Luncurkan Produk Baja Ringan
"Krakatau Steel selain sukses dalam melakukan restrukturisasi hutang, juga telah mampu menurunkan biaya secara signifikan, dan penurunan biaya ini terus konsisten dilakukan sepanjang 2020. Ke

Baca:
Bakal Dapat Pinjaman Triliunan, Saham KRAS & Garuda Terbang
depan kita semakin yakin Krakatau Steel akan mampu lebih bersaing dengan produk baja impor," kata Silmy dalam siaran persnya, Rabu (29/7/2020).

 

[Nike]

https://www.cnbcindonesia.com/marke...ede-silmy-sulap-kras-laba-rp-380-m-di-q2-2020

This guy had golden touch

 

[Gundala]

This guy had golden touch

Yeah, from crawling pindad to the current state and now this. I really hope Erick Tohir can also bring golden touch to all bumn tho he is already in some short of dispute with one political party. We really need to take out bumn without PSO out of political circle, and it would be a wild ride for erick since 2024 election is closing in.

 

[Indos]

One way to help small and medium size business to survive in this economic crisis is to allow them to have office in the residential place (the boss own house). It is ridiculous to start business by renting an office space in a business area in Jakarta. It will be expensive and give huge risk for start up company.

Actually Jakarta administration allow us to have business address using virtual office to get business permit, but it will be much convenience if small and medium size business just need to register their actuall office address (which is located in residential area) and dont have to pay for virtual office service every year.

This will also give more assurance to SME business owner and give them more competitive advantage to compete with multinational companies who are given the right by government to do business in Indonesia (I am talking more on B2B service business).

 

[Indos]

Hyundai, LG Chemical to Set Up EV Factory in Indonesia
By
Desk Editor Insider
-
June 23, 2020

JAKARTA (TheInsiderStories) – Two major firms, Hyundai Motor Group and LG Chemical are working to set up an electric vehicle (EV) battery plant in Indonesia, South Korea media reported on Monday (06/22). Both will utilize the new plant as a hub to target the future electric car market in Southeast Asia.

Its expecting the joint venture contract will signs in July of this year. On Monday, Hyundai Motor’ vice chairman, Chung Eui-sun and LG Chemical’ chairman Koo Kwang-mo had the first official meeting to discuss expanding cooperation in the EV business.

So far, LG Chemical has supplied lithium-ion car batteries to all Hyundai Motor EV, such as the Kona EV and Ioniq Electric. Recently, the manufacturer was appointed as a supplier of batteries for Hyundai’ next-generation electric vehicles to be launched in 2022.

In addition, the parties have agreed to explore startups abroad with advanced technology in the field of electric vehicles and car batteries, to expand into potential businesses. Last year, Indonesia and Hyundai has signed an investment deal US$1.5 billion to build EV factory in Cikarang, Bekasi, West Java.

The investment to be carried out in two stages, during 2019 – 2021 and 2022 – 2030. In the first phase, the producer will investing on the car manufacturing plants and will export at least of 50 percent of the total production. In the second phase, will focus on developing an electric car factory, transmission plant, research and development, training center, and the production to be exported as much as 70 percent.

Hyundai will begin production in 2021 with a capacity up to 250,000 units per year, including electric cars. In the meeting, the company also proposed the car maker to maximize the use of raw materials from Indonesia and cooperating with local entrepreneurs, like using battery materials from Morowali Industrial Park, tires and rubber from the country.

Coordinating minister for maritime and investment affairs, Luhut Pandjaitan said, the government was serious about supporting the success of electric car investment in Indonesia. He asserted, the two sides want to develop and produce vehicle with new models to meet the needs of Asian and Australian consumers.

Korean companies in Indonesia run industries in various fields ranging from minerals, textiles, telecommunications, machinery, automotive, electronics and others.

https://theinsiderstories.com/hyundai-lg-chemical-to-set-up-ev-battery-plant-in-indonesia/

 

[Indos]

Government mulls introducing more measures to curb imports

• Dzulfiqar Fathur Rahman
  The Jakarta Post

Jakarta / Wed, July 29, 2020 / 02:57 pm

A vessel lies at anchor at Tanjung Priok’s container terminal in North Jakarta in November 2019. Industry Minister Agus Gumiwang Kartasasmita said Tuesday the government was planning to impose several measures to reduce imports in the short and medium term and strengthen the local manufacturing industry. (JP/Dhoni Setiawan)


The government is planning to impose several measures to reduce imports in the short and medium term and strengthen the local manufacturing industry.

The planned measures included imposing restrictions, raising tariffs, adding new trade remedies and implementing more technical barriers, Industry Minister Agus Gumiwang Kartasasmita said Tuesday. He proposed, for instance, to impose restrictions in the form of an import license requirement and minimum import price and quota application on 28 commodities.

However, he stopped short of naming the commodities.


“It is way too easy for foreign products to enter Indonesia,” Agus said in a virtual discussion held by news outlet Bisnis Indonesia.

Read also: Indonesia books $1.27b trade surplus in June as economic activity resumes

The plan emerged as President Joko “Jokowi” Widodo’s administration gears up to reduce imports of raw materials by 35 percent to US$82 billion in 2022 by nudging local companies to produce import substitutes.

It also came at a time when the COVID-19 pandemic brought down global trade, which was projected by the World Trade Organization (WTO) to decline by between 13 percent and 32 percent this year.


In the first half of the year, Indonesia booked a trade surplus of $5.49 billion. While its exports declined by 5.49 percent year-on-year (yoy) to $76.41 billion, imports fell faster, namely by 14.29 percent yoy to $70.91 billion.

Agus said he was also seeking to reduce “imports that flooded Indonesia” by implementing more trade remedies, arguing that Indonesia had imposed fewer safeguards, antidumping and countervailing duty measures than China, Thailand, the Philippines and India.

China, which is Indonesia’s largest trading partner, imposes a total of 1,020 safeguard measures, while Indonesia imposes only a total of 102 safeguard measures, according to data compiled by the ministry.

The European Union, Indonesia’s third-largest source of imports, imposes 4,004 technical barriers, equivalent to Indonesia’s national standard certificate, in total. Meanwhile, Indonesia imposes just 172 technical barriers.

Indonesia has been hit by trade remedies involving nine trading partners that launched an investigation into alleged unfair practices by the country, resulting in potential foreign exchange losses of up to Rp 26.5 trillion (US$1.9 billion), Trade Ministry acting director general of foreign trade Srie Agustina said in June.

Read also: Indonesia’s horticultural products more expensive than neighbors, says Japan’s Nanyang

Trade remedies are trade defense measures against imports to protect a country’s domestic industries from unfair practices, such as dumping and subsidies, or to cope with a sudden surge of foreign goods, according to the WTO.

The three tools accepted by the WTO are antidumping, countervailing and safeguard measures.

Agus also proposed a special arrangement on entry points at seaports in Eastern Indonesia for certain commodities.

“This is to curb the flows of imported products that are already flooding Indonesia’s market,” he said.

Statistics Indonesia (BPS) data show that Indonesia’s imports of consumer goods grew by 37.15 percent yoy in June due to a sharp increase of garlic shipments from China and frozen meat from Australia, among other items. Imports of raw materials plummeted by 13.27 percent, while imports of capital goods grew by 2.63 percent, driven by higher demand for laptops from China.

Trade Ministry national export development director general Kasan Muhri said Tuesday the government also had made a plan to push Indonesia’s exports amid the pandemic.

The plan included boosting products that are growing in shipment, such as processed food and beverages, healthcare goods, agriculture and fishery products as well as commodities expected to benefit from the pandemic, like pharmaceutical products.

The government will focus on tapping into countries that have somewhat curbed the coronavirus pandemic, like Australia and Germany.

Read also: Govt seeks to renegotiate trade, investment deal with Japan

Kasan also said the government was reviewing both tariff and nontariff barriers slapped by other countries on Indonesia’s products as his office started receiving reports that Canada and China were requiring certificates declaring food products to be free from the coronavirus.

“This is among the non-tariff barriers that emerge and are related to the handling or situation of the COVID-19 pandemic,” said Kasan.

With the pandemic having slowed economic activity in many countries, Indonesia might see a further decline in trade, as its main trading partners, such as Japan and Singapore, were expected to fall into recession, said Indonesian Chamber of Commerce and Industry (Kadin) chairman Rosan Roeslani in the same discussion.

“Six of our 10 main trading partners are projected to fall into recession. This will hit our trade going forward,” said Rosan.

Singapore, the fifth-largest export destination for Indonesia, entered recession in the April-June period as its economy contracted by 12.6 percent yoy.


https://www.thejakartapost.com/news...ntroducing-more-measures-to-curb-imports.html

 

[Indos]

Kimia Farma upbeat about booking profit despite pandemic

• Riska Rahman
  The Jakarta Post
  

Jakarta / Thu, July 30, 2020 / 05:06 pm

Peope buy masks and antiseptic gel at a Kimia Farma outlet in Menteng, Central Jakarta, on March 4. (JP/Riza Roidila Mufti)

Publicly listed pharmaceutical firm PT Kimia Farma is aiming to make up for last year’s losses despite the COVID-19 pandemic, after recording a promising financial performance in this year’s first half.

The company’s finance director Pardiman said on Wednesday that the company had prepared several strategies to book a profit this year, including conducting retail transformation, optimizing its supply chain and diversifying its products and portfolios, among other measures.

“The strategy was proven in the first quarter of this year when we managed to book Rp 160 billion [US$10.8 million] and we believe this will continue through to the end of the year,” he said during an online public expose, referring to the company’s operating income in the year’s first quarter.

Pardiman, however, did not elaborate on the company’s profit projection for this year.

The company recorded Rp 12.72 billion in losses in 2019, compared to Rp 491.5 billion in profit a year earlier, due a 119.16 percent increase in finance costs.

It booked Rp 48.57 billion in profit in the first half of this year, a 1.7 percent increase from Rp 47.7 billion last year, its financial report shows.

Its net sales also increased slightly by 3.5 percent year-on-year (yoy) in the year’s first half to Rp 4.68 trillion, from the January to June period of 2019, despite the blow dealt to the economy by the pandemic.

The company’s optimism also seems to be supported by the fact it has seen an increase in sales of COVID-19 related products, like medicines and health supplements, during the pandemic.

“However, [sales of] products not related to the coronavirus, such as cosmetics, declined by around 30 percent compared to a year prior and that will continue to pose a challenge for us,” president director Verdi Budidarmo said.

The company’s generic medicine sales saw the highest jump of 10 percent yoy to Rp 739 billion in the first half of the year, while over-the-counter medicine and cosmetics sales nosedived 17.8 percent yoy, its report shows.

Given that the pandemic has yet to show signs of slowing down, business development director Imam Fathorrahman said the company would continue to develop products that could help prevent COVID-19. The company plans to distribute a vaccine candidate that is currently being developed by state pharmaceutical firm Bio Farma, in cooperation with Sinovac Biotech of China.

Read also: Indonesia teams up with global manufacturers in vaccine hunt

At the same time, Kimia Farma will also develop products for degenerative illnesses that have been included in the company’s product development roadmap this year, as ailments like cancer, diabetes and cardiovascular disease continue to increase both domestically and globally.

It will also continue its organic expansion plans this year by allocating Rp 547 billion in capital expenditure (capex) sourced from its own internal funding, said Pardiman.

“We have used about 54 percent of the capex to develop our pharmacy, clinic and laboratory chain, our medicine production and our raw material plant in Cikarang [in West Java],” he said.

The raw material plant, which has been in operation since 2019, was established under a joint venture with South Korea’s Sungwun Pharmacopia Co Ltd in 2016, and is also aimed at reducing Kimia Farma’s dependency on imported raw materials.

Verdi said the country’s pharmaceutical industry was still heavily dependent on imported raw materials from China, India and many other countries.

He expects the plant to reduce the firm’s raw material imports by 2.72 percent this year.

“We hope this will continue, as we aim to further reduce our raw material imports by 23.82 percent by 2024,” said Verdi.

Kimia Farma also plans to diversify its products and portfolio this year through inorganic growth. Verdi said the diversification would be achieved through strategic partnerships with other companies rather than through acquisitions.

“These partnerships include developing products that relate to our core pharmaceutical business, both for COVID-19 products and non-COVID-19 products,” he said.

Meanwhile, Pardiman said the company was committed to reducing its accounts receivable, including Rp 1.13 trillion from the government, to help reduce its short-term loans.

Kimia Farma’s shares, traded on the Indonesia Stock Exchange (IDX) under the code KAEF, were up by 7.21 percent to Rp 2,380 apiece as of 1:42 p.m. on Thursday.

https://www.thejakartapost.com/news...at-about-booking-profit-despite-pandemic.html