Indonesia Economy Forum

[katarabhumi]

Indonesia has opportunity to benefit from soft commodities: Jokowi

Stefani Ribka - The Jakarta Post
Jakarta | Wed, October 4, 2017 | 03:23 pm

President Joko "Jokowi" Widodo has said that as a country that produces commodities such as coffee, chocolate, coconut and spices, Indonesia has the opportunity to benefit from the increasing demand of the soft commodities offered by lifestyle businesses.

The increasing demand occurred due to the emerging middle classes in China, India and African and Latin American countries, the President said.

"This is a big business [opportunity]. Don't let it slip away. We have micro, small and medium enterprises as well as big firms. Don't let other countries seize on it this first. We need to be agile," he said in his speech at the closing of the National Coordination Meeting of the Indonesian Chamber of Commerce and Industry (Kadin) on Tuesday evening.

Jokowi said that the hundreds of millions -- if not billions -- of low-income people that jumped to middle-income status would demand higher quality products and lifestyle products.

Citing an example, Jokowi said that although the worldwide demand of coffee increased by 20 percent, Indonesia was slow to increase its coffee production and improve its coffee quality because of poor education standards.

"The growth of coffee shops in Indonesia is very fast but we're not fast enough in revitalizing coffee plantations, improving coffee quality and educating baristas," he said. (bbn)

http://www.thejakartapost.com/news/...-to-benefit-from-soft-commodities-jokowi.html

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Indonesia to construct 10 int’l yachts, cruise ship ports

Stefani Ribka - The Jakarta Post
Jakarta | Wed, October 4, 2017

President Joko “Jokowi” Widodo has said the government plans to build 10 international yachts and cruise ship ports within the next two years in a bid to bring in 20 million foreign tourists in 2019.

Today, Indonesia, the world’s biggest archipelago with more than 17,000 islands, is without a single port that specializes in accommodating international yachts or cruise ships.

“We agreed to construct the ports. We have 17,000 islands but no cruise or yacht ports at all. Where do we tell them to park then?” he said during the closing speech of the 2017 National Coordination Meeting of the Indonesian Chamber of Commerce and Industry (Kadin) on Tuesday.

Earlier, Kadin chairman Roslan Roeslani noted of the importance for the government to provide such ports for wealthy tourists.

Indonesia is aiming to bring in 15 million tourists this year and 20 million tourists in 2019. It is trying to compete with its Southeast Asian neighbors in tourism. Thailand, for example, has seen more than 30 million foreign visitors in recent years.

Besides building the ports, Indonesia launched a free-visa policy for 174 countries two years ago.

The country has recorded 9.25 million foreign visitors in January to August this year, a 26.8 percent increase year-on-year (yoy). (bbn)

http://www.thejakartapost.com/news/...nstruct-10-intl-yachts-cruise-ship-ports.html

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[katarabhumi]

Why Major Brands See So Much Potential in Indonesia’s Project Pipeline

Some of the largest and most glamorous hotel brands in the world are excited about Indonesia, and they have real cause to be because of the country's active hotel project pipeline.

In fact, InterContinental Hotel Group, one of the leading hotel companies in the world, recently signed a dual-brand management agreement with PT Graha Agung Indahsentosa, which will involve the anticipated debut of two hotels: Holiday Inn Resort Bintan Lagoi Beach and Hotel Indigo Bintan Lagoi Beach, both of which are in Lagoi Bay, one of the prime tourist destinations in Bintan, Indonesia. These new properties are set to make their scheduled debuts in 2019.

One look at Bintan (see my post of the beauty Bintan : here) is enough to see why such an important hospitality industry stakeholder would choose to make such an investment in the region. Bintan is known for its natural beauty, and it's located just off the coast of Singapore. It is connected to that city by ferry boats. In regards to the debut of these hotels and the dual-brand management agreement, Rajit Sukumaran, the chief development officer for IHG Asia, Middle East and Africa, has said, "Indonesia is a key market for IHG. It is a diverse market, has a strong leisure and business pull, and is well-placed for easy travel between Australia, Southeast Asia and Singapore."

And IHG isn't the only company executing a plan to expand into Indonesia. The Langham Hospitality Group, which has a history that extends back to the opening of The Langham, London in 1865, is also looking at Indonesia to foster future growth. The brand is planning to make its debut in Indonesia in 2018 with a new hotel in Bali. Also, The Langham, Jakarta is slated to open in 2019 with plans calling for Langham Palace, Pandava Beach, Bali to open in 2020, all of which makes Indonesia a key part of Langham's strategy in the increasingly important Asia Pacific global hospitality region.

According to information from the TOPHOTELPROJECTS database, Indonesia's current project pipeline is quite robust, with 118 projects slated to debut soon, creating a total of 22,958 new rooms for guests. Bali is the hub of the pipeline, with 29 projects slated for that city while Jakarta is expected to usher in 27 projects of its own. The expansion is center around this year and next, with 36 new projects slated for 2017 and 44 more projects set for 2018.

https://www.hospitalitynet.org/news/4084898.html

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[Nike]

President inaugurates mega projects worth US$5.87 billion in Banten
Jumat, 6 Oktober 2017 00:23 WIB - 1.221 Views

Jakarta (ANTARA News) - President Joko Widodo launched the groundbreaking for the construction of two thermal power plants and inaugurated the operation of one thermal power plant at a total cost of US$5.87 billion in Banten province on Thursday.

During his visit to the province, the president also inspected the construction of a $145 million coal terminal, with a capacity of 20 million tons, the chief of the communication and information service bureau of the Energy and Mineral Resources Ministry, Dadan Kusdiana, said in a press statement released on Thursday.

"In total, the construction of the four projects costs $6.015 billion," he stated.

The two thermal power plants are PLTU Jawa 7, with a capacity of 2x1,000 megawatts; and PLTU 9&10, with a capacity of 2x1,000 megawatts, while the other one is PLTU IPP Banten, with a capacity of 660 MW.

The three thermal power plants are part of the governments program to build power plants with a total capacity of 35,000 megawatts, he noted.

"The construction of the coal terminal, with a capacity of 20 million tons, will strengthen coal supplies to thermal power plants in western Java," he remarked.

He added that the construction of PLTU Jawa 7, which will cost $1.88 billion, comprises unit 1 with commercial on date (COD) scheduled for April 2020 and unit 2 with COD scheduled for October 2020.

The power plant will sell electrical power to state electricity company PT Perusahaan Listrik Negara (PLN) at $4.21 cent dollars/kWh.

The power plant, which is built under a build, own, operate and transfer (BOOT) scheme for 25 years, uses ultra supercritical boiler technology and coal, with a low calorie of 4 thousand to 4.6 thousand kcal/kg (ash received).

"The technology has proven to be more efficient and environmentally friendly," he revealed.

He stated that PLTU Jawa 9&10 is built under an independent power producer (IPP) scheme next to PLTU Suralaya 1-8 in Banten, with a total investment of $3 billion.

The thermal power plant is built based on an assignment from PT PLN to its subsidiary, PT Indonesia Power, in accordance with Presidential Regulation No. 19 of 2017.

The project built under the BOOT scheme also uses ultra supercritical technology, he pointed out.

"The COD of PLTU 9&10 is scheduled for 2022. It is built under a 25-year contract, with a production cost of 5.1 cent dollars/kWh," he added.(*)
Editor: Heru

COPYRIGHT © ANTARA 2017

 

[katarabhumi]

Automotive Industry: Kendal & Gresik New Manufacturing Hubs?
06 October 2017

The Indonesian government is preparing two locations - Kendal (Central Java) and Gresik (East Java) - as alternatives for the automotive manufacturing industry in Indonesia. Currently, West Java (specifically Karawang) is the nation's car manufacturing hub where most carmakers establish their manufacturing facilities.

Imam Haryono, Director General for Industrial Region Development at Indonesia's Industry ‎Ministry, said both locations - Kendal and Gresik - already have good infrastructure development at their disposal, hence they can rely on relatively good connectivity (that keeps logistics costs low). Moreover, Kendal is already known as one of Indonesia's centers for automotive components.

Although Haryono immediately said Karawang will most likely remain the key center of Indonesia's automotive manufacturing industry, he does detect a big problem in this area, namely the high prices of industrial land and the higher minimum local wages. For the smaller players (for example Indonesia's car component makers) these matters make it basically impossible to establish their plants at Karawang. In Kendal and Gresik, on the other hand, land prices and minimum wages are still lower.

While there exists a thriving automotive manufacturing industry center in Karawang, the various automotive manufacturers that are active in Indonesia are spread across Sunter (North Jakarta), Cikarang, Bekasi, Purwakarta, and Bogor. Therefore, the government now intends to create special automotive manufacturing areas that are connected to big ports. In about five years time a new international deep seaport should be completed in Patimban (West Jakarta) that will have a focus on automotive exports. Meanwhile, carmakers in Kendal and Gresik can transport their output to the Tanjung Mas port in Semarang and Tanjung Perak port in Surabaya, respectively, for export purposes.

Yohannes Nangoi, Deputy Chairman of the Indonesian Automotive Industry Association (Gaikindo), also stated that Karawang will remain the key center of Indonesia's automotive industry, particularly due to its proximity to Jakarta (where Indonesia's largest car market is located). However, the disadvantage is that industrial land has become very expensive in this area. Therefore, it is important that the government creates new growth centers for the automotive sector that contain good supportive infrastructure.

I Gusti Putu Suryawirawan, Director General of Metal, Machinery, Transportation Equipment & Electronic Industries at the Indonesian Industry Ministry, says the government has to focus on the development of industrial zones that have a high degree of competitiveness in order to compete with industrial zones in other countries (for example Thailand). However, he adds that Indonesia needs to adapt its car industry to the latest global trends and technology, such as the manufacturing of low emission cars and electric cars.

Sanny Iskandar, Chairman of the Industrial Estate Association (HKI), said automotive companies will remain focused on the island of Java as, domestically, the biggest car market is found on Java, while, externally, the biggest international ports are located on this island. Therefore, Iskandar expects demand for industrial land (from automotive companies) on Java to continue growing. However, the growth pace may reach only one digit in 2017, which constitutes is moderate growth. The reason behind this is that many automotive companies - especially in Bekasi and Karawang - still have unused land at their disposal and therefore do not need to acquire more land to expand their business.

The automotive industry is actually very important for Indonesia's industrial land sector as this industry accounts for about 30 percent of total demand for industrial land in Indonesia. Sales of industrial land rose 33 percent year-on-year (y/y) to 120 hectares in the first half of 2017.

https://www.indonesia-investments.c...kendal-gresik-new-manufacturing-hubs/item8257

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[Nike]

AirAsia now connects Bali and Kolkata

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  Pesona Indonesia
  

Jakarta | Sat, October 7, 2017 | 02:06 pm

AirAsia Indonesia inaugurated its new flight route from Bali to Kolkata in India on Oct. 4. (Shutterstock/DM studio)

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AirAsia Indonesia inaugurated its new flight route from Bali to Kolkata in India on Oct. 4.

The service offers four flights a day departing from I Gusti Ngurah Rai International Airport in Bali and arrives at Kolkata's Netaji Subhas Chandra Bose.

Upon landing, the maiden flight, which used an Airbus A320-200 airplane, was greeted with a water canon at the airport in Bali.

According to AirAsia Group CEO for Indonesia Dendy Kurniawan, the ticket sales for this route was first made available on Aug. 17 in accordance to the 72nd anniversary celebration of Indonesia’s Independence Day.

“We want to emphasize that this expansion is only possible due to the hard work of the Transportation Ministry. We are currently in the first category of the FAA safety rank and we really appreciate it,” said Dendy.

Read also: Pangolin smuggling thwarted in Dumai

Following the launch of the new service, AirAsia now offers two routes to India as it previously launched Bali - Mumbai flight in May.

This also marks the fourth international route from AirAsia Indonesia after Bali – Narita, Bali - Mumbai and Jakarta – Macau.

The travel time between Bali from Kolkata is 7.5 hours including a short transit in Kuala Lumpur, Malaysia.

India has the second highest growth percentage for the number of tourists to Indonesia with 27 percent per year, right behind China with 45 percent per year. (kes)

http://www.thejakartapost.com/travel/2017/10/07/airasia-now-connects-bali-and-kolkata.html

 

[Bungaterakhir]

Government launches farmer insurance
source : http://www.thejakartapost.com/news/2017/10/10/government-launches-farmer-insurance.html

The government has launched a farmer insurance program to help farmers avoid losses from their agricultural activities, Agriculture Minister Amran Sulaiman said in Ciamis, West Java on Monday.

“This is historic because this is the country's first farmer insurance program. We have prepared the insurance for cows and agricultural fields to prevent farmers suffering losses if their fields are affected by floods or pests,” said Amran during the launch of the insurance program.

The farmer insurance, managed by PT Asuransi Jasa Indonesia (Jasindo), was part of the government’s commitment to improving the welfare of farmers, said Amran, adding that it would also help increase the production of the agriculture sector.

“Through the program, farmers will not only rely on their agricultural products, but are expected to earn money from other businesses as well,” she said as reported by Antara. (bbn)


‘Smart Indonesia’ program helps students across RI
source : http://ms.thejakartapost.com/flash-...t-indonesia-program-helps-students-across-ri/

Sasmi Selvia, a student from Sukabumi, was overjoyed when she received the government aid she needed to continue her education at SMA 1 Sukabumi state high school.

It’s a big help for Sasmi, especially since her father is a farmer who doesn’t make enough money to fully afford his daughter’s education. Sasmi is just one of many students who have become recipients of the government’s Smart Indonesia Program (PIP) initiated by President Joko Widodo.

“The Smart Indonesia Program is really good, and it really helps us. I hope that this program can continue to aid children from underprivileged families. Thank you, Mr. President,” Sasmi said when she received the PIP aid in Sukabumi, West Java.

The Education and Cultural Affairs Ministry is using PIP to ensure equal access to quality education for Indonesians, especially those coming from families in poverty and for orphans.

Agus Sartono, who is deputy coordinator of education and religious affairs at the Office of the Coordinating Human Development and Culture Minister, stressed the importance of increasing the quality of educational services and providing equal access to it.

More than 17 million Smart Indonesia Cards (KIP) are in the process of being channeled out to youths from underprivileged homes.

“This is to ensure that recipients of KIP can gain access to education, whether formal or non-formal,” Agus said, during the recent Forum Merdeka Barat 9 media gathering event at the Communications and Information Ministry, as quoted by TribunNews.com.


Govt targets 1 million vocational workers
source : http://ms.thejakartapost.com/flash-updates/2017/10/11/govt-targets-1-million-vocational-workers/


#snipped

Haris revealed that the Industry Ministry had launched a number of vocational programs throughout Java. This featured the participation of 308 industry representatives and 1,019 vocational schools, and has produced 1,710 signed partnerships.

Meanwhile, the Manpower Ministry is doing its part to improve vocational education by maximizing the use of “Competence-Based Training” at Employment Training Halls through its “3R Program”, which involves Revitalization, Rebranding and Reorientation.

“The goal of this program is not only to create a massive workforce, but also a focused workforce [that produces workers] in accordance with industry demands,” said Harry Sudarmanto, who is secretary general at the Manpower Ministry.

For 2018, the government is aiming to produce 1 million ready-to-work students through vocational education. Toward this end, it is involving 1,775 vocational schools and 355 companies. It estimates that its verified graduates will amount to 845,000 people.

This industry vocational program is based on the 2003 National Education System Law and on Presidential Instruction No. 9/2016 on Revitalizing Vocational Schools.

Schools begin to adopt ‘dual report card’ system
source : http://ms.thejakartapost.com/flash-...hools-begin-to-adopt-dual-report-card-system/

After the end of the semester’s last exams, schoolteacher Martin immediately began preparing his students report cards.

Aside from giving them ratings on their academic performance, he also made a list of their non-academic achievements at school.

Martin teaches at a school in South Jakarta that has adopted an international curriculum that doesn’t just evaluate students based on their grades.

It also takes into account evaluations of the student’s character. This change is meant to deliver the government’s vision of education as a means to strengthen the character of the nation’s youth.

This direction is outlined in President Joko Widodo’s Presidential Decree No. 87/2017 on Strengthening Character Education.

According to Education and Culture Minister Muhadjir Effendy, one way of developing character in schools is through motivating students and nurturing their talents.

Thus the the ministry has obligated all schools to implement a “double report card” system starting in 2018 that evaluates both academic and personal progress for each student.

“These new report cards force teachers to scout and look out for the talents of each child,” Muhadjir said, during the Forum Merdeka Barat 9 media gathering at the Communications and Informatics Ministry on Sept. 30, as quoted by kompas.com.

 

[Boss Dragun]

how the eels were prepared for exports as well as to be served in restaurants.

 

[Svantana]

 

[Nike]

Manufacturing | Indonesia's Textile Industry – Testing Times Upstream
Indonesia's textiles and garments industry is enjoying growing sales at home (thanks to rising consumer spending) and abroad (thanks at least in part to the weaker rupiah). Nevertheless, the industry faces some serious challenges amid rising competition in the ASEAN region, which is particularly true for the businesses that supply fibres, yarn and fabric. Indonesia's upstream textile industry needs to be strengthened with capital, technology and know-how, so that it can continue to provide goods of sufficient quality and quantity to the growing apparel industry. Achieving this poses a challenge for the country and an opportunity for investors.

The most convincing argument for upstream investment in Indonesia's textile industry is the healthy and growing downstream business, with garment makers capitalizing on rising domestic and foreign demand

As increasing wages are prompting China to focus its industrial development on higher-value products and services, Indonesia has successfully positioned itself as an alternative production market for global fashion brands. The government has set its sights on increasing the value of exported textiles and garments to $75 billion USD by 2030 and contributing 5% to global exports, up from less than 2% at present. At the same time, the country is moving up the value chain in garment production, with higher-value products such as suits and trousers registering faster growth than lower value items, such as t-shirts. In order to uphold this trend, it is vital that domestic garment industries can source high-quality textiles at reasonable prices on the local market.

Upstream businesses not pulling their weight
Indonesia is a leading textile manufacturing country. One of the strong points of its industry is the existence of a well-developed upstream and downstream business, which allows for tight vertical integration (See Overview of Fibre, Textiles & Garments). Seeking to take advantage of this, major local garment makers have raised capital to acquire assets that would help them streamline their supply chains.

Recently, though, the upstream side of the industry has been struggling to keep up, as reflected in the influx of materials for the apparel industry. Imports of fabric doubled to around 600,000 tonnes from 300,000 in 2008, according to the Indonesian Synthetic Fiber Producers Association (APSyFI). As downstream businesses source more and more of their input materials from abroad, the domestic upstream industry has been failing to benefit from rising consumer spending according to APSyFI Secretary General Redma Gita Wirawasta. However, domestic raw material producers are entirely capable of supplying the fabric the industry needs. APSyFi has therefore been lobbying for the imposition of anti-dumping duties on yarn imports.

Cost pressure and reliance on imports
While gross output of upstream textile products has grown in recent years, costs have risen even faster. This is putting considerable strain on businesses. Annual investment in fixed capital at large and medium-sized companies (those employing at least 20 people) almost quadrupled from 4 trillion RP in 2008 to 15 trillion RP in 2010, but since then has fallen back by more than 50% to 6.3 trillion RP in 2013. The less than perfect shape of the upstream business also reflects in the industrial production index for the textile industry, which in contrast to most other industries has been on a declining trend since 2010.

Large and medium-sized textile businesses: output, costs, fixed-capital investment (Trillion Rupiah):

Source: Statistics Indonesia (BPS)

Number of large and medium-sized textile businesses (20 or more employees):

Source: Statistics Indonesia (BPS)

The number of large and medium-sized textile businesses has slowly but steadily declined, from 2,450 in 2008 to 2,232 in 2013, pointing to ongoing industry consolidation in the struggle for greater efficiency. Trade data shows that Indonesia's upstream textile business is becoming increasingly dependent on imports, while exports grew only moderately over the past five years.

In particular, Indonesian spinners rely on the world market for almost all of their raw cotton, because domestic harvests of cotton are negligible. This makes yarn spinners vulnerable to fluctuating global prices and has forced a number of small businesses to close up shop, though larger ones are in a stronger position thanks to their greater stockpiling ability and better access to capital. Raw cotton is sourced from a range of countries – led by the US, Brazil and Australia – to be spun in Indonesia and then either exported as yarn or further processed into fabric and garments.

Upstream producers struggling with foreign competition
While exports of cotton yarn grew by almost 80% between 2009 and 2013 to 190,228 tonnes (Comtrade), cotton-based woven fabrics made little headway and some types even saw decreasing shipments. Imports of both yarn and fabrics increased. As for manmade fibre products, imports of yarn and woven fabric outpaced exports over the past five years, though their absolute volume remains considerably smaller. Imports of manmade filaments and staple fibres, meanwhile, have seen particularly fast growth, as the garment industry requires growing amounts.

In conclusion, the fast growth in imported yarn and fabrics (both natural and manmade) suggests that Indonesia's upstream textile industry is struggling to fend off foreign competition. On the back of the growing dependence on imported raw materials and early-stage intermediate goods, the devaluation of the Rupiah – while a boon for garment exporters – only creates more headaches upstream.

Worryingly for local producers, it is particularly higher-value products where Indonesia is falling behind. In 2013, for instance, the import value of impregnated, coated or laminated textile fabrics was more than five times as high as exports, after more than doubling since 2009, while exports of the same product class stagnated.

Indonesian trade of upstream textiles – HS commodity codes 50 to 56; 58 to 60 (Billion US dollars):

Source: : International Trade Centre (ITC), based on UN Comtrade data

Staying on top in a competitive market
In 2016, Indonesia will be part of a single market extending across the ASEAN region, known as the ASEAN Economic Community (AEC). Unless the country's upstream textile industry manages to grow more efficient and at the same time move up the value chain to produce more high-cost items, local spinning mills and other upstream manufacturers will be hard-pressed to take on the ever stronger competition from low-cost producer countries such as Vietnam.

Numerous factors have been blamed for the lack of competitiveness in Indonesia's upstream textile industry: first and foremost the use of inefficient technology, but also inadequate human resources. In a wider assessment, the country's underdeveloped transportation and power infrastructure and rising energy costs also play a role. Labour costs, while one of the biggest worries for garment producers (See Indonesia’s Textile and Clothing Industry), are of lesser concern for the capital intensive upstream business. Electricity bills, however, account for around 30% of total production costs. This underlines the need for greater capital expenditure on energy efficient equipment.

Investment and export opportunities
Investment incentives by the government to help textile companies upgrade their machinery have produced insufficient results so far. The same is true for government-sponsored training programmes and industry clusters aimed at generating local know-how and fostering integration. The upstream industry's lack of competitiveness jeopardises Indonesia's hopes of taking over much of the manufacturing business that China's maturing economy is relinquishing. And with government measures showing little effect, those hopes now rest primarily with the private sector – including foreign investors. Opportunities also exist for exporters of equipment such as spinning and weaving machinery as well as in consulting and staff training.

The most convincing argument for upstream investment in Indonesia's textile industry is the healthy and growing downstream business, with garment makers capitalizing on rising domestic and foreign demand. The AEC promises to further open the doors to neighbouring markets for producers based in Southeast Asia's biggest economy. In addition, the country boasts a large and young labour force and is widely expected to see accelerated progress on tackling its infrastructure bottlenecks (See Indonesian Infrastructure: Tremendous PPP Opportunities), both of which add to its attraction as a global textile production centre.

Global Business Guide Indonesia - 2015

 

[Nike]

Manufacturing | Indonesia’s Electronics and Home Appliances Sector
The global economic downturn made a significant impact on the Indonesian electronics industry both in terms of domestic consumer demand and exports. Over the course of 2008 sales of products such as fridges and washing machines dropped by 16% to 239,000 units and 11% to 104,000 units respectively compared to the year before (Electronic Marketers Club). From 2010 the situation has been dramatically different with boosted purchasing power at over $3,000 USD per capita (at PPP) and the strengthening of the Rupiah against the US dollar. The Indonesian Electronics Association is forecasting a 20% growth in domestic electronics sales for 2012 to $3.2 billion USD (excluding cell phones and computer hardware) following on from the higher than expected yoy growth of 27% witnessed in 2011. This trend is also expected to be coupled with the rise of Indonesia as a major manufacturing base for international electronics producers who are keen to take advantage of the country’s consumer market while using it to serve as an entry point for the ASEAN region.

Domestic brands face an increasingly competitive local market as multinationals continue to expand and establish themselves in an increasingly brand conscious market.

Indonesia’s domestic market for electronics has been showing a broad upward trend for the past decade in line with improved per capita purchasing power and greater consumer sophistication. The price of electrical goods has also been rising at a rate of 10-15% annually from 2009 as a response to currency fluctuations and the introduction of more expensive models to the market ranging from television sets to blenders. The wider availability of financing options from electronics retailers which allow consumers to purchase goods on credit cards has also fuelled the demand for the latest technology and made high end goods available to those that they were previously out of reach. Television sets are proving to be the leading contributor to electronics sales in Indonesia and accounted for 46% or $505 million USD of total sales over the first half of 2012 with demand being driven by the broadcast of international sporting events and the wider availability of digital television leading people to replace their terrestrial television sets. This was followed by refrigerators at 22.4%, air conditioning units at 15.5% and washing machines at 13 %( EMC & Indonesia Electronics Producers Association, (Gabel)).

According to the Ministry of Industry, Indonesia has a total of 250 electronics and component producers operating in the country. The higher end digital electronics sector is dominated by international brands often through joint ventures with local manufacturers which mainly import the components and then assemble the products in Indonesia such as LCD televisions, air conditioning units and refrigerators for both the local market and exports. Major international brands such as Toshiba Consumer Products, LG Electronics, Sony, Panasonic Indonesia and Samsung Indonesia are well established throughout the country with distribution networks via both modern and traditional retail networks (See The Rise of Modern Retail Outlets).

Indonesian electronics brands are highly competitive in the domestic market within the low to middle end technology sector for goods such as home appliances including irons, rice cookers, gas stoves and fans. Key local home appliances manufacturers and brands include Maspion Group, Polytron (Hartono Istana Technology), Denpoo Mandiri, Sanken (Istana Argo Kencana), Star Cosmos and Quantum (Aditec Cakrawiyasa). Local brands have been able to compete effectively by having a clearly segmented market strategy based on each brand’s core strengths as well as strategically focused investment on research and development. This has generated innovative home appliances which specifically suit the needs of the Indonesian lifestyle and purchasing power of the mass market. A further common feature to each brand’s success has been a far reaching aftercare service network which can be a major determining factor in the consumer decision process.

Domestic brands face an increasingly competitive local market as multinationals continue to expand and establish themselves in an increasingly brand conscious market. Foreign brands with manufacturing facilities in Indonesia offer a scale of production which provides them with greater price flexibility to tap into the lower income market (See Overview of the Manufacturing Sector). Domestic manufacturers have raised the issue through the Indonesia Electronics Producers Association and other industry bodies that they lack protection from the government which has resulted in the growing presence of established foreign brands in addition to the more recent influx of cheap Chinese made goods due to the ASEAN-China FTA. The Ministry of Industry has also stated publicly that it wishes for investment into low end technology electronics production to be disincentivised through a revised Negative Investment List (See Understanding the Negative Investment List) to protect local producers. Whether such plans will go ahead remains to be seen.

The reliance on imported components presents a significant challenge to the industry as imports of components grew by 11% in 2011 compared to the previous year (Gabel). Use of local content in locally assembled electronics products is estimated to be only 40%-55% by the major leading brands (KADIN) which leaves the industry highly vulnerable to exchange rate volatility and supply side shocks. However, the rising demand for electronics components which is estimated to continue to grow by 10% annually to 2014 also presents opportunities for the national industry to develop and create jobs for up to 387,000 Indonesians (Ministry of Industry). This opens up lucrative opportunities for joint ventures and technology partnerships with local component producers who aim to increase their capacity as well as move up the value chain thereby reducing the need for electronics manufacturers to import components.

International electronics manufacturers are beginning to bolster their presence in the market with the setting up of new factories and production plants (See New Tax Incentives for Investors in Indonesia) . At the end of 2011 Toshiba announced their intentions to invest $39 million USD to establish a washing machine factory in East Jakarta as part of their efforts to increase sales outside of Japan. Sharp Electronics confirmed that it plans to invest $1.2 trillion RP into a new factory in Karawang, West Java which will produce refrigerators and washing machines more than doubling the company’s current capacity in Indonesia. South Korea’s LG Electronics also announced that it is considering making Indonesia its regional manufacturing hub in place of markets such as Thailand and Vietnam. In May 2012 a delegation from the Turkish Electro Technology Exporters Association (TAT) also visited the country to meet with the Indonesian Chamber of Commerce to discuss entering the home appliances market. One of the latest and most high profile entrants to the market is Taiwan’s Foxconn, a subsidiary of the world’s largest electronics manufacturer, which announced its plans to invest up to $10 billion USD in a production plant in Banten to begin operating as early as December 2012.

As an electronics manufacturing base, Indonesia offers highly attractive attributes such as the size of the consumer market and competitive labour costs which are among the lowest in Asia at an average of $113 USD per month, yet electronics still make up a marginal element in the national economy. Despite the presence of multinational electronics manufacturers, electronics make up just 5% of Indonesia’s total exports (Barclays). There are various factors that have held foreign investment in the sector back in the past namely poor infrastructure, lack of availability of good industrial sites for plants (See Industrial Land & Property) and currency risks. Yet while those issues are not going to be solved in the short term, a renewed appetite for investment in the sector by multinationals as mentioned previously illustrates that the country remains attractive as a long term investment target. Investor enthusiasm may also be as a result of efforts by the government to offer incentives such as the tax breaks of up to 10 years introduced in 2011 for investors in industries such as electronics as well as footwear and telecommunications.

Indonesia’s electronics and home appliances sector is entering a high growth stage in its development as electrical goods have moved from being luxury, tertiary products to secondary and affordable goods for a significant portion of the market. High end technology such as digital televisions are still only within the reach of the middle and upper classes, the ranks of which are growing rapidly, while middle level technology leads the sector with 80% of all products sold (including cell phones) in 2010 being in the price range of below $2 million RP (Growth for Knowledge Indonesia). The growing income per capita which is forecasted to reach $4,250 by 2014 (Ministry of Finance) is making the country attractive for multinational manufacturers for both its domestic sales potential and as a manufacturing base for the ASEAN. While the long running complaints regarding infrastructure and transport persist, these timely investments being made by many of the world’s largest electronics and home appliances producers show that the potential of the market outweighs the perceived obstacles and to wait is to risk the possibility of missing out.



Global Business Guide Indonesia - 2013

 

[Bungaterakhir]

Niger invites Wika to carry out infrastructure projects
source : http://www.antaranews.com/en/news/113091/niger-invites-wika-to-carry-out-infrastructure-projects

Jakarta (ANTARA News) - The government of the Republic of Niger is exploring cooperation with state-owned construction company PT Wijaya Karya to build infrastructure in that country.

In its press release here on Monday, PT Wika said that the talk on cooperation was done during the visit of Nigers President Mahamadou Issoufou with his ministers and leaders of Niger government institutions at Wika Building.

Also present at the meeting were director for Africa of the Ministry of Foreign Affairs, Tumpal Simanjuntak, and Indonesian Ambassador to Niger Harry Purwanto.

Niger is a landlocked country in the west part of Africa bordering Nigeria and Benin in the south, Mali in the west, Alheria and Libya in the north and Chad in the east.

Wika president director Bintang Perbowo said the visit of the president of Niger and delegation was aimed at developing cooperation with Wika in infrastructure projects in Africa and the biggest country in West Africa.

After successfully completed its first project which is the 400 km of the 1,260 km East West Motorway Project in Slegria in 2007 now Niger as Algerias neighbour wishes to know more about Wika," he said.

When receiving President Mahamadou Issoufou and delegation at the palace earlier in the day, Indonesian President Joko Widodo said he supported Wika to see potential infrastructure projects in Niger such as airport, highway and public housing.

According to data, Wikas projects abroad besides in Algeria are found in Libya, United Arab Emirates, Papua New Guinea, Brunei Darussalam, Myanmar, the Philippines, Timor Leste and others

East west Motorway Project - Algeria by WIKA INDONESIA

 

[Nike]

Indonesia`s exports to non-traditional markets begin to increase
Rabu, 18 Oktober 2017 00:47 WIB - 1.605 Views

Jakarta (ANTARA News) - Indonesias exports to non-traditional markets have begun increasing, as part of the effort to expand the export market for its commodities, Trade Minister Enggartiasto Lukita said.

"President (Joko Widodo) has instructed us to open non-traditional markets. (The exports to the non-traditional markets) have begun to increase significantly although we have not signed trade contracts with them," he told a press conference held to commemorate three years of President Widodo and Vice President Jusuf Kallas administration.

With the opening of the non-traditional markets, the government has expressed hope that Indonesias export performance will rely not only on traditional markets but also on non-traditional markets.

Indonesias exports fell 3.51 percent to US$14.54 billion in September 2017 from $15.22 billion a month earlier, according to the Central Statistics Agency (BPS).

Despite the drop, the BPS noted that exports to non-traditional markets has recorded relatively high growth, with the exports to Turkey increasing 17.22 percent and Egypt 44.33 percent year-on-year.

"In addition, we also have encouraged local companies to invest in several countries (of export destination). Of course, the investment will have an impact on exports," he stated.

The investment by the national companies in the countries of export destinations will hopefully improve the countrys export performance, the minister noted.

The raw materials used to produce goods in the countries of investment destination will mostly come from Indonesia, he added.

Indonesias exports in the January-September 2017 period reached $123.36 billion, up 17.36 percent compared to the same period last year, the BPS remarked.

During the January-September 2017 period, Indonesia recorded a foreign trade surplus of $10.57 billion, with exports reaching $123.36 billion and imports totaling $112.49 billion. The surplus was recorded at $6.41 billion in the same period last year.(*)
Editor: Heru

COPYRIGHT © ANTARA 2017

 

[Svantana]

New Indonesian cross border office near Timor Leste

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[katarabhumi]

Over Three Years Indonesia Built 55,701 BTS for 4G Network

Jakarta. During President Joko "Jokowi" Widodo's three years in office, the Ministry of Communications and Information Technology managed to build an information highway and the fourth-generation cellular infrastructure, or 4G, a minister said on Wednesday (18/10).

By July, there were 55,701 base transceiver stations (BTS) to facilitate wireless communication in 297 districts and municipalities, Communications Minister Rudiantara said in a statement, adding that at the end of 2016, there were only 25,997 BTS in 58 regions.

This month, the ministry ordered state-controlled cellular operator Telekomunikasi Selular to boost the 4G spectrum to 2.1GHz and 2.3GHz in urban users.

The ministry also wants to introduce 4G bandwidth in border areas, especially at border posts, not only to better control the movement of people and goods, but also since the areas are increasingly popular as tourist destinations.

"Our BTS will strengthen communications at border posts. As the Ministry of Transportation is building new airports in several regions, their telecommunications and internet networks must also be stronger," Rudiantara said.

According to data from the Indonesian Internet Service Providers Association (APJII), in 2016 the number of internet users was about 100 million — 40 percent of the country's population.

http://jakartaglobe.id/news/three-years-indonesia-built-55701-bts-4g-network/



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Vladimir Putin giggles at agriculture minister's pork gaffe

This is something we don’t see very often. The usually stony-faced Russian President Vladimir Putin bursting into a fit of giggles.

And the cause of his mirth? A suggestion by his agriculture minister that Russia boost its pork exports to Indonesia — the country with the world's largest Muslim population.

Alexander Tkachyov had suggested while presenting his report to ministers that the country follow Germany’s example and increase pork exports to Asia.

“Let's say Germany produces 5.5 million tonnes of pork a year, 3 million of that is exported. To all countries, and first of all China, Indonesia, part to Japan, Korea and so on,” Tkachyov said.

“Indonesia is a Muslim country, they don't eat pork,” Putin responded.

“OK, South Korea then,” Tkachyov said. ““What's the difference?” At that point, Putin covered his face with his hands in scenes that went viral.

https://www.usatoday.com/story/news/world/2017/10/19/watch-vladimir-putin-giggle/779096001/


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[pr1v4t33r]

Railway firm purchases 438 train cars to replace 30-year-old models

State-owned railway operator PT Kereta Api Indonesia (KAI) is purchasing 438 train cars from state-owned train car maker PT Industri Kereta Api (INKA) to replace models that had been operational for about 30 years.

“We need to replace the trains that have been used for 30 years. This year, we purchased 438 train cars from INKA,” PT KAI finance director Didiek Hartantyo said in Jakarta as reported by kompas.com on Thursday.

Previously, the company said it needed to replace about 1,000 train cars to assure better services, such as safety and convenience for passengers, as well as for efficiency in the company’s operational costs.

Didiek stressed that the replacement of old train cars would be carried out in stages in accordance with the company’s financial capability.

He said that currently, KAI relied heavily on INKA to meet the need for train cars.

“We purchase all [our train cars] from INKA, including 10 trains to operate from the Soekarno-Hatta International Airport in Tangerang to downtown Jakarta,” he added.

This year, PT KAI is issuing bonds to collect some Rp 2 trillion (US$148 million), 55 percent of which will be used to complete the airport train project, while the remaining is set to procure rolling stock. (bbn)

http://www.thejakartapost.com/news/...train-cars-to-replace-30-year-old-models.html