Indonesia to set up holding firms to consolidate state enterprises

[Indos]

Indonesia eyes US$602 million income revenue from asset revaluation
Ayomi Amindoni
The Jakarta Post

Unnoticed: A banner promoting the omission of administrative sanctions for 2015 tax arrears is seen off Jl. Gunawarman, South Jakarta, on Jan. 1. At least 43 state-owned companies plan to conduct asset revaluation this year, contributing a total of US$602 million in tax income for the government.( thejakartapost.com/Wienda Parwitasari )

The State Owned Enterprises ( SOEs ) Ministry is eyeing an additional tax revenue of Rp 8.4 trillion ( US$602 million ) sourced from the asset revaluation that several state owned firms have planned to work on this year.

To date, 43 state-owned companies, along with 19 of its subsidiaries, have confirmed the plan, jacking up their total asset value by Rp 310 trillion to Rp 1.35 quadrillion, said SOEs Minister Rini Soemarno.

"Several state owned companies are planning to hold asset revaluation this year. With the tax rate set at 4 to 6 percent, there will be an additional Rp 8.4 trillion to Rp 10.61 trillion in tax revenue," she said in a press conference in Jakarta on Tuesday.

Through asset revaluation, Rini added, the ministry targets total assets of all state owned companies to reach Rp 6.24 quadrillion. PT PLN will be the top state-owned company in terms of assets, she said.

As of 2015, the total assets of 118 state owned companies stand at Rp 5.39 quadrillion, compared to Rp 4.57 quadrillion in 2014.

The government has offered tax incentives for asset revaluation. Through the fifth economic policy package, a company that files for an asset revaluation in the first half of 2016 will be subject to 4 percent income tax, 6 percent in the second half.

Prior to the release of the policy package, the normal tax income rate for asset revaluation was 10 percent.

Darussalam, taxation expert from the University of Indonesia, projects that asset revaluation could increase a company's equity, helping them to meet with the government'€™s rule obliging private firms to maintain a good debt-to-equity ratio amid increasing foreign debt.

And in return, there will be additional tax income for the government when companies apply to revalue their assets this year. ( ags )( + )

http://www.thejakartapost.com/news/...million-income-revenue-asset-revaluation.html

 

[Indos]

Indonesia Pushes Overhaul of State Firms as Key to Growth
Minister for state-owned enterprises aims to boost transparency

By
BEN OTTO and

PATRICK MCDOWELL
April 20, 2015 10:50 p.m. ET

JAKARTA, Indonesia—Indonesia’s plans to root out graft at huge state companies, lure investment from China and take control of its largest gas field—all key to new PresidentJoko Widodo’s economic plans—hinge largely on a minister trying to infuse government with a private sector approach.

“We are basically majority shareholders,” Rini Soemarno, minister for state-owned enterprises, said in an interview. That means asking, “How are majority shareholders supposed to function, how do we look into the companies?”

One answer, she said, will be by tasking more of the 138 companies under her charge, representing about one-fifth of the economy in the world’s fourth-most populous nation, with opening up their books to investors by taking on debt.

“If you issue bonds you have to be very open, and very transparent, and that’s what I’m pushing more,” she said.

Ms. Soemarno, candid in speaking at length in her office overlooking Jakarta’s National Monument, is one of more powerful ministers in Mr. Widodo’s cabinet of more than 30, in part because she oversees companies with assets of more than $300 billion that are at the heart of the president’s drive to build infrastructure.

The government is hoping that making good on that drive will lift growth rates and wipe out wide gaps in development across this nation of 17,000 islands straddling the Pacific and Indian oceans.

A Bank Mandiri employee counts Indonesian rupiah banknotes. Bank Mandiri is one of the companies under Rini Soemarno's profile. The minister for state-owned enterprises is pressing for greater transparency at the companies. PHOTO: REUTERS

Success isn’t likely to come easily. Growth and development efforts have stubbornly eluded past governments, and many analysts and experts are skeptical that Ms. Soemarno will be able to follow through on such a mammoth overhaul of state companies.

State-owned enterprises have always played an outsize role in Southeast Asia’s largest economy, employing more than 850,000 people. The companies under Ms. Soemarno’s portfolio include some of the country’s biggest, such as oil and gas producer Pertamina and the nation’s largest bank, Bank Mandiri. Twenty are listed locally.

They’re now being called on to play an even bigger role, with construction companies, port operators and others spearheading a drive for infrastructure development that Mr. Widodo sees as vital to his program to bring vast parts of Indonesia into the 21st century.

This year, Mr. Widodo’s administration took the novel step of budgeting about $3 billionin capital injections for state companies, in particular construction companies and electric company PLN to build new power plants, dams and other infrastructure. “By international standards it’s low, but for us it’s quite significant,” Ms. Soemarno said.

Ms. Soemarno said she understood investors’ questions about the injections, given that corruption is rife in Indonesia and SOEs have been on the losing end of graft cases in the past. Indonesia ranked 107th worst on Transparency International’s graft rankings of 175 countries last year.

INDONESIA’S STATE-OWNED ENTERPRISES

• 
  
  • Companies under the SOE Ministry: 138
  • Listed SOEs: 20
  • Revenue: IDR 1,570 trillion ($121 billion)
  • Profits: IDR 139 trillion
  • Assets: IDR 3,467 trillion
  • Source: SOE Ministry. Financial data from 2012, combined for all SOEs under the SOE Ministry

But “corruption has to be seen in a total context: What happened? Is it done by the corporation, or is it done by individuals?” Ms. Soemarno said. “We really have to look deeply in terms of what’s going on…and how we strengthen the control system.”

Infrastructure companies like toll road operator Jasa Marga, port company Pelindo and airport operators would be the most natural candidates to engage in large-scale bond issues because of stable cash flows and long-term assets, a person with knowledge of discussions at the ministry said.

Ms. Soemarno’s ministry is also considering innovative issuance structures, like asset securitizations, and issuing bonds in currencies such as yen, euros and renminbi rather than taking on increasingly expensive dollar debts.

Ms. Soemarno said privatizing companies remains an option, but that her priority for now remains on examining management and injecting more private-sector talent and sensibilities into the sector. A new regulation will allow her to tap the private sector for positions that until now have been reserved for civil servants.

One of Ms. Soemarno’s earliest moves was to replace the boards at Pertamina and PLN. She said more leadership changes might be on the way, but that “most of the main companies are done.”

People with knowledge of cabinet relations say Ms. Soemarno is one of the few ministers who has impressed Mr. Widodo six months into his five-year term. Ms. Soemarno led Astra International, Indonesia’s largest automotive distribution firm, for several years after the Asian financial crisis of the late 1990s, and served as trade minister under former President Megawati Sukarnoputri more than a decade ago. She was once close friends with Ms. Sukarnoputri, the powerful chairwoman of Mr. Widodo’s party, but relations soured recently as Ms. Soemarno developed closer ties with the current president.

Ms. Soemarno said one of the biggest issues blocking infrastructure development under the previous presidency of Susilo Bambang Yudhoyono—land acquisition—will soon be a thing of the past. A new land-acquisition bill is being put to the test at a long-delayed, $4 billion power plant in Central Java funded by Japanese investors. Mr. Widodo had vowed the project would be ready for construction in February, but land acquisition problems persisted. Ms. Soemarno said she’s now targeting a May start.

That project, a subject of discussion during Mr. Widodo’s trip to Japan last month where he tried to woo investment, is being viewed as a key test of Mr. Widodo’s contention that he’ll unstick dozens of major stalled projects. The president has seen his popularity slip since election amid several policy stumbles.

Ms. Soemarno played down the problems.

For most new governments in their first year, “it’s the same thing,” she said. “People are wanting so much and expect we can just flip our hand and everything’s done. You can’t. Maybe if you are a population of three million you can, but we’re talking about a population of 250 million.”

“One of the big issues also is the exchange rate; it impacts so much,” she said, pointing to a rupiah that has slid to a 17-year low amid weakening China demand for Indonesia’s commodity exports, among other things. “But I think we’ll be fine.”

On another pending issue, Pertamina’s likely takeover of Total SA and InpexCorporation’s expiring contract at Mahakam, Indonesia’s largest producing gas field, Ms. Soemarno said she would like to see Pertamina take a stake but stressed that a deal between the three companies “has to be finalized this year” to ensure that the outlay of billions of dollars in investment to keep production steady.

Fuel storage tanks stand at a Pertamina facility at Tanjung Priok Port in Jakarta in January. One of Rini Soemarno’s earliest moves was to replace the board at Pertamina. PHOTO: BLOOMBERG NEWS

Total, Indonesia’s largest French investor, and Japan’s Inpex have been running the field for more than 40 years, and the government surprised many in the industry by saying Pertamina, a debt-laden company stretched thin in other areas, will take it over in 2018.

Ms. Soemarno also said that billions of dollars in financing from Chinese banks—the result of preliminary deals for more than $60 billion signed last month in Beijing—will begin flowing into Indonesia this year. Indonesia’s budget is badly constrained by slowing growth and lower revenue from oil exports. Mr. Widodo has been appealing to foreign investors for hundreds of billions of dollars, in some cases alongside Ms. Soemarno’s SOEs.

Ms. Soemarno said the main focus on the China funds are inner-city and inter city transport systems, a 2,600-kilometer transmission grid in Sumatra and power plants.

China has a poor track record in Indonesia, following through on just 7% of its investment pledges from 2010-2014, compared with more than 50% from Japan, one of Indonesia’s largest investors. Ms. Soemarno said it this time will be different because “government-to-government (efforts are) also very much involved.”

Investors are adopting a wait-and-see approach since execution has been “quite poor in the past,’’ said Bharat Joshi, head of investments for Indonesia at Aberdeen Asset Management, which manages $4.5 billion in Indonesia as a group.

Focusing more state-owned enterprises carries the flip side of paying less attention to “the role of the private sector in general and foreign investors in particular,’’ said Wellian Wiranto, economist at OCBC.

“If managed properly, SOE participation shows that the government has ‘skin in the game’ of infrastructure projects, and may well serve to attract private investors that way,’’ Mr. Wiranto said. “However, there is the potential for limitations on the role of private sector if the SOEs appear to be too dominant.”

Write to Ben Otto at ben.otto@wsj.com

http://www.wsj.com/articles/indonesia-pushing-more-soes-to-issue-bonds-1429584616

 

[Indos]

Pertamina, Rosneft sign $13.8b deal to build oil refinery

Dewanti A. Wardhani
The Jakarta Post
Jakarta | Fri, May 27 2016 | 10:08 am

Russian President Vladimir Putin, right, speaks to Indonesian President Joko Widodo during a signing ceremony after their meeting in Sochi, Russia, on May 18, 2016. (AP Photo/Alexander Zemlianichenko)

Indonesian oil and gas giant PT Pertamina has announced a US$13.8 billion deal with Russia’s Rosneft Oil Company to jointly develop Pertamina’s first oil refinery to be built in 22 years.

The two state-controled companies signed a framework agreement on Thursday to seal their partnership on the Tuban refinery in East Java, which is expected to reduce Indonesia’s reliance on imported oil products.

With the new refinery, Pertamina seeks to process around 300,000 barrels of oil per day (bpd), making it a crucial element of the country’s drive to produce more petroleum products locally.

As much as 45 percent of the refinery’s production is slated to be gasoline, up to 35 percent diesel and 20 percent petrochemicals, all for domestic consumption. The refinery is expected to be up and running by 2022.

The firms will establish a joint venture, with Pertamina to have a controling stake of 55 percent and Rosneft to hold the remaining 45 percent.

Pertamina president director Dwi Soetjipto said Indonesia currently imported about 50 percent of the oil consumed in the country, as it only produced 850,000 bpd per year compared to annual demand of 1.6 million bpd.

The Tuban refinery, Dwi said, was part of Pertamina’s efforts to increase its output to 2.3 million bpd by 2025.

He added that Rosneft, which controls more than 40 percent of Russia’s oil production, proposed various strategic partnerships that would benefit Indonesia.

Those include an option for Pertamina to invest in Rosneft’s upstream industry, which could see Pertamina obtain an additional 35,000 bpd in crude oil supplies.

“Rosneft was chosen because of its experience and its offer of many privileges [...] we will also cooperate with Rosneft in technology transfer and human resource development,” Dwi said during the signing ceremony.

Coordinating Economic Minister Darmin Nasution, who attended the event, said the new facility would be the first refinery to combine gasoline and petrochemical production. State-owned Enterprises Minister Rini Sumarno was also present during the signing.

Rosneft vice president for refining, petrochemicals, commerce and logistics Didier Casimiro said the company had invited Pertamina to participate in international joint ventures with Rosneft as well as offer professional training for Indonesian specialists in the petrochemical industry.

“Our cooperation with Pertamina will be based on mutual trust in a long-term environment for mutual benefit,” Casimiro said.

“We will make sure to get the right pricing and the best benefit for Pertamina,” he added.

In a bid to reduce oil product imports, Pertamina is also set to upgrade the capacity of its Cilacap refinery from 340,000 bpd to 370,000 bpd (per day)

The production capacity of its petrochemical unit would also increase from 300,000 tons to 600,000 tons per year.

Shares in the Cilacap refinery are divided in a ratio of 55 to 45 between Pertamina and Saudi Aramco, which has committed to supplying up to 70 percent of crude oil needed by the refinery, around 260,000 bpd to 270,000 bpd.

President Joko “Jokowi” Widodo expressed his optimism that the downstreaming efforts through the new refineries would markedly reduce imports, which are putting pressure on the nation’s trade balance.


http://www.thejakartapost.com/news/...ft-sign-13-8b-deal-to-build-oil-refinery.html

 

[Indos]

Bank Rakyat Indonesia (BRI) Will Launch its BRIsat Satellite in 2016
29 April 2014 |

Bank Rakyat Indonesia (BRI), the country's second-largest lender by market capitalization, will become the world's first bank that has its own communications satellite. On 28 April 2014, a contract was signed between Arianespace and BRI for the launch of the Indonesian satellite, which will be named BRIsat. The contract signing ceremony took place in Jakarta, and was witnessed by Indonesian President Susilo Bambang Yudhoyono as well as various other high positioned officials.

BRIsat will be launched by an Ariane 5 launcher from the Guiana Space Center, Europe's Spaceport in Kourou (French Guiana) in 2016. Through this new satellite, BRI aims to enhance its corporate performance, save telecommunication spending by 50 percent (currently BRI uses 20 to 22 transponders from 7 or 8 providers such as Telekomunikasi Indonesia, Indosat and Citra Sari Makmur), and expand its activities and services to all corners of the vast Indonesian archipelago. The construction and launch of BRIsat will cost approximately USD $230 million.

BRIsat will be the fifth satellite to be launched by Arianespace for Indonesian operators. According to the website of Arianespace "BRIsat will be built by Space Systems/Loral, and will weigh about 3,500 kg at launch. Fitted with C and Ku-band transponders, it will offer a design life exceeding 15 years. From its orbital position at 150.5° East, it will deliver highly reliable communications services to BRI's 11,000 bank branches across the Indonesian archipelago."

Arianespace Senior Vice-President and Sales & Customers Jacques Breton added, "We are very proud of our selection by BRI, which has indeed honored Arianespace by entrusting us with their first satellite. Their selection shows the competitiveness of our launch services for satellites of the 3 metric ton class. This is our fifth contract with Indonesia, coming 15 years after the launch of Palapa C2 in 1996, and also further cements an exceptional space partnership between Indonesia and Europe."

Currently, BRI needs to handle about 15 to 16 million electronic transactions per day. It frequently occurs that there are disturbances in these transactions due to the weak quality of the current satellites. Therefore, to increase the quality of its services, BRI decided to launch its own satellite. As Indonesia is an archipelago, banks need to use satellites for communication (instead of fiber-optic communication).

http://www.indonesia-investments.co...-launch-its-brisat-satellite-in-2016/item1935

June 20, 2016 11:04 pm JST
Bank Rakyat Indonesia launches satellite to better handle its 50m accounts
WATARU SUZUKI, Nikkei staff writer

With its own satellite in fixed orbit, Bank Rakyat Indonesia expects to save 200 billion rupiah ($16 million) each year in operating costs. © Antara

JAKARTA -- A satellite owned by Bank Rakyat Indonesia (BRI) was launched from Kourou, French Guyana, on Saturday evening local time in what the state-owned micro lender said is a first of its kind.

The satellite, BRIsat, cost $250 million and was built by Space Systems/Loral of the U.S. and launched by France's Arianespace using an Ariane 5 rocket. It will sit in stationary orbit above Papua, Indonesia, with 45 transponders, and is expected to start operating from August. Over 50 BRI engineers have trained for several years in the U.S. and Europe to operate the satellite.

BRI has more than 50 million accounts - which is more than Japan's biggest bank, Bank of Tokyo-Mitsubishi UFJ -- and has some 10,000 outlets across the archipelago. It has been paying 500 billion rupiah ($35 million) each year in transponder rental fees to run ATMs, electronic data capture devices, and back office operations. President Asmawi Syam estimates that by operating its own satellite, BRI will cut costs by 40%.

As the bank expands its operations further across the archipelago, improved efficiency will be crucial to maintaining profitability -- which is among the highest in the region. BRI is a key player in the government's branchless banking program, which enables third parties to carry out financial transactions, including money transfers. There are also plans to appoint 75,000 agents by the end of the year.


http://asia.nikkei.com/Business/AC/...s-satellite-to-better-handle-its-50m-accounts

 

[Indos]

Biggest terminal in Soekarno Hatta Airport is about to operate

Terminal 3 Ultimate

Operator: PT Angkasa Pura II ( state owned )

Builders:
PT Wijaya Karya (state owned) as lead consortium
PT Waskita Karya (state owned)
PT Hyundai Engineering (South Korea)
PT Pembangunan Perumahan (state owned)
PT Jaya Teknik Indonesia
PT Indulexco

Electronics system : PT LEN Industry (state owned) : Automated People Mover System

Project Worth : 4,7 Trillion Rupiah

 

[Indos]

Terminal 3 Ultimate Soekarno Hatta Airport

 

[Indos]

RI mulling Khazanah-like holding group for state firms

• Grace D. Amianti
  The Jakarta Post
  

Jakarta | Fri, June 24 2016 | 09:07 am


The government is preparing a long-term transformation program to move its state-owned enterprises into a giant holding company in a bid to improve their performance and increase their role in the economy.

Through the program, which was first envisioned several years ago, state-run firms would be transferred into a “super-holding” company that would resemble Malaysian sovereign investment fund Khazanah Nasional, State-Owned Enterprise (SOE) Minister Rini Soemarno said.

She said the super-holding company would resemble Malaysia’s Khazanah more than Singapore’s sovereign wealth fund Temasek, which is designed for purely commercial purposes.

“Khazanah, on the other hand, has people-oriented programs to the forefront,” she said on Wednesday evening, indicating that Indonesia’s state-owned firms would act as the country’s “agents of development”.

Through such a program, she pointed out, she might be the country’s only minister to eliminate the functions of her ministry as the transformation program was expected to be completed before the end of 2019.

The SOE Ministry has started the process of creating the super-holding company by establishing a number of holding companies based on sectors. For this year, she said the ministry was preparing to establish five holding companies covering five sectors, namely finance, infrastructure, mining, energy and housing.

The finance holding company will include four state-owned banks, namely Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Negara Indonesia (BNI) and Bank Tabungan Negara (BTN), as well as state-owned micro lender Permodalan Nasional Madani (PNM) and state-run pawn shop Pegadaian.

In order to accelerate the program, Rini said the ministry and the House of Representatives were currently discussing a bill that was expected to revise the SOE Law next year in order to pave the way for the establishment of the super-holding company.

“We will see whether the super-holding company becomes an institution that is responsible directly to the President or is part of the Finance Ministry. In Khazanah, the management reports directly to the Malaysian prime minister,” she said.

The roadmap for the long-delayed establishment of SOE holding companies was presented to President Joko “Jokowi” Widodo in December last year shortly after Rini gathered all executives from the country’s SOEs in a focus group discussion to enhance synergy among them.

The government is convinced that the super-holding company will help state-run firms improve their efficiency, while having a better capacity to seek funding and capital, particularly in the banking sector, in order to compete globally.

“Our banks are not strong enough in terms of capital if we want to compete internationally,” Rini said.

Gatot Trihargo, the ministry’s deputy for financial services, said sector-based holding companies that were also in the pipeline were essential to boost capacity and increase the efficiency of Indonesia’s 199 SOEs, which have total assets of Rp 4.2 quadrillion (US$317.7 billion), as the country’s state budget would be limited in supporting their growing businesses in the future.

Being under a super-holding company, state-owned companies would be managed professionally, rather than supervised by the SOE Ministry’s deputies, who were basically civil servants, Rini said.

As the management would be more professional, accountable and transparent, state-owned companies could have greater bargaining power when they needed to become publicly listed firms or seek funds by issuing debt paper in local and global capital markets, she said.

Asmawi Syam, chairman of the Association of State-Owned Banks (Himbara), said the super-holding company could help state-run banks in improving their efficiency such as with the new joint-ATM service “ATM Himbara Link”, which was launched last year in order to reduce operating costs.

http://www.thejakartapost.com/news/2016/06/24/ri-mulling-khazanah-holding-group-state-firms.html

 

[Indos]

Indonesia begins consolidation of state-owned miners
Holding company structure will help government take over Freeport mine

ERWIDA MAULIA, Nikkei staff writerNovember 16, 2017 00:49 JST

Workers enter a gold mine, operated by state miner Aneka Tambang at Cibaliung in Banten Province, Indonesia. © Reuters
JAKARTA -- Indonesia finally began formal moves to merge four state-owned mining companies under one giant holding company, in order to allow it to take over large-scale concessions -- including one of the world's largest copper mines operated by U.S.-based Freeport-McMoRan.

State-owned nickel producer Aneka Tambang (known as Antam) and tin miner Timah reported in separate stock exchange filings on Wednesday that a new government regulation has been issued to formalize the long-planned policy. These are their first filings referring to the plans to form a holding company structure.

The companies said the government's 65% stake in each will be transferred to Indonesia Asahan Aluminium, or Inalum, which will make them subsidiaries of the aluminium producer, which is currently fully owned by the government.


The government will keep control of "Series A" shares in both Antam and Timah, and therefore "retain special rights" -- namely special voting and veto rights -- stipulated under Indonesian law.

Coal producer Tambang Batubara Bukit Asam, another publicly listed state miner set to join the holding company, has yet to make a formal announcement. But all four companies involved are reportedly planning to hold shareholders meetings at the same venue in Jakarta on Nov. 29.

Over the past two years, the government has been intensively campaigning for the formation of state-owned enterprises' holding companies in several sectors -- including mining, oil and gas, finance and construction. Smaller cement, fertilizer, plantation and forestry SOEs had been previously merged under four different entities, although consolidation remains incomplete.

With Wednesday's announcement, the mining holding company looks set to be the first to be established in the second wave of such reorganizations.

The government plans to use Inalum as a vehicle to take over the operations of Grasberg, among the world's largest copper mines in Papua Province, from Freeport. The U.S. mining giant currently owns 90.64% of local subsidiary Freeport Indonesia, but following intense negotiations, it has finally agreed to shed at least a 51% stake to local entities. The Indonesian government currently owns a 9.36% stake in the Indonesian unit.

The State-Owned Enterprises Ministry in September appointed Budi Sadikin, former president of Indonesia's largest lender Bank Mandiri, as the chief of Inalum. Sadikin, then a member of the SOE minister's special staff, was tasked with preparing for the Freeport divestment.

SOE Minister Rini Soemarno has said on several occasions that the holding entities will create greater synergies and cost efficiency while expanding the SOEs' equity, giving them more access to credit and facilitating larger investments.

Indonesian President Joko Widodo, meanwhile, said the establishment of holding companies is meant to strengthen Indonesian SOEs, "so that they can expand outside the country and become world-class companies."

Shares of Antam, Timah and Bukit Asam dropped 2.9%, 1.1% and 4.8%, respectively, at the close of trading on Wednesday -- sharper than the benchmark Jakarta Composite Index's 0.27% decline.

https://asia.nikkei.com/Business/Indonesia-begins-consolidation-of-state-owned-miners

 

[Indos]

SOEs Continue to Record Better Performance: Minister

06 Maret 2019 17:59
Jakarta: State Enterprise (BUMN) Minister Rini Soemarno has said that the condition of BUMNs is stronger as their performance is getting better.

Based on a report on BUMN performance during 2018, Indonesian state enterprises' assets, profits, equities, capital expenditures (capex), and contribution to the State Budget (APBN) in the forms of taxes and dividend among others, have increased significantly.

"We will intensify this positive performance, so that BUMNs can continue to serve the country, become an agent of development, and focus on public welfare improvement," Soemarno noted in a statement here on Wednesday.
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As of Dec 31, 2018, the total assets of BUMNs reached Rp8,092 trillion, up Rp882 trillion from Rp7,210 trillion in 2017. Their total profits grew to Rp188 trillion from Rp186 trillion in 2017.

BUMNs' contribution in infrastructure development went up to Rp487 Trillion, a significant increase from Rp315 trillion in 2017, as seen from the Capex. The 2018 Capex was dominated by infrastructure sector.

The contribution of BUMNs toward APBN jumped to Rp422 trillion, up Rp68 trillion from Rp354 trillion in the previous year.

The BUMN Ministry held a coordinating meeting, participated in by president directors of 154 state-owned enterprises, in Jakarta on Feb 28, 2019.

According to the Central statistics Agency (BPS), Indonesian economy grew by 5.17 percent in 2018. It was Indonesia's highest annual growth in five years.

Indonesian economy grew by 5.18 percent in the fourth quarter of 2018. The growth was slightly stronger than earlier expectations.

In the meantime, Indonesia recorded a trade deficit of US$8.57 billion in 2018. It was the highest ever recorded by the agency.

Indonesian exports reached US$180.06 billion in 2018. The number increased by 6.65 percent compared to 2017.

Indonesian non-oil and gas exports reached US$162.65 billion last year. The number increased by 6.25 percent compared to the previous year. (antara)

https://www.medcom.id/english/business/nbwqZ73K-soes-continue-to-record-better-performance-minister

 

[Indos]

Banks prefer to disburse loans to state-owned enterprises

• News Desk
  The Jakarta Post
  

Jakarta / Tue, June 25, 2019 / 08:09 am

President Joko “Jokowi” Widodo officiates the opening of the Bakauheni-Terbanggi Besar toll road, which is part of the trans-Sumatra toll road project, at a tollgate in South Lampung on March 8. (Antara/Wahyu Putro A)

A number of bankers have acknowledged that they favor state-owned enterprises (SOEs) when disbursing loans, with SOEs accounting for almost 30 percent of funding recipients, the maximum quota allowed by the Financial Services Authority (OJK).

The lenders claim that the loans were largely disbursed to finance the government’s infrastructure projects across the country.

State-owned lender PT Bank Tabungan Negara (BTN) compliance director Mahelan Prabantarikso said BTN’s loan disbursement to SOEs had not exceeded the quota, but he called on the OJK to relax the regulation because infrastructure projects needed large amounts of funding.

Meanwhile, state-owned lender PT Bank Mandiri corporate director Royke Tumilaar admitted that the lending disbursed to SOEs was close to the quota stipulated by OJK.

He said, as quoted by kontan.co.id, that the bank was involved in financing a number of the government’s giant infrastructure projects implemented by several SOEs.

A similar statement was made by the chief economist of private lender PT Bank Central Asia (BCA) David Sumual. To address the issue, David called on the government to give a greater share of infrastructure projects to private construction companies.

State-owned lender PT Bank Negara Indonesia (BNI) deputy president director Herry Sidharta said BNI had its own policy about the size of funding for SOEs, which was 5 percent lower than the OJK quota.

Asset management firm Samuel Aset Manajemen economist Lana Soelistianingsih called on the OJK to maintain the existing quota of 30 percent quota so that SOEs would not rely solely on bank loans to finance the infrastructure projects. (bbn)

https://www.thejakartapost.com/news...isburse-loans-to-state-owned-enterprises.html

 

[Indos]

Some reminding on state owned companies potency:

In a first, China has more companies on Fortune Global 500 list than the US

• The number of US companies on the list has declined to 121 from 126 last year
• The contribution of state-owned enterprises has risen to 80.2 per cent of Chinese companies on the list from 76.3 per cent last year

https://www.scmp.com/business/compa...has-more-companies-fortune-global-500-list-us

 

[Indos]

LinkAja credits SOE collaboration, COVID-19 for extreme growth

• Yunindita Prasidya
  The Jakarta Post
  

Jakarta / Fri, July 17, 2020 / 01:33 pm

A woman holds up a smart phone scan of the QR code to activate the LinkAja digital payment service on June 30, 2019, during the product's launch in Jakarta. (ANTARA Foto/Aprillio Akbar)


A year and a half since it started doing business, state-backed digital payment platform LinkAja has reported strong growth propelled by robust collaboration with state-owned enterprises (SOEs).

LinkAja chief marketing officer Edward Kilian Suwignyo said the platform had assisted 466 traditional markets in 22 Indonesian cities transition to a digital system, as well as connected over 234,000 merchants to its noncash payment platform.

“Cooperation between sectors is very important to reach all [levels] of society in Indonesia,” Edward said at a virtual press conference on Wednesday. To stimulate the accelerated adoption of digital technology, LinkAja was not charging small and medium enterprises (SMEs) to join the platform, he added.

LinkAja is a product of PT Fintek Karya Nusantara (Finarya), a subsidiary of state-owned telecommunications giant PT Telekomunikasi Selular (Telkomsel) that was founded on Jan. 21, 2019. LinkAja is now co-owned by seven other SOEs: Bank Rakyat Indonesia (BRI), Bank Negara Indonesia (BNI), Bank Mandiri, Bank Tabungan Negara (BTN), Pertamina, PT Asuransi Jiwasraya and PT Danareksa.

According to the 2020 financial report of parent company PT Telekomunikasi Indonesia, Finarya was not yet profitable and booked a net loss of Rp 821 billion at the end of last year.

The platform's ties to SOEs have proven a vantage point as the firms help propel LinkAja to the forefront of e-payment players in Indonesia's fintech sector, particularly as the COVID-19 health crisis has pushed customers, businesses and markets across the country to switch to cashless transactions.

BRI consumer director Handayani said at Wednesday's press conference that top-up transactions among LinkAja users had grown twofold since the outbreak emerged in Indonesia. In terms of transaction volume, the platform had recorded 700 percent growth.

“Now everyone is using e-wallets because physical money is deemed dangerous as a [vector of] virus transmission,” she said.

Digital banking senior vice president Sunarto Xie of Bank Mandiri said the bank had recorded 2 million top-up transactions totaling around Rp 600 billion in May. He added that Mandiri's collaboration with LinkAja was helping it reach a new customer segment.

“We used to say, ‘This is the unbankable segment’. Why? Because the cost of serving them was greater than the revenue we [made]. Digital [payment] platforms have now transformed that by making the cost to serve very low,” Sunarto said.

“Transactions through MyPertamina and LinkAja consistently rose along with the completion of digital infrastructure at all gas stations,” Pertamina retail marketing director Mas’ud Khamid said during the same event.

He added that Pertamina was pursuing a digitization program for over 7,000 petrol stations and 160,000 liquefied petroleum gas (LPG) outlets to offer the LinkAja payment facility, planned for completion by the end of this month

PT Kereta Commuter Indonesia (KCI), meanwhile, had introduced its own noncash payment facility in 2013 and added LinkAja just last year.

“By ecosystem, up to 70 percent of our service users use the e-money [payment facility]. [Some] of these users use the LinkAja service,” noted KCI commercial vice president Karina Amanda .

She added that in normal times, the Commuter Line transported over 1 million passengers per day. The train service was currently averaging 400,000 passengers per day.

The switch to digital payment systems among the Indonesian public was projected to become a long-lasting trend, said LinkAja's Edward. Entering June, he had seen “quite a significant increase” in e-commerce transactions and utility payments on the platform.

CEO Andi Kristianto of Telkomsel Mitra Inovasi, Telkomsel's venture arm, said that it had been strengthening its technology infrastructure to better cater to fintech payment services like LinkAja.

University of Indonesia economics professor Mohamad Ikhsan, who is also an expert staffer at the SOEs Ministry, pointed out that digitalization would not only help during a crisis, but it would also drive productivity and economic growth.

He noted, however, that the implementation of a digitalization policy would depend on whether access and infrastructure, as well as the bureaucracy, were in ready to support a cashless system.

“It is possible that digitalization will create greater inequality,” Ikhsan also cautioned, as people with a higher level of education would be quicker to adapt to a digital ecosystem.

https://www.thejakartapost.com/news...ollaboration-covid-19-for-extreme-growth.html

 

[Indos]

The merger of 3 state owned Shariah banks will make the new bank become the seven biggest bank in Indonesia. This will also make state owned banks hold majority of top 10 biggest banks in Indonesia where there are 6 state owned there, one private owned bank, and three foreign controlled banks. Number one and two biggest banks in Indonesia are also state owned which are BRI and Mandiri.

State-owned banks form biggest sharia bank in subsidiaries merger - Business - The Jakarta Post

BRI Syariah will be the surviving entity as its publicly listed status will simplify the merger.

www.thejakartapost.com

 

[Indos]

Bank Mandiri to benefit from state-owned sharia bank merger: S&P

Bank Mandiri to benefit from state-owned sharia bank merger: S&P - Business - The Jakarta Post

The move will combine Bank Syariah Mandiri (BSM), BNI Syariah (BNIS) and publicly listed BRI Syariah (BRIS) to form the country’s biggest sharia bank.

www.thejakartapost.com