Update News April 26, 2017

In The News

Terminal 3 to open Garuda’s international flights in May
The Jakarta Post, 26/04/2017

Terminal 3 of Soekarno-Hatta International Airport in Tangerang, Banten will be open for Garuda Indonesia international flights from May 1.

Six gates are prepared for the national flag carrier’s planes.
The very first international flight is scheduled to fly at 6:10 a.m. to Singapore, marking the shift of all Garuda’s flights to Terminal 3 from Terminal 2, said state-owned airport operator PT Angkasa Pura II’s (AP II) operation and technical director Djoko Murjatmodjo on Tuesday.

"We will only open the main building of the terminal for the international flights. That's why it will be only for Garuda Indonesia aircraft," Djoko said.

The shift of all international flights to Terminal 3 is still awaiting the construction of Pier 1 and Pier 2, expected to be completed in July or August, he said.

Terminal 3 is equipped with 65 immigration counters and 30 auto-gates in both the departure and arrival areas.

The terminal also has 17 parking stands for planes, including room to accommodate three large planes like the Airbus A380.

Meanwhile, flight navigation Airnav Indonesia’s operation director Wisnu Darjono said his institution would fully support the operation of international fights at Terminal 3.

He said the terminal had been equipped with an advanced service movement guidance and control system (A-SMGCS) since April 10, which gives precise guidance and control information, such as the distance between the planes and vehicles on land.

Wisnu said with the operation of Terminal 3, he expects airport traffic to increase to 80 movements per hour, up from the current 76 movements. (yon/bbn)

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Singaporean minister in RI for talks on manufacturing, energy, tourism
The Jakarta Post, 26/04/2017

Singaporean Trade and Industry Minister S. Iswaran is on a three-day visit to Indonesia until Wednesday to talk with Indonesian officials about investment in various sectors, including manufacturing, energy and tourism.

The minister met Indonesian Industry Minister Airlangga Hartarto on Tuesday to discuss vocational training cooperation between the two countries to address a manpower shortage at Kendal Industrial Park in Central Java.

The estate is jointly managed by local and Singaporean firms.
He also met with Energy and Mineral Resources Minister Ignasius Jonan to further discuss opportunities for Singaporean firms to tap into liquefied natural gas (LNG) distribution and renewable energy power plant projects.

 “Some of [the potential cooperation] could be in small LNG [distribution] and renewable energy projects for certain areas that are perhaps not fully connected to the grid,” he said after a press conference on startup assistance collaboration held by Singapore-government-backed development body SG Innovate and Singapore-based venture capital firm East Ventures.

Indonesia aims to develop new power plant projects that will generate an additional 35,000 gigawatts of energy within the 2015-2019 period.

Besides those above mentioned sectors, the minister is scheduled to discuss potential investment made by Singaporean firms to develop tourism, including cruise businesses in Medan, North Sumatra, on Wednesday.

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Indonesia, Singapore partner to develop startups
The Jakarta Post, 26/04/2017

Local co-working space EV Hive is collaborating with Singapore's working space BASH to provide places for startups from both countries to develop and thrive. These spaces with assist startups with business development and funding.

"Regional companies based in Singapore can use EV Hive as a launch pad to the Indonesia market. Indonesia companies can use BASH as a stepping stone to access the regional stage," said Willson Cuaca, managing partner of Singapore-based venture capital firm East Ventures, during the launch of the collaborative project on Tuesday. East Ventures manages EV Hive.

Startups at the later stage (series B and above) of development can leverage support from EDBI, the global investment arm of the Singapore Economic Development Board.

East Ventures, BASH management or SGInnovate, a development body wholly owned by the Singapore government, will work on more programs to expand talent, markets and knowledge-sharing for the customers of both co-working spaces.

EV Hive currently manages two co-working spaces in South Jakarta and one in the Breeze mall in Banten. It plans to reach seven offices by the end of the year.

EV Hive has facilitated the development of 36 startups, six of which are Singaporean.BASH, meanwhile, manages an integrated startup space in Singapore, BASH@Block 71.

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Indonesia has become automotive industry investment destination
Antara News, 26/04/2017

The country has become the automotive investment destination, with the national production target set at some 2.5 million units in 2020, Indonesian Minister of Industry Airlangga Hartarto stated."There are three big industries -- Mitsubishi Motor Krama Yudha Indonesia (MMKI), Suzuki, and Shanghai Wuling -- in this cluster.

This indicates that Indonesia is a good investment destination for the automotive industry and offers the perfect momentum to accelerate the industrys development," Hartarto noted in his report while attending the opening ceremony of MMKIs new factory in Cikarang, West Java, on Tuesday.

According to Hartarto, the national automotive production market reaches 1.1 million units, with 200 thousand being exported.
Moreover, the industry has also employed a workforce of around three million in Indonesia.

Airlangga said the automotive industry has become one of the main sectors in the current national industry policy that contributes significantly to the gross domestic product (GDP).In 2016, the automotive industry had contributed around 10.47 percent to the overall non-petrol GDP.

The contribution is the third largest on the list after the food and beverage industry, with 32.84 percent followed by the metal, computers, electronics, optics, and appliances industry, which contributed 10.71 percent.

"This is the reason why the automotive industry will continue to be pushed forward, so it can contribute more to the national economy," Hartarto remarked.

He pointed out that an economic growth of above five percent could benefit the industry amid the sluggish global economic growth.

Meanwhile, MMKI inaugurated a new factory in the Greenland International Center, Central Cikarang, West Java.

According to Hartartos statement, MMKI, with an investment of Rp7.5 billion, has a production capacity of 160 thousand units per year and employs a workforce of three thousand people.

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Cuba calls for Indonesian investment in paper industry
The Jakarta Post, 26/04/2017

The ambassador of Cuba to Indonesia Nirsia Castro Guevara said here on Tuesday that her government welcomes Indonesian investment in supporting Cuban pulp and paper industries.

"Unlike Indonesia, Cuban paper industry has yet to be optimized. Therefore, it would be interesting if Indonesian companies could take this investment opportunity," Nirsia stated at the Embassy of Cuba to Indonesia in Jakarta.

The ambassador, earlier on Friday in a media gathering held by the embassy, noted that the bilateral relation between Indonesia and Cuba needs to be improved by implementing reciprocal measures in various sectors.

"I believe the two governments could involve in mutual action; for example, Indonesia has plenty of experience in establishing its paper mill industry, while Cuba has been advanced in developing its universal healthcare system," she noted.

The ambassador added that her government now has developed a preventive healthcare system which is very important to control many infectious diseases, including diarrhea and ebola.

" Cuba could share its knowledge on preventive healthcare system, which has been adopted in Africa to fight Ebola, regarfing the high rate of mortality because of infectious diseases such as diarrhea in Indonesia, "she reiterated.

She further added that Indonesian investors could visit Cubas International Trade Fair, which is held annually in Oct to know more about investment opportunity in the country.

"The trade fair facilitates Cuban companies to meet foreign investors from many countries, including South Korea, China, and Malaysia. During last years event, there were two participants from Indonesia," she stated.

During the event, the ambassador also promoted Cubas tourism by promoting several attractions, including salsa and ballet dance festivals, as well as introducing some of the beautiful natural landscapes and historical heritages.

"The idea is to develop multifaceted and diverse tourism not only to exhibit the natural landscape but also the heritage and healthcare system as tourist attractions," the ambassador pointed out.

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Central government`s debts reach Rp3,649.75 trillion
The Jakarta Post, 26/04/2017

The central governments debts reached Rp3,649.75 trillion as of March 2017, up Rp60.63 trillion from a month earlier, according to the Finance Ministry.

The debts came from state securities worth Rp2,912.84 trillion, or 79.8 percent, and loans worth Rp736.91 trillion, or 20.2 percent, the ministrys directorate general of financing and risk management said in a press statement released on Tuesday.

Compared to Feb 2017, the debts increased Rp60.67 trillion, resulting from the issuance of net state securities worth Rp64.04 trillion and a decline in net loans worth Rp3.41 trillion.

The additional debts in the year till March 2017 reached Rp138.60 trillion, comprising Rp132.33 trillion from the issuance of state securities and Rp6.37 trillion from new loans.

Meanwhile, debt repayments in the year ended March 2017 reached Rp84.13 trillion, consisting of mature debt principal worth Rp51.36 trillion and interest worth Rp32.77 trillion.

The indicator of debt risk in March 2017 showed that the ratio of debts to variable rate is 12 percent of the total debts.In terms of exchange rate risk, the ratio of foreign currency debts to the total debts is 42 percent.

In addition, the average time to maturity reached nine years, with the debts due in five years accounting for 36.6 percent of the total outstanding debts.

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Malaysia Eyes Indonesian Properties, Oil and Gas, and Toll Roads

TEMPO.CO, Jakarta - Malaysia-based construction company Eversendai expressed its interest in investing in Indonesian properties, oil and gas, petrochemical, electricity and EPC (engineering, procurement, and construction) projects.

"They are also interested in establishing a medium-scale joint venture with Indonesian companies," Villages, Disadvantaged Regions and Transmigration Minister Eko Putro Sandjojo said in press release after a meeting with Eversendai on Tuesday, April 25, 2017.

According to Eko, details related to the projects had been discussed with a number of state-owned developers on Tuesday, April 25, 2017. A follow-up meeting will be held in Jakarta in early May.

Eversendai earlier had handled a number of huge projects, such as Petronas Twin Tower 2, Burj Al-Khalifa, Caital Gate, and the New Doha International Airport. Currently, Eversenda is working on the tallest building in Malaysia, Merdeka PNB 118.

Another Malaysian infrastructure and construction company United Engineers Malaysia Groupo BHD (UEM), a subsidiary of Khazanah Nasional Berhad, is currently working on the Cierbon-Palimanan toll road with PT Lintas Marga Sedaya.

UEM will also attend the follow-up meeting in Jakarta in May 2017 with PT Pembangunan Perumahan and PT Wijaya Karya to discuss a number of toll road construction projects, such as the Serang-Panimbang Highway and the Bandung Intra Urban Highway.

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Jokowi to Attend 30th Asean Summit Focused on Regional Connectivity, Developments

President Joko "Jokowi" Widodo will attend the Association of Southeast Asian Nations Summit thigs week in Manila, where leaders of ten Southeast Asian countries are expected to discuss regional connectivity and diplomacy, and address both regional and international challenges.

This year marks the 30th year of the Asean Summit, and also the association’s 50th anniversary. The summit will take place in Manila on April 26-April 29 since the Philippines currently holds the Asean chairmanship.

According to Asean cooperation director general Jose Tavares, Jokowi will attend meetings to discuss a variety of issues on Saturday (29/04).

One of the topics for discussion is finding ways to increase economic, social and infrastructural connectivity in the region, and to improve sense of ownership among Asean residents. Another discussion will address regional diplomacy and the thorny issue of Asean centralization.

"The summit will discuss regional and international issues. Indonesia will get a chance to share its perspectives as we face an increasingly fluid world and uncertain geo-political and geo-economic situations," Jose said during a press briefing at the Ministry of Foreign Affairs in Jakarta on Tuesday.

Jose also said Asean leaders will likely touch on the problems of transnational crime, migrant workers, the South China Sea dispute and increasing tension in the Korean Peninsula during the summit.

Demand on the Asean Secretariat to foster regional and interregional growth has risen in recent years, but funding for Asean remains relatively small at $20 million annually.

As a comparison, the European Union receives a funding of around $140 billion in 2015 and between $120-$130 billion the year before.

Under the Philippines's chairmanship, Asean currently sets six priority areas: a people-oriented, people-centered Asean, peace and stability in the region, and maritime security and cooperation.

Sub-regional organizations

Jokowi will also attend meetings during the summit with two sub-regional initiatives, the Brunei Darussalam-Indonesia-Malaysia-Philippines East Asean Growth Area (BIMP-EAGA) and the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT).

These meetings, scheduled for an hour each on the sidelines of the Asean summit, will launch new visions and plans for both initiatives.

BIMP-EAGA has already set a long term plan until the year 2025, while IMT-GT will soon finalize a similar plan for 2036.

Both will focus on building well-connected infrastructure and a resilient region capable of adopting sustainable development practices.

According to Asean's director of cooperation for Asia Pacific and Africa, Benyamin Carnadi, the new visions will strengthen trade relations in the region.

"Traditionally these countries have had trade relations for centuries, but we will further strengthen that, especially with infrastructure development in the sub-regions," he said.

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Freeport Hit by Indonesia Export Ban, Permit Talks to Start
Tempo.co, 26/04/2017

McMoRan, the world's biggest publicly listed copper miner, reported first-quarter results on Tuesday (25/04) that reflected a months-long Indonesian export ban at its massive Grasberg mine, which clipped sales.

Freeport, which resumed copper concentrate exports from Indonesia on Friday after securing a six-month permit, said it will immediately begin negotiations with Jakarta on a long-term license for Grasberg, the world's second-biggest copper mine.

New rules in Indonesia require miners to divest a 51 percent stake in their operations, relinquish arbitration rights and pay new taxes and royalties.
Freeport has said it will only agree to a new permit with the same fiscal and legal protection in its current contract.

Freeport said it had cut costs, reduced its workforce and slowed spending on underground development and a new smelter in the Southeast Asian nation.

If it secures an agreement, Freeport expects to spend about $1 billion annually for the next five years on Indonesia developments. Without a deal, it said that spending will be significantly cut or deferred.

Adjusted first-quarter profit was $220 million, or 15 cents a share, compared with a loss of $196 million, or 16 cents, in the same period last year.

Indonesia's export ban, which began Jan. 12, meant deferred sales of 190 million pounds of copper and 280,000 ounces of gold.

Consolidated sales of 809 million pounds of copper and 182,000 ounces of gold lagged Freeport's January forecast of 1 billion pounds of copper and 460,000 ounces of gold.

Revenue notched up to $3.34 billion in the quarter, slightly lagging analysts' average estimate of $3.46 billion.

For 2017, Freeport expects sales of some 3.9 billion pounds of copper and 1.9 million ounces of gold, including second-quarter sales of 1 billion pounds of copper and 440,000 ounces of gold. The full-year outlook lags a January estimate of 4.1 billion pounds of copper and 2.2 million ounces of gold.

Capital expenditure of $1.6 billion in 2017 is down from a previous $1.8 billion estimate and well below $2.8 billion in 2016.

Some $700 million of the 2017 spend is earmarked for underground development at Grasberg, which hinges on securing long-term operating rights.

Freeport, which has sold a string of assets to repair its balance sheet, had $15.4 billion in debt and $4 billion in cash at quarter-end. Two years ago, its debt reached $20.9 billion at June 30, exceeding its $15.7 billion market value.

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