Update News July 12, 2017

In The News


Indonesian delegation negotiating increased exports of oil palm products to Japan

The Jakarta Post, July 12, 2017

A worker checks fresh oil palm fruit bunches on a truck soon after harvest for PT Wanasawit Subur Lestari in Pangkalan Bun, East Kalimantan.Indonesia is seeking to seal a deal to export more oil palm products to Japan, especially products that can be used as biomass, amid the latter’s growing appetite for renewable energy power generation.

An Indonesian delegation, which comprises representatives from the Energy and Mineral Resources Ministry, the Trade Ministry, the Indonesian Oil Palm Estate Fund (BPDP-KS) and various other associations, is visiting Tokyo and Osaka between July 10 and July 14 to conduct business meetings with at least 30 major Japanese importers.

Dikki Akhmar, chairman of the Indonesian Palm-Kernel Shell Business Association (Apcasi), said in a statement on Tuesday that his side expected to reach an agreement to supply palm-kernel shells for five biomass power plants in Japan with a combined capacity of 320 megawatts (MW) of electricity over the next 10 years.

At present, renewable energy accounts for 14.6 percent of Japan’s national energy mix, 2 percent of which comes from bioenergy. 

The country aims to increase its renewable energy portion to 25 percent by 2030, with bioenergy contributing 4 percent of the total figure.

Therefore, demand for palm-kernel shells among Japanese companies has grown by more than 40 percent annually within the past three years, says Bayu Krisnamurthi, chairman of the Association of Agriculture Experts (Perhepi).

“Indonesia’s exports of palm-kernel shells reached 450,000 tons to Japan and 400,000 tons to South Korea in 2016, with a combined export value of more than Rp 1 trillion [US$74.93 million],” Bayu said. (bbn)

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Indonesian Crude Price projection approved at $48 per barrel

The Jakarta Post, 12 July 2017

The House of Representatives budget committee has approved the assumption of the Indonesian Crude Price (ICP) at US$48 per barrel, lower than the proposed figure in the revised 2017 state budget of $50 per barrel.

However, an ICP of $48 per barrel is higher than the government’s deal with House Commission VII overseeing energy, set at $46 per barrel.

The new ICP assumption is a conservative decision as it is the midpoint between two previous figures, Banggar deputy chairman Said Abdullah said.

Read also: Govt braces for big reimbursement from Mahakam, Jangkrik fields“An ICP of $48 per barrel will change the government’s calculation of state revenues than if the ICP was set at US$46,” Suahasil Nazara, the Finance Ministry’s fiscal policy head, said on Tuesday during a meeting at the House of Representatives complex in Jakarta.

The new set ICP assumption will allow for broader fiscal space for government spending, Suahasil added.

On the same day, Banggar and the government also decided on oil and gas production and lifted assumptions to 815,000 barrels of oil per day (bopd) and 1.15 million barrels of oil equivalent per day (boepd).

They also agreed on the basic assumptions of economic growth at 5.2 percent, inflation at 4.3 percent, the rupiah exchange rate at Rp 13,400 per US dollar and the interest rate for three-month treasury bills at 5.2 percent. (bbn)

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Russia to construct railways in East Kalimantan

The Jakarta Post,12 July 2017

Balikpapan, East Kalimantan, Railway company PT Kereta Api Borneo, a subsidiary of Russian Railways, is set to build a 575-kilometer railway system with total investment reaching US$2 billion.

The railway network will pass through four regencies across the province.They will be divided into two lanes, namely the North Lanes that will stretch for about 305 km and the South Lanes that will be around 270 km,” Kereta Api Borneo president director Sergey Kuznetsov said in Balikpapan on Monday.

He further explained that the North Lanes will connect Tabang, a remote district in Kutai Kartanegara regency, to Maloy, a coastal area in East Kutai. Meanwhile, the South Lanes will start from Melak in West Kutai and end in Buluminung, North Penajam Paser. Construction of the two lanes is expected to be completed by 2022, he added.

“At this time, we have completed a number of studies, such as geophysics and hydrology. We also have taken and tested 2,000 soil samples from areas where the lanes will be built,” said the company’s construction and business development head Vladimir Volkov.

The two railway lanes will be used to transport goods, in particular natural resources such as coal and crude palm oil. The railways will be used to carry passengers at least five years after it begins operations in 2022.   

“Operating a passenger train needs a much more complicated permit and comprehensive cooperation with state-owned railway company PT Kereta Api Indonesia,” said East Kalimantan Governor Awang Faroek Ishak. (foy/ebf)

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VP Kalla inaugurates Wuling Motors Factory

Antara News, 11  July 2017

Vice President Jusuf Kalla has inaugurated a Chinese automotive factory PT SGMW Motor Indonesia or Wuling Motors in Cikarang industrial area of Bekasi District, West Java Province.

"Congratulation to all staffs and employees for the operational of the factory. I appreciate the fast construction of this factory for two years," Kalla said here on Tuesday.

Kalla was accompanied by Industrial Minister Airlangga Hartarto, West Java Governor Ahmad Heryawan and Director PT SGMW Indonesia Xu Feiyun.

company will produce Confero S type car in the factory as their first production for Indonesian market.

Wuling Motors has started the construction in August 2015 with a total investment of 700 million US dollars in a 60 hectares of land.

Wuling Motors currently carries 15 international component suppliers to Indonesia and also worked with more than 20 local component suppliers.

Additionally, Minister Hartarto said the Wuling Motors is a joint ventures from three companies such as SAIC Motor Corporation Limited, General Motors and Guangxi Automobile Group.

"The factory targeting domestic market and foreign market. Wuling motors also employs 3,000 workers," Hartarto added.

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Jakarta Soon to Have Waste Generated Power Plant

TEMPO.CO, 12/07/2017

The number one environmental problem in any urban area is waste management, which is why Jakarta will attempt to turn it into energy through a waste generated power plant. The plant will be established in Sunter, North Jakarta.

Maritime Sovereignty Coordination Deputy, Arif Havas Oegroseno, said that the Ministry of Maritime Affairs is set to build the waste plant in Sunter. Although he isn’t sure when the facility would be built.

h “We’ll build one for starters, the plant would produce electricity from 2,000 tons of urban waste. It will be able to generate 60 MW of electricity,” said Arif Havas on Tuesday, June 11.

The program, according to Havas, is inspired by major cities in countries such as Sweden, Norway, and Denmark that are already practicing the environmentally friendly project.“Norway is the frontrunner in environmental concerns, Denmark has even imported waste from France,” said Havas. Closer to home, Asian countries such as Singapore has already established five waste plants.

The emissions produced by waste plants, according to Havas, is not more than a tenth of the pollution produced during a new years’ eve celebration.

Previously, the Supreme Court (MA) granted citizen’s plea to cancel the President’s Regulation No 18 on the accelerated construction of waste generated power plants in Jakarta, Tangerang , Bandung, Semarang, Surakarta, Surabaya, and Makassar under the assumption that such power plants would not be environmentally friendly.

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American-Chinese Joint Venture Opens First Car Factory in Indonesia

Jakarta Globe, 11/07/2017

Jakarta. SGMW Motor Indonesia, a local joint venture between the United States's General Motors and China’s SAIC Motor and Wuling Motors, inaugurated its first manufacturing facility in Indonesia on Tuesday (11/07), marking the beginning of the parent companies's four-year plan to take a slice of the second largest car market in Southeast Asia.

SGMW will make Confero S, a seven-seater multi purpose vehicle which will compete head-to-head with perennial Indonesian favorites Avanza and Xenia, produced by Japanese car-makers Toyota and Daihatsu respectively.

"The construction of Wuling Motors' first factory outside of China demonstrates our strong and long-term commitment to enter the Indonesian market. 

With a total of 3,000 local workers, we are ready to contribute to the growth of the Indonesian economy, especially the automotive industry," SGMW Motor Indonesia President Xu Feiyan said at the opening of the SGMW factory in Cikarang, an industrial zone just outside Jakarta on Tuesday (11/07).

Xu said the 60-hectare plant in Cikarang comprised two main facilities roughly of equal size, a manufacturing plant and a supplier park. The factory has a production capacity of 120,000 cars per year.

SAIC has a controlling 50 percent stake in the joint venture. GM has 44 percent and Wuling the rest. The companies invested $700 million to build the new factory.

SGMW will also be working with around 20 local component manufacturers and 15 international component makers that Wuling brought to Indonesia to set up shop and supply its factory here. Xu said the company plans to work with more local component suppliers in the future."As we can now commence mass production, we will be launching our first product in the very near future," Xu said.

The company is showcasing the Confero S at the 2017 Jakarta Fair expo from June 9 to July 16. The basic Confero S model is sold for Rp 130 million ($9,700).

SGMW said earlier it wants to control 10 percent of the Indonesian car market by 2022. 

Indonesian manufacturers sold 1.06 million cars last year, behind neighboring Thailand's 1.9 million. Local carmakers are expecting car sales to rise just slightly to 1.1 million this year, as Indonesian customers's purchasing power is unlikely to recover to full strength this year.

Toyota is the market leader in the Indonesian automotive industry, with a market share of 36 percent.

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Plans in store to further develop Lake Toba

The Jakarta Post, 11 July 2017

Coordinating Maritime Affair Minister Luhut Pandjaitan recently held a meeting with the Toba Single Tourism Authority to discuss Lake Toba's tourist development.

International flights need to be made available to cater to the increasing number of tourist arrivals. I received a report that more than 260,000 visitors visited Samosir Island in 2016,” said Luhut.

The minister also urged all parties to work together to build a runway extension at Silangit Airport. “Garuda Indonesia and other airlines have stated their intention to open up international flights [at Silangit Airport],” he said.

Meanwhile, Tourism Minister Arief Yahya said Silangit Airport was set to transform into an international airport this September.“A 142 hectare plot of land has been prepared for the runway’s extension,” he added.

Meanwhile, state-owned public transportation operator PT Damri is slated to provide bus services from Silangit Airport to the city of Siantar in North Sumatra. Plans are also in store to open up a train service from Lubuk Pakam to Siantar.At the meeting, Luhut also brought up the issue of water pollution in Lake Toba.

“A study we conducted with the World Bank shows deteriorating pollution levels [in Lake Toba],” said Luhut. (kes)

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Indonesia to Promote Cultural Diplomacy at Europalia Festival

Tempo.co, 12 July 2017

Indonesia will conduct cultural diplomacy at Europalia, Europe largest art and cultural festival to be held from October 10, 2017, to January 21, 2018.

"This event will offer room for cultural diplomacy and serve as a promotional space for creative industries in the field of art and culture," Idham Setiyadi from the Europalia Scientific Committee stated on Tuesday.

Indonesia will showcase traditional and contemporary culture of the 400 best artists ranging from fields, such as painting, music, installation, film, and dance. They will feature the diversity of Indonesian art and culture.

They will also present more than 226 works and programs to be enjoyed by art lovers in various cities in Belgium and its surrounding areas.

Also on the agenda are some exhibitions, including the Ancestor and Archipel.The Ancestor exhibition will feature the diverse ways in which Indonesians venerate their ancestors.

The Archipel exhibition will showcase the maritime culture of Indonesia that has existed since thousands of years.

Setiyadi said the Europalia International views Indonesia as being a multi-ethnic and multi-religious country that deserves the attention of European society.

The Europalia International is optimistic that the participation of Indonesians in the festival would strengthen relations between Indonesia and the European countries and also enhance mutual understanding among the people.

Hence, the 2017 Europalia, in which Indonesia will be the only guest nation, is expected to offer double benefits in the fields of economy, social affairs, and cul

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