Updates News July, 11, 2017

In The News

 

 

Bank Indonesia Issues National Payment Gateway Regulation

Jakarta Globe 11/07/2017

The central bank published a new national payment gateway regulation on Thursday (06/07) in a bid to provide an efficient and secure payment system for banking customers in the country.

"We need to organize the infrastructure, institutions, instruments and mechanisms to build a resilient, integrated national payment system," said Onny Widjanarko, head of the transformation program at Bank Indonesia.

The regulation contains an explanation of its purpose, identification of the institutions related to the NPG, supervision and sanctions.

Onny said the regulation seeks to make transactions easier and cheaper for banking customers by allowing all electric money, debit and credit cards of any issuers to be accepted at any automatic teller machine, electronic data capture device or payment gateway in the archipelago once the regulation is fully implemented.

"You can imagine how many cards you need to keep in your wallet now. With NPG, it doesn't need to be like that anymore," he said.

There are currently hundreds of debit card issuers, 26 credit card issuers and 25 electronic money issuers in Indonesia, with most of them being local players.

Most of ATM and debit principals – which provide infrastructure – are also local companies, while the credit card principals are all units of foreign companies, such as JCB Internasional Indonesia, Mastercard Indonesia, UnionPay Indonesia and Visa Worldwide Indonesia.

According to the new regulation, foreign principals need to work with local switching companies such as Artajasa Pembayaran Elektronis, Alto Network and Rintis Sejahtera.

Bank Rakyat Indonesia, Bank Mandiri, Bank Negara Indonesia, Bank Central Asia – which represent 75 percent of all domestic debit transactions – and the national principals acting as switching companies, signed a memorandum of understanding in December in support of the central bank's plan to implement its NPG initiative.

Eni V. Panggabean, head of the payment system policy and oversight department at Bank Indonesia, said other countries that have implemented similar systems include China (with China Union Pay), Malaysia (MyCard) and Japan (JCB).

"We are indeed a little behind but there is no such thing as too late," Eni said.She added that Indonesia needs more time to prepare for the implementation due its population of more than 250 million people.

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Sinarmas acquires £188.6m worth of property in London

 The Jakarta Post 11/07/2017

Sinarmas Group through its Singapore-based Sinarmas Land Ltd. has acquired a property in Central London worth £188.6 million (US$42.56 million).

Sinarmas acquired the property, 33 Horseferry Rd, owned by Horseferry Property Ltd. through share purchases on June 29."We are optimistic about the property market in London.

It is an interesting opportunity as 33 Horseferry Rd is full of well-known tenants," Sinarmas Land Ltd. chief financial officer Ferdinand Sadeli said in a statement on Monday.

The building is six stories, has a basement and a total area of 16,778 square meters, comprising 15,223 square meters of office area and 1,564 square meters of retail space.

The UK Department of Transport has a 17-year lease for the office area. Retail tenants include National Westminster Bank, Pret a Manger sandwich shop, Starbucks and William Hills bookmaker.

Tenants are on full repairing and insuring leases, which require them to carry out maintenance and insure their respective space.With the acquisition, Sinarmas Land now controls 46,000 square meters of commercial space in Indonesia and abroad. 

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Russian group arrives for Indonesian immersion program

The Jakarta Post 11/07/2017

 

Twenty-eight Russian nationals have arrived in Jakarta on an Indonesian language and culture immersion program until the end of July.

The group, consisting of teachers, students and activists from Moscow, will be attending a Bahasa Indonesia enhancement event at the Linguistics Strategy and Diplomacy Development Center in Sentul, Bogor, West Java, from July 10-21, followed by visits to several regions in Indonesia.

According to Antara news agency, the group will proceed to the city of Kendari in South Sulawesi, where they will establish cooperation with local universities from July 21-25, and then will be in Palu in Central Sulawesi from July 25-27 to host interactive events with students and teachers.

The team will be staying at homestays during their visits to Palu and Kendari in order to better learn about the local culture, Antara reported.

The visit was initiated by the Indonesian Embassy in Moscow, the Indonesian School of Moscow and the Language Coaching Development Agency, as well as the Culture and Education Ministry, in a bid to promote the Indonesian language and culture in Russia.

In a recent meet and greet event held with the team at the ambassador's residence in Moscow, Indonesian Ambassador to Russia and Republic of Belarus Wahid Supriyadi expressed his appreciation for the group's interest in learning Bahasa Indonesia, although none of them had ever visited Indonesia before.

He also remarked that such cultural diplomacy events could be developed further in order to bring people of the two countries closer.

Supriyadi added, “I believe that you will be happy to live for a month in Indonesia. Russians need to wait for eight months to enjoy the summer, but it is summer the whole year around in Indonesia, so you can sit in a café every day.” (mas/ke

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Russia to build 575-kilometer railway track in E Kalimantan

Antara News 11/07/2017

Russian Railways and its subsidiary company in Indonesia, PT Kereta Api Borneo, have planned to develop a 575-kilometers train track that would cross four sub-districts in the area, with a total investment of US$2 million.

"There will be two train tracks; first is the Northern line of 305 kilometers and the second is the Southern line of 270 kilometers," CEO of PT Kereta Api Borneo, Sergey Kuznetsov, stated in Balikpapan on Monday.

The Northern line will connect the Tabang area in Kutai Kartanegara, with Maloy in the coast of East Kutai, while the Southern line will start from Melak in West Kutai and end in Buluminung in the Penajam Paser Utara area.

The construction itself is expected to be completed by 2022."At the moment, we have completed a number of studies including geophysics and hydrology. 

We have also tested 2 thousand different soil samples along the track locations," Head of the companys Business and Development Vladimir Volkov noted.

Both tracks will be used for the transportation of goods, including natural resources such as Crude Palm Oil (CPO) and coal.Five years after transportation of goods, the railway would start carrying passengers as well.

Governor of East Kalimantan Awang Faroek Ishak explained that there should be a complex process to gain permit and a more comprehensive cooperation with PT Kereta Api Indonesia for the carriage to be able to transport passengers.

The governor further stated that at the end of the Northern line in Maloy of the East Kutai coast, a harbor will be built.

"There will be a harbor, coal stockpile, and moving facilities such as rolling belts and cranes, both in Maloy and Buluminung. They will have the capacity of 5 million tons per year," he elaborated.

Furthermore, it has been previously reported that along the sides of both planned tracks, there will be mines owned by large mining corporations.

For example, there is a mine owned by PT Gunung Bayan Pratama, a corporation owned by a Malaysian businessman Dato Low Tuck Kwong, along the Southern line.

On the Northern line track location, there are mines that are being managed by PT Kiradin and Kaltim Prima Coal (KPC), which manages the largest open pit coal mining in the world.

The track will also pass by a number of palm oil plantations that are managed by the company."We are allowing PT Kereta Api Borneo to speak Business-to-Business with the corporations mentioned.As a representative of the government, we will provide as much facility as we can," Awang explained.

Russian investors are no strangers to Indonesias region of East Kalimantan. In the era of the countrys first president Soekarno, Russians had taken up a number of projects.

One of the well-known ones until today include the Balikpapan-Samarinda road project, which is 110 kilometers long.

A lot of expatriates and senior citizens still refer to the road as the Russian road, while today, people refer to it as the Soekarno-Hatta road. 

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Electricity firm PLN to offer tender for 6,000 MW power plant

The Jakarta Post 11/07/2017

State-owned electricity company PLN has announced a plan to hold a tender for a power plant construction project with a capacity of 6,000 megawatt (MW).

The project is part of the government’s 35,000 MW electricity procurement program scheduled for completion by 2019 or 2020.

The tender will be directed more toward mine-mouth power plants because they offer a faster process of power yields and cheaper costs as no logistic fees will be charged, said PLN’s procurement director Supangkat Iwan Santoso.

“[A tender] for a mine-mouth power plant with a capacity of 6,000 MW is expected to be finished this year,” Supangkat said as quoted by kontan.co.id over the weekend.

The largest existing mouth-mine plants are designed with average capacities of about 300 MW, said Supangkat.

The tender will not include power plants IX and X in Southern Sumatra, which are supposed to yield High-Voltage Direct Current power for Java, he added.

For the rest of 2017, there will be no other tender for power plants with capacities above 1,000 MW, said Supangkat.

“We hope that several 300 MW [power plants] in South Sumatra, Riau, Jambi and North Sumatra will be put up for bid by the third or fourth quarter,” he said. (dea/bbn)

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Bandung Institute of Technology to build innovation park

Antara News 11/07/2017

The Bandung Institute of Technology (ITB) receives 6,027 square meter land as grant from PT Summarecon Agung to develop an innovation park.

The grant is contained in an agreement signed by the President Director of PT Mahkota Permata Perdana, Herman Nagaria, and Secretary General of the Ministry of Research, Technology and Higher Education, Ainun Naim, here on Monday.

"This agreement is very important to develop science and technology area to facilitate joint technological researches and develop innovations among researchers, universities and business world," Ainun said.

Business incubation in science and technology area is expected to generate small and medium entrepreneurs or technology-based start-up business."So, the park can grow the economy around it," Ainun said.

She added that the ministry is cooperating with various parties including business world or industry which have interests in the development of science and technology. 

ITB and Summarecon have signed a Memorandum of Understanding on December 11, 2015. Summarecon grants a plot of land to the ministry as a government institution that oversees universities.

ITBs Rector, Kadarsah Suryadi, said ITB has now moved from research university to entrepreneurship university.

ITB Innovation Parks will focus on developing smart and creative industry and several areas, including animation, smart city supporting technologies, radar and health equipment.

Summarecon Presidents Commissioner, Soetjipto Nagaria, hoped ITB Innovation Park can be a backbone and pilot for other areas in Indonesia, and can contribute greatly to the development of creative economy in Indonesia.

"I hope that from ITB Innovation Park there will be entrepreneurs in technology, and Bandung Teknopolis can become Indonesias sillicon valey," Soetjipto said.(

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Indonesia Invites South Korean Investors

Tempo.co 11/07/2017

Indonesian Minister of Industry Airlangga Hartarto has visited South Korea to seek business deals and attract South Korean investors to Indonesia.

Indonesia is offering investment opportunities to South Korea for developing its industry outside Java, such as the Sei Mangkei Economic Zone in North Sumatra and the Morowali Industrial Park in Central Sulawesi.

"We are focusing on accelerating the development of industrial estates outside Java, as an effort to carry out equitable national economic development," Airlangga noted in a written statement in Jakarta last Wednesday (July 5).

Based on the records of the Investment Coordinating Board, South Korea is the third-largest investor in Indonesia. In the manufacturing sector, South Korean companies contribute up to 71 percent of the total investment over the past five years amounting to US$7.5 billion.

The factories are able to absorb a workforce of 900 thousand people. Apart from the industrial areas, Airlangga also invited South Korean investors to boost the e-commerce business in Indonesia in order to spur the development of small and medium industries in the country.

Airlangga said South Koreas conglomerate Lotte is keen to change its main export destination from China to Indonesia due to high competition in the domestic Chinese market.

"We have also proposed that South Korean cosmetics companies can expand into Indonesia. For instance, for the packaging process," he said.

In fact, Lotte is interested in doing business in the financial sector.This can be achieved through the approval of the financial authority. 

It could be most easily realized through multi finance. We also offer them an opportunity at a startup level if the investors are keen to build a financial company, similar to Japanese firms, such as Softbank, according to the minister.

He said Indonesia is now intensively developing its industrial zones. The industrial area is included in the list of national strategic projects whose development will be accorded priority.

Airlangga made the remarks as a speaker while addressing the 8th Asian Leadership Conference bearing the theme of "Invest in Indonesia: Nation of Abundant Natural and Human Resources" in Seoul, South Korea.

The development of industrial estates, especially outside Java, has a significant role to accelerate the ideals of the government to realize equitable development in Indonesia.

Moreover, Indonesia has managed to achieve investment-grade rating or investment worthiness awarded by the international rating institution S&P.

"The government has prepared several areas to become new industrial centers. For instance, the industrial areas of Kuala Tanjung and Sei Mangkei that can attract investment for the region of Sumatra," he explained.

The industrial areas of Morowali in Central Sulawesi and Bitung in North Sulawesi are expected to become industrial development zones for the Eastern region.

The Sei Mangkei industrial area covers 2,002 hectares (ha), with an investment of Rp9.5 trillion, and is focused on the development of the crude palm oil (CPO) processing industry.

Meanwhile, the industrial estate of Morowali sits on an area of 1,200 ha, with an investment of about Rp49.7 trillion. It is focused on the development of the ferronickel industry.

Airlangga assessed that the prospects of industrial development in Indonesia are still promising, as the demand for industrial land is increasing. To this end, industrial areas must be interconnected and integrated.

"Hence, industrial area operators must forge synergy with the local government in solving various problems that arise," he explained.

The minister made assurances that if these efforts are well implemented, they can improve the competitiveness of industrial areas as well as have multiple impacts on the regional and national economy.

"In the next three years, we also encourage the accelerated development of industrial estates in Tanjung Buton, Tanah Kuning, Gresik, Kendal, and Serang," he said, related to the foreign investors.

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BJB Issues Rp2.5tn Sustainable Bonds in Q4

Tempo.co 11/07/2017

Bank Pembangunan Daerah Jawa Barat and Banten or BJB will issue sustainable bonds worth Rp2.5 trillion in the fourth quarter of 2017.

BJB president director Achmad Irfan that Rp1.5 trillion will be issued in the form of senior bonds while the remaining Rp1 trillion is released as subordinated bonds. The entire proceeds will be allocated for credit expansion.

"The coupon will adjust the market because our rating is not out yet. We hope it will go up to double-A, to be more efficient," he said in Jakarta, Monday.

This year's bond issuance will be the first phase of the company's sustainable plan until the second phase in 2018. The total value of bonds to be released this year is Rp4.5 trillion.

The bond issuance is a fund-sourcing plan to support BJB's credit expansion until 2018. The company is optimistic that its loan portfolio will be able to keep up with the banking industry's development pace.

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Indonesia`s industrial zones await Japanese investment

Antara News 11/07/2017

Indonesia has continued to develop special industrial zones (KEKs) where it provides investment facilities to investors, including those coming from overseas.

Several regions in the country have proposed to the government to open KEKs to accelerate their economic development. Currently, the government has approved at least 11 KEKs, with a total investment of Rp221 trillion. 

In order to further boost investment in the countrys KEKs, Indonesia is promoting the potential of its economic zones abroad to attract foreign investment. 

After his trip to South Korea, Minister of Industry Airlangga Hartarto visited Japan to seek additional investment for the industrial sector in Indonesia.

"Yesterday, we met Jetro (Japan External Trade Organization) President as well as the board of directors of Sojitz Corporation. We invite them to continue to increase their investment in Indonesia," Hartarto said a written statement in Jakarta on Saturday (July 8).

Several industrial areas in Indonesia are open to receiving foreign investment, including from Japan.

Indonesia expects industries from Japan, such as those engaged in metal mineral processing, power generation, coal gasification, petrochemicals, and glass, to invest in the countrys industrial sites that have been readied.

The industrial estates, among others, comprise the Dumai industrial area in Riau Province that has a 50-megawatt capacity power plant, crude palm oil (CPO) terminal, and waste treatment facility. This area can be used for the development of coal and oleo chemical gasification industry.

Indonesia is also offering the Industri Java Integrated Industrial Port Estate (JIIPE). The JIIPE Industrial Estate in Gresik, East Java, has a total area of 2,933 hectares (ha) and is supported with 23-MW and 500-MW power plants. Equipped with residential areas and ports, the zone is designed as an area for heavy industry and machinery.

Furthermore, it offers the Kendal industrial area in Central Java, with an area of 2,700 ha, and is located adjacent to the port of Semarang.The furniture, food, and garment industries will be developed in this area.

"With competitive labor wages, this industrial area will have an advantage over other regions," Minister Hartarto pointed out.

He also offered the location of the Bontang industrial estate in East Kalimantan. According to Hartarto, this area will be developed for the coal gasification industry. Supported by an area of 265.6 ha, an oil and gas service industry is being built in the region. 

Indonesia wants Japans existing industry in the country to strengthen its supply chain, so that it will help meet the need for domestic raw materials. Hence, an increase in investment is expected.

The country is not only pursuing capital investment from large-scale manufacturing companies but it is also expecting that increased economic cooperation with Japan will target the development of technology and innovation, human resources, and small and medium industries in the country.

"We explained that Indonesia has an immense market and business potential today," Minister Hartarto remarked.

The Indonesian government is committed to creating a conducive investment climate and offering ease of business through deregulation and packages of published economic policies. 

"We are optimistic that the economy in Indonesia will improve this year, especially with the decline in the industrial gas prices and rising trend in commodity prices," he stated.

In the last six years, Japans total investment in Indonesia has reached US$19.7 billion. The number of Japanese companies in Indonesia to date has reached more than 1,750, with its business activities in manufacturing, infrastructure, and services sectors.

In 2016, the value of Japanese investment in Indonesia amounted to $5.4 billion, or an increase of 86 percent as compared to $2.9 billion in the previous year.

Some Japanese industries are quite active in investing in Indonesia, including in the automotive, metal, machinery, and electronics sectors.

In the meantime, during his visit to South Korea last week, Hartarto had sought to attract South Korean investors to expand their business to industrial areas outside Java, such as the Sei Mangkei Economic Zone in North Sumatra and the Morowali Industrial Park in Central Sulawesi.

"We are focusing on accelerating the development of industrial estates outside Java, as an effort to carry out equitable national economic development," Hartarto pointed out.

The development of industrial estates, especially outside Java, has a significant role in accelerating the ideals of the government to realize equitable development in Indonesia.

"The government has prepared several areas to become a new industrial center. For instance, the industrial areas of Kuala Tanjung and Sei Mangkei that can attract investment for the region of Sumatra," he explained.

The industrial area of Morowali in Cen Indonesia has continued to develop special industrial zones (KEKs) where it provides investment facilities to investors, including those coming from overseas.

Several regions in the country have proposed to the government to open KEKs to accelerate their economic development. Currently, the government has approved at least 11 KEKs, with a total investment of Rp221 trillion. 

In order to further boost investment in the countrys KEKs, Indonesia is promoting the potential of its economic zones abroad to attract foreign investment. 

After his trip to South Korea, Minister of Industry Airlangga Hartarto visited Japan to seek additional investment for the industrial sector in Indonesia.

"Yesterday, we met Jetro (Japan External Trade Organization) President as well as the board of directors of Sojitz Corporation. 

We invite them to continue to increase their investment in Indonesia," Hartarto said a written statement in Jakarta on Saturday (July 8).Several industrial areas in Indonesia are open to receiving foreign investment, including from Japan.

Indonesia expects industries from Japan, such as those engaged in metal mineral processing, power generation, coal gasification, petrochemicals, and glass, to invest in the countrys industrial sites that have been readied.

The industrial estates, among others, comprise the Dumai industrial area in Riau Province that has a 50-megawatt capacity power plant, crude palm oil (CPO) terminal, and waste treatment facility. This area can be used for the development of coal and oleo chemical gasification industry.

Indonesia is also offering the Industri Java Integrated Industrial Port Estate (JIIPE). The JIIPE Industrial Estate in Gresik, East Java, has a total area of 2,933 hectares (ha) and is supported with 23-MW and 500-MW power plants. Equipped with residential areas and ports, the zone is designed as an area for heavy industry and machinery.

Furthermore, it offers the Kendal industrial area in Central Java, with an area of 2,700 ha, and is located adjacent to the port of Semarang.

The furniture, food, and garment industries will be developed in this area."With competitive labor wages, this industrial area will have an advantage over other regions," Minister Hartarto pointed out.

He also offered the location of the Bontang industrial estate in East Kalimantan. According to Hartarto, this area will be developed for the coal gasification industry. Supported by an area of 265.6 ha, an oil and gas service industry is being built in the region. 

Indonesia wants Japans existing industry in the country to strengthen its supply chain, so that it will help meet the need for domestic raw materials. Hence, an increase in investment is expected.

The ountry is not only pursuing capital investment from large-scale manufacturing companies but it is also expecting that increased economic cooperation with Japan will target the development of technology and innovation, human resources, and small and medium industries in the country.

"We explained that Indonesia has an immense market and business potential today," Minister Hartarto remarked.

The Indonesian government is committed to creating a conducive investment climate and offering ease of business through deregulation and packages of published economic policies. 

"We are optimistic that the economy in Indonesia will improve this year, especially with the decline in the industrial gas prices and rising trend in commodity prices," he stated.

In the last six years, Japans total investment in Indonesia has reached US$19.7 billion. The number of Japanese companies in Indonesia to date has reached more than 1,750, with its business activities in manufacturing, infrastructure, and services sectors.

In 2016, the value of Japanese investment in Indonesia amounted to $5.4 billion, or an increase of 86 percent as compared to $2.9 billion in the previous year.

Some Japanese industries are quite active in investing in Indonesia, including in the automotive, metal, machinery, and electronics sectors.

In the meantime, during his visit to South Korea last week, Hartarto had sought to attract South Korean investors to expand their business to industrial areas outside Java, such as the Sei Mangkei Economic Zone in North Sumatra and the Morowali Industrial Park in Central Sulawesi.

"We are focusing on accelerating the development of industrial estates outside Java, as an effort to carry out equitable national economic development," Hartarto pointed out.

The development of industrial estates, especially outside Java, has a significant role in accelerating the ideals of the government to realize equitable development in Indonesia.

"The government has prepared several areas to become a new industrial center. For instance, the industrial areas of Kuala Tanjung and Sei Mangkei that can attract investment for the region of Sumatra," he explained.The industrial area of Morowali in Cen

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