Category: Industries

An energized investment climate

The past 12 months has been fascinating as the government cleared up pending issues for major projects in the country. Divestment of shares and extension of contracts paved the way for Freeport’s US$10 billion projects in Grasberg, Papua (underground mining) and Gresik, East Java (copper smelter). Yesterday, President Joko Widodo witnessed the delivery of approval for revised plan of development for US$20 billion Masela project to Inpex CEO. This also paves the way for US$2 billion petrochemical project onshore of Maluku province.

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Manufacturing Industry Update

First half of 2019 was not convincing for cement, automotive, and textile & garment. Domestic cement sales, for example, declined 1.91% to 28.79 million tons. Sales of cars, meanwhile, declined by 15% in the period. They need a significantly stronger second half to save the year.

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A More focused approach in tourism

President Joko ‘Jokowi’ Widodo has on Monday (Jul 15) led a limited cabinet meeting with governors of five provinces to sharpen the goverment’s focus in development of prospective tourism destination. The central government has also decided to give five destinations—-Toba Lake, Borobudur, Mandalika, Labuan Bajo, and Manado—-a priority in the development of supporting infrastructure.

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Walk the Talk: Hydrocarbon Value Chain in Teluk Bintuni

The clock is ticking to commercial operation of Train 3 of Tangguh LNG project in Teluk Bintuni, West Papua province. The train has design capacity of 3.8 million tons of LNG Per annum, lifting Teluk Bintuni’s LNG capacity to 11.4 million tons per annum. Portion of the gas is slated for petrochemical plants, which, unfortunately, yet to start physical construction. 

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The Future of Labuan Bajo

President Joko ‘Jokowi’ Widodo spent two days in Labuan Bajo, a fast growing tourist destination in Flores Island, East Nusa Tenggara last week. The president has decided to prioritise development of Labuan Bajo, Mandalika (West Nusa Tenggara), Toba Lake (North Sulawesi), and Borobudur Temple (Central Java) within the 10 emerging destinations set earlier.

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Jokowi’s Second Term (4): Investment

The clock is ticking…more new power plants will be operational in Java Island, which will add headaches to the already significant overcapacity. The Jawa-7 coal-fired power plant (2×1,000 MW) is moving closer to commercial operation, starting with first unit in October and the second in April 2020. Next year, Bhimasena Power, a JV between Adaro, J-Power, and Itochu Corp will add 2,000 MW in Central Java.

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Jokowi’s Second Term (3): Road Infrastructure

President Joko ‘Jokowi’ Widodo is visiting North Sulawesi province to inspect progress of major infrastructure projects in the fast growing tourism area, including the Manado-Bitung (39 KM) toll road. Jokowi has reaffirmed his commitment to continue developing the country’s infrastructure in his second term in office (2019-2024). 

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Jokowi’s Second Term (2): Waste Management Infrastructure

Ministry of public works and housing will soon open public tender for the long-delayed Jakarta Sewerage System after securing Rp4.03 trillion of 25-year loan from Japan. This is one of big infrastructure projects in the country. The project will be started with Zone 1 and Zone 6, which require total investment of Rp16.8 trillion or around US$1.2 billion.

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Jokowi’s Second Term: Public Housing (1)

Over the weekend, we attended activities of Habitat for Humanities in East Java. The organization, with support from Saratoga Group owner Edwin Soeryadjaya, arranged the so-called CEO Build, wherein CEO of some major companies participated in physical construction of homes for low income group in Gresik regency. HSBC CEO Sumit Dutta was among the CEOs.

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Mineral Processing Continues to Attract Investments

Indonesia’s mineral processing industry continues to attract investments. Four major projects are now looking for financing from banks, bonds, and equity market. They include Freeport Indonesia’s copper smelter project in Gresik, East Java and Amman Mineral Nusa Tenggara’s copper smelting project in Sumbawa Island, East Nusa Tenggara. 

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Improved Infrastructure Outlook

Electricity is no longer an issue; road infrastructure improved significantly; water supply also increased substantially. More reliable basic infrastructure should be strong foundation to boost investments going forward. Determination, however, is needed in overhauling legal and bureucracy system. 

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More Promising Investment Stories

Minister of industry Airlangga Hartarto has on Thursday (Jun 20) kicked off development of the Karawang New Industrial City (KNIC) in Karawang, West Java province with estimated investment of US$300 million. At the same time, six companies started construction of their respective factory for food processing, pharmaceutical, packaging, and precision tools with combined investment of US$100 million. 

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