Jokowi’s Food Policies (3): Sago
Kompas, the largest newspaper in the country, published an interesting headline in its today edition. It discusses lack of attention from the government to develop food diversity, focusing too much on rice as source of carbohydrate. The newspaper quoted experts about their concerns surrounding the growing bias toward rice and wheat as main sources of carbohydrate, neglecting tens of other sources available in the country.
Indonesia Changes Dynamics in Nickel and Aluminium
Indonesia has regained its position as the largest supplier of nickel ores to China in January 2018. Indonesia also maintained its position as the largest exporter of ferronickel to the country, responsible for 63% of the total import. Year-on-year, however, China’s import of ferronickel from Indonesia fell 34.71%.
Tax Weighs on Astra Agro
Like other plantation firms, Astra Agro Lestari (AALI) enjoyed strong revenue growth of 22.6% to Rp17.3 trillion last year, thanks to higher production volume following the end of El Nino impact. Astra Agro’s gross profit also improved 12.7% to Rp4.14 trillion, but the company’s net profit was flat at Rp2.01 trillion due to significantly higher income tax expenses.
Sipef: FY17 Results & Outlook
Belgium-based company Sipef booked net profit of US$139.7 million last year, surged from US$39.9 million in 2016, thanks to higher volume and average price of palm oil plus US$75.2 million of gain in the acquisition of PT Agro Muko. This is one of foreign companies with happy face from Indonesian operations.
Global Players in Extractive Industry
Indonesian extractive industry used to have global names in it. BP and BHP Billiton in coal, Newmont in gold-copper, and Rio Tinto in nickel. Bakrie Group took over BP and BHP’s thermal coal assets, while Adaro Energy took over BHP’s coking coal. Some groups acquired gold-copper-silver assets from Newmont. Medco/Panigoro for Newmont’s Batu Hijau, Martua Sitorus-Djarum for Martabe gold (indirectly), etc.
Jokowi’s Go East: Maluku Investments (2)
Maluku is a small province by population. It is a home to 1.7 million people only. The province, however, is set to become the richest because of its potentials in agriculture, fisheries, oil & gas, and metals. ASX-listed Finders Resources Ltd, by far, is the largest investment realized there. It operates copper cathode facility with combined capacity of 28,000 tons per annum in Wetar Island, souther part of the province, which is closer to East Nusa Tenggara province.
Energy World Corp & Future of Sengkang Energy Assets (2)
Shares of Energy World Corporation Ltd (EWC.AX) advanced 3.45% to A$0.3 Tuesday (Feb 13) on ASX to make a market capitalization of A$539 million. While operating gas-fired power plants in South Sulawesi with combined capacity of 315 MW, EWC is valued lower than AWE Ltd, which has just been acquired by Japan’s Mitsui Inc. It is only one-third of IDX-listed Cikarang Listrindo (POWR).
Short-Term Support for Coal
Thermal coal recovered closer to US$94 per ton Monday (Feb 12) to represent year-on-year gain of 17.1%. Other than tracking recovery of oil and gas, the commodity was supported by supply issues in China and weather in Indonesia. China Resources Power Holdings Co Ltd did report 51.9% jump in coal output last month, but two giants, China Shenhua and China Coal posted lower output.
PGN-Petronas Dispute
State owned oil and gas company Perusahaan Gas Negara (PGAS) has formally asked the Downstream Oil and Gas Regulatory Body (BPH Migas) to become mediator of a dispute regarding the gas transportation agreement (GTA). PGAS demands Petronas to pay US$32.2 million of compensation related to the under-utilized Kepodang-Tambak Lorok gas pipeline.
Coal: Bracing for More Corrections?
Thermal coal fell sharply by 11.25% to US$92.3 per ton Thursday (Feb 8), but the commodity still gained 15.74% year-on-year. Coal was the worst performing commodity that day, while WTI crude and Brent crude slided further to US$60.4 and US$64.1 per barrel respectively. This was also the deepest correction after nearly three months of rally, which lifting the commodity from US$90 to nearly US$110 per ton.