Waiting Krakatau Steel to Report Profit (2)
Four years ago, December 2013, then President Susilo Bambang Yudhoyono inaugurated commercial operation of steel mill Phase I of PT Krakatau Posco, a joint venture between KRAS and South Korean giant Posco. Expectations were high that the JV will contribute significantly to KRAS. The success was expected to follow with construction of Phase II to make a total investment of US$5-6 billion.
Waiting Krakatau Steel to Report Profit (1)
Krakatau Steel (KRAS) is probably one of few market leaders consistently reporting net loss in decades. Some investors have long given up hopes in the state-owned steel producer. In the first nine months of 2017, KRAS booked net loss of US$75 million. Whilst 35% lower than the corresponding period last year, KRAS needs to work hard to regain confidence among market participants.
Taxation for Cross Border E-Commerce
The government plans to clarify import tax policies for goods imported under the cross border e-commerce model, which is now dominated by Chinese products. Details of the plan, however, yet to be disclosed, including delivery points (custom clearance) and applicable tax rates.
Improved Connectivity Outlook
PT Railink, subsidiary of railway operator PT Kereta Api Indonesia, has successfully launched train services connecting Jakarta city center and Soekarno-Hatta international aiport yesterday. President Joko ‘Jokowi’ Widodo is scheduled to inaugurate commercial operation of the modern mass transportation next week.
Speculating in Lotte Chemical’s Next Move
Lotte Advanced Materials Co, the chemical arm of South Korean retail giant Lotte Group, has signed a deal to acquire PT Arbe Styrindo and PT ABS Industri Indonesia, two plastic resin producers, for undisclosed consideration. Following the acquisition, Lotte plans to invest in upgrading production facilities of the new subsidiaries.
Arla Foods & Indofood Venture
Arla Foods, one of the world’s largest players in dairy business, has decided to enter into a joint venture with Indofood CBP Sukses Makmur (ICBP), the largest food & beverage company in Indonesia. Arla and Indofood will have almost equal share in the joint venture, which will handle sales, distribution, and production of dairy products.
Strong November Construction Machinery Sales
United Tractors (UNTR) sold 409 units of construction machinery last month, the highest monthly sales in years. It surged 109% from November 2016 and 30% above October 2017. Mining and construction, including infrastructure, contributed to the strong performance.
Improved Connectivity Outlook
After two years of construction, physical progress of Bakauheni-Terbanggi Besar, the longest toll road (140 KM) in Sumatra Island, moved closer to completion. As of December 15, 2017, physical construction progress already reached 61%, while some sections are scheduled to start trial operation in the coming weeks.
Q&A with Panorama Sentrawisata
Panorama Sentrawisata (PANR) is one of the largest tour and travel companies in the country. In the first nine months of 2017, Panorama generated sales revenue of Rp3.81 trillion, an increase of 10.4% from the corresponding period last year. Interestingly, revenues from airplane tickets and hotel vouchers grew 14% and 21.4% respectively in the period, amidst pressures from online players.
Another Strong Month for Cement, Oversupply Remains The Biggest Enemy
Domestic cement sales for November 2017 reached 6.4 million tons, an increase of 11.4% year-on-year, thanks to strong demand from property and infrastructure projects. Cement industry, however, needs double digit growth per annum in the coming years to wipe out the current oversupply.