Nickel Industry Update
State-owned mining company Aneka Tambang (ANTM) has finally appointed Kawasaki Heavy Industries and Wijaya Karya (WIKA) as contractors for the development of ferronickel (FeNi) smelter in Halmahera Island, North Maluku province. The Rp3.42 trillion worth of contract covers the development of phase I line I of the multibillion dollar project.
Stronger Automotive Sales
Like cement, August was also a great month for automotive industry. According to Indonesian Automotive Association (Gaikindo), car sales in the month reached 96,294 units, an increase of 6.3% from the corresponding month last year, lifting sales in the first eight months of 2016 by 2.88%.
Toll Road Projects Update (2): Trans-Java
Cement consumption in Java grew only 1.3% in the first eight months of 2016, but Central Java and East Java reported strong growth of 11.6% and 6.3% respectively. This might be related to faster development of toll roads in Central and East Java plus other infrastructure projects, including power plants and industrial estates.
Toll Road Projects Update (1): Trans-Sumatra
Waskita Karya (WSKT), the state EPC firm, has provided Rp3.09 trillion loan facilities to subsidiary PT Waskita Toll Road (WTR) to bridge-finance land acquisition of its toll road projects. Fellow state EPC firm Hutama Karya, which is tasked to develop the trans-Sumatra toll road, meanwhile, boosted allocation of bridge financing for land acquisitions in the island.
Stronger Cement Sales
Cement sales in domestic market grew 8.7% year-on-year to 5.97 million tons last month. This is the highest monthly sales volume this year, thanks to higher demand from infrastructure projects.
Siloam Hospital vs Mitra Keluarga
Siloam Hospital (SILO), controlled by Lippo Group, booked net profit of Rp69 billion in the first half of 2016, jumped by 44.4% from the corresponding period of 2015, but it was only less than one-fifth of Mitra Keluarga (MIKA), which posted net profit of Rp372 billion in the same period.
Those Continue to Expand
Companies involved in the development of public infrastructure and public housing continue to expand. State-owned secondary mortgage company PT Sarana Multigriya Finansial (SMF) had distributed Rp4.19 trillion of loans to mortgage lenders in the first half of 2016, surpassing its full year target of Rp4 trillion.
New Gas Price Policy (2)
The Government of Indonesia plans to cut gas prices for industry by 37% to maximum US$6 per mmbtu (million metric British thermal units), from current US$9-10 per mmbtu, with the aim of boosting industrialization in the country. President Joko ‘Jokowi’ Widodo has in May 2016 signed Regulation No. 40/2016 about natural gas, which benefits at least seven industries, namely fertiliser, petrochemicals, oleochemicals, iron and steel, ceramics, glass, and rubber processing.
Yangtze Optical + Jembo Cable
PY Yangtze Optical Fiber Indonesia (YOFI), subsidiary of HKSE-listed cable manufacturer Yangtze Optical Fibre and Cable Joint Stock Limited Company, has started commercial operation of its first fibre optic cable manufacturing facility in Karawang, West Java. The Company has already launched an expansion to double its existing facility.
Revisiting Bakrieland & Debt Settlement
The troubled PT Bakrieland Development (ELTY) Tbk has just released its full year 2015 financial results. The Company posted net loss of Rp726 billion against profit of Rp472 billion in 2014 due to squeezed margins and higher financial charges. IPO of its subsidiary, PT Graha Andrasentra Propertindo (JGLE) Tbk, developer of Jungleland in Sentul, Bogor, might help reducing mounts of debts.