Minister of industry affairs Airlangga Hartarto, who is also chairman of Golkar Party, revealed a plan from Compal Group, manufacturer of Apple products like iPad and iWatch, to build factories in Indonesia. Compal yet to make final investment decision (FID), but the government has offered tax holiday incentive.

Giant food processor Mayora Indah (MYOR) booked net profit of Rp807 billion in the first half ended June 30, 2019, an increase of 9.7% from the corresponding period last year. Forex loss of Rp103 billion contributed to the modest growth of net profit. At the current price, Mayora has market capitalization of Rp51 trillion (US$3.6 billion), equals to 5.4 x equity as at June 30, 2019.

Crown Prince of the Emirate of Abu Dhabi Sheikh Mohammed bin Zayed Al Nahyan, colloquially known by his initials as MBZ, will be in Jakarta this week. MBZ is scheduled to meet president Joko ‘Jokowi’ Widodo and witnessing the signing of at least two investments by Mubadala Investment Company and Abu Dhabi National Oil Company (ADNOC). Mubadala is set to sign US$2.5 billion petrochemical project with Chandra Asri (TPIA), the country’s largest petrochemical company.

Draft of a new regulation on battery electric vehicle, set to benefit domestic nickel miners, is now at the president Jokowi’s desk for signing. At the same time, the government reiterated its intention to stop export of nickel ores as scheduled in 2022.

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.

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.

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. 

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.

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.