Those Continue to Expand
Footwear giant Shoe Town Group (China) is scheduled to inaugurate its new factory in Indonesia under PT Shoetown Ligung Indonesia (SLI) this month. Built with US$42 million of investment, the new factory in Majalengka, West Java, absorbs 3,500 workers. The whole plan is to invest US$200 million and create jobs for 20,000 people in the area.
Nickel-to-Stainless Steel in Indonesia (2)
To be fair, mineral processing might be the most significant in attracting new investments in the past five years or so. In Morowali, Central Sulawesi province alone, over US$3 billion worth of projects have been developed. We have reported individual projects in nickel, bauxite, iron ore, and manganese in the past few years. Hopes are high that China’s NFC will also soon develop lead/zinc smelter after taking over majority shares of PT Dairi Prima Mineral from Bakrie Group.
Nickel-to-Stainless Steel in Indonesia (1)
Commentator Rizal Ramli, who is considered an economist by some, suggested scrapping of import of cars from Japan and steel from China to address the trade deficit, which hurting rupiah. While Indonesia remains deficit in iron and steel, the country has actually a net exporter of automotive products, thanks to massive investments by Japanese automakers.
Corporate Actions
Toll road operator Citra Marga Nusaphala (CMNP) mulls launching a rights issue in 2019, targeting to raise Rp30 trillion for funding its toll road projects. CMNP will hold an extraordinary general meeting (EGM) of shareholders in early December this year for seeking the approval on the said proposed rights issue program.
Revisiting Coal Transporters
Baltic Dry Index (BDI), the gauge for international transportation of dry bulk materials including coal, fluctuated this year, but rose 19.24% year to date reaching 1,574 on Wednesday (Oct. 3). Coal prices also rose 17.18% this year. But coal transporters in Indonesia reported mixed financial performance this year.
Banking Update
Bank Tabungan Pensiunan Nasional (BTPN) and Bank Sumitomo Mitsui Indonesia (SMBCI) will hold the extraordinary general meeting (EGM) of shareholders on October 5, 2018 to seek approval on proposed merger, which is supposed to be effective by January 1, 2019.
Time to Get Serious in Addressing Feedstock for Organic Chemicals/Plastics
One of the reasons why Indonesia’s trade balance suffered everytime crude oil hikes is pathetically slow development of domestic feedstock for petrochemicals, organic chemicals, and plastics. Higher crude oil means bigger trade deficit in refined products, including by-products like naphtha, which are main feedstock for petrochemical companies.
INALUM’s Target
PT INALUM has set a high target of export sales from minerals, coal, and downstream products. The President Director of INALUM Budi Gunadi Sadikin told the press (Oct. 2) that the Company’s export sales target for this year is US$ 2.51 billion or Rp 37.56 trillion (exchange rate of Rp 15,000). It’s an increase of 33% compared to the export sales realization of 2017 at US$ 1.89 billion. That figure comes from the subsidiaries of INALUM, i.e., PT Bukit Asam for coal, PT Timah for tin, PT Aneka Tambang (ANTAM) for bauxite and nickel.
Revisiting Nipress
Battery producer PT Nipress Tbk (NIPS) and Johnson Controls Battery Investment LLC (JCBI) have on September 28, 2018 signed a sale and purchase agreement (SPA) for the divestment of 24,883 shares in PT Nipress Energi Otomotif (NEO), or 24.5% of its total issued and paid-up share capital at the price of Rp138.62 billion. NEO is also set to issue 14,856 new shares to be absorbed by JCBI at the price of Rp77.24 billion.
Those Continue to Expand
So, Rukun Raharja (RAJA) has completed acquisition of 100% shares of PT DSME ENR Cepu from Daewoo Shipping Marine and Engineering (DSME), South Korea. That means RAJA, which is linked to the family of the largest political party’s leader, will have indirect ownership in Cepu Block, currently the largest oil producing block in Indonesia. Also in this report: Wilmar-Vishakha, KKR-Lemang Block, and K-Water-Adhi Karya.