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NESTLE DOUBLES PRODUCTION CAPACITY OF ITS MILK PROCESSING PLANT. PT Nestle Indonesia has doubled the production capacity of its milk processing plant in Kejayan, Pasuruan, and East Java from 600 tons per day to more than 1,000 tons per day. The company invested at least Rp900 billion for the capacity expansion. The factory produces high quality and nutrition milk. The new factory makes Nestle one of 10 largest milk processing companies in the world. The capacity expansion will also contribute to expanding the market of fresh milk from local dairy farms. Sales of fresh milk are forecast to rise to 1 million tons per day in the coming years from 620,000 tons at present. Arshad Chaudhry, the president of Nestle Indonesia said the new factory will open opportunities for all suppliers of fresh milk in East Java to increase supply to Nestle.

BUMI COMBINES NON-COAL SUBSIDIARIES. PT Bumi Resources Tbk (BUMI), the country's largest coal producer has combines its subsidiaries operating in business areas other than coal sector into a new company named PT Bumi Resources Mineral (BRM). The merger took place on 26 February 2009 between Lemingtons Investment Pte Ltd; Calipso Investment Pte Ltd; PT Citra Palu Minerals; and PT Multi Capital.  BUMI owns 99.99% of BRM. Lemingtons was  owned by Bumi Mauritania SA  and  Konblo Bumi Inc; Calipso Investment Pte Ltd  was 100% owned by Herald Resources Ltd,  and  PT Multi Capital  had a small share  in PT Newmont Nusa Tenggara. BUMI director Eddie J. Soebari said the consolidation was needed under internal restructure. BUMI increased the capital of BRM.

DUBAI DOCK YARD AND DAEWOO TO INVEST US$1 BILLION. Two world's giants in shipbuilding industry, Dubai Doc Yard (Dubai) and Daewoo Shipbuilding Marine Engineering of South Korea Selatan are expected to start building two new shipyards on Batam, in Riau Islands each with a capacity to build 500,000 DWT ships and investment of US$ 500 million. Daewoo will cooperate with state shipbuilding company PT Dok Koja Bahari (DKB) in a joint venture specially to build liquefied natural gas (LNG) tankers. Five other local companies also plan to build shipyards this year. Among them PT Arpeni Pratama Ocean Line Tbk plans to build a shipyard with an investment of  US$ 250 million in  Batam with a capacity to build ships  up to  300,000 DWT , PT Daya Radar Utama to build one with an investment of Rp250 billion (US$ 20 million)  in Lamongan, East Java . In the same area, PT Spiel, PT Lamongan Marine Industry, and PT Dok Pantai Lamongan also plan to build shipyards with an investment of Rp 300 billion each.

BAKRIE TELECOM AND ICON+ TO COOPERATE IN INTERCONNECTIONS. PT Bakrie Telecom Tbk and PT Indonesia Comnets Plus (Icon+) agreed to cooperate in establishing telecommunication interconnection in eastern Indonesia which would enable subscribers of the respective operators to make telecommunication connections. President of PT Indonesia Comnets Plus (Icon+) Muljo Adji AG said the cooperation will mark the start of interconnection cooperation between all operators in that region. Currently Icon+ is the organizer of tender for the Universal Service Obligation (USO) to expand telecommunication networks to rural areas in eastern part of Indonesia. Interconnection will involve networks of different telecommunication operators. Cooperation in interconnections between Bakrie Telecom and PT Indonesia Comnets Plus will cover the provinces of Gorontalo, North Sulawesi, Central Sulawesi, West Sulawesit, Southeast Sulawesi, South Sulawesi Selatan, North Maluku, Maluku, Papua and Irian Barat.

TELKOM TO REPLACE ALL COPPER CABLE NETWORKS WITH OPTIC FIBERS. The country's largest telecommunication company PT Telkom plans to replace all of its copper cable networks with ones made of optic fiber. Telkom has agreed to give the contract to state-owned telecommunication equipment producer PT Inti to modernize its cable networks. Under the agreement signed yesterday PT Inti will made replacement of 2.1 million secondary line units and 9 million primary line units. Currently Telkom has networks of 10 million primary line units and 13 million secondary line units, Rinaldi Firmansyah, the president of the state controlled telecommunications company, said. So far only 1.2 million line units in copper cables have been replaced with optic fiber, Rinaldi said. He said the entire project is to be carried out by phases and expected to be completed in four or five years, adding this year around 400,000 lines are to be replaced. He said the cost of the modernization plan is not "very high" as the copper cables could be resold.

CHANDRA ASRI MAY TEAM UP WITH ARAMCO TO PRODUCE NAPHTHA. PT Chandra Asri   will likely team up with Arabian American Oil Company (Aramco) to build a US$1 billion oil refinery to produce naphtha factory in the country. The Saudi company is the only one serious in guaranteeing crude oil supply to feed the naphtha factory planned by the country's largest petrochemical company, a company official said. There are a number of other companies indicating interest but all talks are still in the initial phase. Budi said imports have to be made for the crude oil needed by the plant as Indonesian crude oil production is not large enough to be set aside partly to feed naphtha plant.     Chandra Asri will need naphtha to guarantee supply of the feedstock for its ethylene and propylene production units. The company has an annual production capacity of 525,000 tons of ethylene and 240,000 tons of propylene.  Earlier it was reported that Chandra was studying plan to build a US$ 7 billion naphtha cracker to feed its petrochemical factory in Cilegon.     The project, which will need 300,000 barrels of crude oil per day, is expected to be completed in 2012.  So far Chandra Asri has imported up to 600,000 tons of naphtha every year to be processed into ethylene.

MONTHLY REPORT
INDONESIAN COMMERCIAL NEWSLETTER (ICN)
 
CORPORATE NEWS IN BRIEF
March 2010