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BJB PROVIDES RP 500 BILLION IN CREDIT FOR TOLL ROAD PROJECT. PT Bank Jabar Banten Tbk has offered Rp 500 billion in credits for the construction of toll road between Bandung and Cirebon. BJB, which is owned by the West Java and Banten provincial administrations, will finance the project jointly with a number of state banks.  Meanwhile, BJB plans to launch rights issue to raise fund to increase its financing capacity and business expansion until 2013. BJB president  Agus Ruswendi  said the bank needs to raise more external  funds  in 2013  as the fund available are enough  only to cover corporate program until  2012. BJB still holds fresh funds around Rp 2.28 trillion  including Rp 280 billion remaining from a recent IPO fund  and Rp 2 trillion  from the recent sales of bonds. The IPO fund will be used to build new offices and modernize technology. . BJB allocates around 15% of its credit expansion this year of Rp 7 trillion-Rp 8 trillion for the corporation sector including credits for infrastructure, financing and financial service. BJB will increase credits for productive sector from 30% at present to 35% by the end of 2011. According to plan BJB will build nine new branch offices in Makassar, Denpasar, Balikpapan, Pekanbaru, Palembang, and Lampung and in Java such as Solo and West Jakarta.

SAMPOERNA WRAPS UP ACQUISITION OF BANK DIPO. The Sampoerna group has secured an approval from Bank Indonesia to acquire PT Bank Dipo Internasional after waiting for three years. In 2008, Sampoerna proposed the take over of the majority stake in Bank Dipo and concluded due diligence study. However, toward the end of that year, the acquisition plan was postponed because of the global financial crisis. Early 2009, Sampoerna renewed  plan to acquire the bank  through Orient Distributor Network Pte Ltd, which is based in Singapore headed by Michael J. Sampoerna, a son of Putera Sampoerna. Early 2010, the Sampoerna Group reached an agreement with the shareholders of Bank Dipo. Under the agreement the Sampoerna Group would acquire 85% of the bank the business agreement then was reported to the central bank. At that time Bank Dipo was 42% owned by PT Pahalamas Sejahtera, 48% by Suharni Poniman (48%) and 10% by Suhada Poniman. Based on its financial report in September 2010 Bank Dipo had assets valued at Rp 525.5 billion with credits at Rp 525.5 billion and third party funds at Rp 588.6 billion. Its net profit was Rp 13.04 billion. Sampoerna wants Bank Dipo to deal mainly with micro businesses in its banking operation. It will be merged with Koperasi Sahabat, another subsidiary operating in small business financing business.

MEDCO TO STUDY BUSINESS IN OPERATION OF GAS FUEL FILLING STATIONS THIS YEAR. PT Medco E&P Indonesia is studying new business to operate gas fuel filling stations (SPBG) this year by allocating 10% or 18 MMscfd of its gas production for the new business. President of Medco E&P Indonesia Budi Basuki said feasibility study will be carried out this year and the first stations would be built in Jakarta. Oil production of Medco E&P Indonesia totals 29,414 bopd and its gas production reached 160.74 MMscfd. around 45 MMscfd of its gas production has been supplied to fertilizer industry, 60 MMscfd for power plants in South Sumatra and 40 MMscfd supplied to gas distributor PT Perusahaan Gas Negara (PGN). In the future 10% of the gas production will be supplied to gas filling stations. The use of gas fuel for cars will reduce dependence on oil imports. The use of CNG could save around Rp 63 trillion in oil fuel in the country or Rp19 trillion a year in the Jagotabek area.

PERUM PEGADAIAN SEEKS ADDITIONAL CAPITAL OF RP 5 TRILLION. The state owned pawn shop operator need additional fund of Rp 5 trillion to reach its financing expansion target of Rp 84.77 trillion by the end of this year. The target is 33.05% higher than Rp 63.71 trillion in outstanding credits recorded by the company in 2010. Pegadaian finance director Budiyanto said the Rp 5 trillion funds is expected to be raised in loan from banks, from the sales of bonds and medium term notes (MTN) this year. The plan to raise the fund has been included in the Corporate Working Plan (RKP). Loan funds from four largest banks in the country - PT Bank Mandiri Tbk, PT Bank Rakyat Indonesia Tbk, PT Bank Central Asia Tbk and PT Bank Negara Indonesia Tbk. are expected to contribute Rp 2 trillion to the fund needed by Perum Pegadaian Each of the four banks has agreed to contribute Rp 500 billion to be repaid in 1 year with interest rates from 8.5% to 10.5%. A fund to be raised from bonds is expected to reach Rp 2 trillion and fund from MTN Rp 1 trillion.

ASTRA GROUP HAS A 57% SHARE OF CAR MARKET. Sales of low MPV cars are expected to remain high as production has been normal with support in components supplied by non Japanese sources including locally produced components. Data from the Association of Motor Vehicle Industries showed that sales of low MPV cars reached 70,202 units in the first quarter of 2011 or contributing 58.03% to the total ales of non sedan cars of 120,981 units. Association secretary Juwono Andrianto said production of low MPV cars is less affected by shortage component supplies from abroad especially from Japan as a result of the March's tsunami, as almost 70% of their components have been locally supplied and the rest are available from non Japanese sources such as Thailand, Malaysia and the Philippines. Production of Korean cars is also almost unaffected. Sales of low MPV cars have remain high and grew sharply from year to year. Improved condition of the country's economy, low inflation and improve purchasing power of the consumers, low interest rate will contribute to increase in the same of low MPV cars.  Marketing director of PT Astra Daihatsu Motorcycles Amelia Tjandra said sales of Xenia reached 16,318 units and demand for the low MPV cars has remained strong. Problem in the process of production has been relatively little. Therefore, sales of low MPV cars are expected to remain to be on the increase despite a decline of 2,000 units in the total stocks of cars in April to 8,000 units from normally 10,000 units as there was no overtime in production. Meanwhile, the Astra Group maintains lead with sales of 125,422 units or a market share of almost 57% in the first quarter of 2011. Sales of cars in the country in the first three months of the year reached 225,413 units.

BW PLANTATION TO INVEST RP 522 BILLION. PT BW Plantation Tbk will build 10 - 11 new palm oil processing factories until 2016 with an estimated cost of US$ 60 million or around Rp 522 billion.  BW Plantation director Abdul Halim Ashari said the new factories are needed to expand the company's processing capacity of 105 tons of fresh fruit bunches per hour at present. With plantation totaling 94,669 hectares, the company should have factories with a total processing capacity of around 450-500 tons per hour. The fund needed for the building he new factories will be a combination of the remaining fund  from bond issue last year and the company's internal fund  and a bank loan. In addition, company's finance director Imam Faturachman said the company is in the process of acquiring 50,000 hectares to 100,000 hectares of lands in East Kalimantan.

SBI ACQUIRES 25% OF BNI SECURITIES. PT Bank Negara Indonesia Tbk has sold a 25% stake it has in PT BNI Securities to SBI Securities Co Ltd, a Japanese securities company as part of its business expansion plan.  Under an agreement SBI Securities will inject Rp 114 billion into BNI Securities. The capital injection will be made in a rights issue to be launched by BNI Securities. BNI president Gatot M. Suwondo said SBI Securities has been favored to buy the stake for it's on line technology that would be useful to develop retail business. BNI Securities will be developed in the future with focus on retail investors. SBI Securities is a subsidiary of SBI Holding Co Ltd, which is an online share trading company in Japan   having service facility with high technology.

NALCO TO BUILD ALUMINUM FACTORY IN EAST KALIMANTAN. National Aluminium Company Ltd (Nalco) finally decided that Kutai Timur in East Kalimantan would be the location for its project of aluminum smelter. The project that will include a power generating plant will cost around US$ 4 billion. The aluminum producer owned by the Indian government, earlier planned to build the project in the regency of Banyuasin, South Sumatra. Nalco already signed a memorandum of understanding with the South Sumatra regional administration in 2008. However, difficulty in securing coal for fuel, Nalco decided to move the location of Kutai Timur. Nalco also raised the investment value from US$3.38 billion to US$ 4.067 billion. The Capital Investment Coordinating Board (BKPM) approved the change in location and investment value on December 31, 2009. Nalco already established a local subsidiary PT Nalco International to handle the project. The smelter project is estimated to cost US$ 2.24 billion and the power plant US$ 1.83 billion. Originally the cost estimates were US$ 1.83 billion for the smelter and US$ 1.52 billion for the power plant.


MONTHLY REPORT
INDONESIAN COMMERCIAL NEWSLETTER (ICN)
 
CORPORATE NEWS IN BRIEF
April 2011
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