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PERTAMINA TO SELL 66.67% OF PATRA JASA. State oil and gas producer PT Pertamina has said it would divest the majority stake it has in its property subsidiary, PT Patra Jasa, as it wants to focus more on its core business. Pertamina spokesman Mochammad Harun  said   the company would sell two thirds  or 66.67% of its Patra Jasa stakes worth more than Rp 2.37 trillion (US$ 266 million). Pertamina owns 99.98% of Patra Jasa shares, with the rest held by Pertamina's subsidiary company PT Patra Niaga. This is a private placement mechanism for strategic investors. Pertamina offers the stakes for Rp 2.377 trillion as the based price," Harun was quoted as saying. Patra Jasa has hotels, office buildings, and residential property, mostly located in various strategic locations in Indonesia. "We expect the new investor to expand the company, as we don't have any experience in managing properties," he added. Earlier Andi Saddawero, the director of PT Perusahaan Pengelola Aset (PPA), a state-owned asset management firm, said Pertamina wanted to restructure its non core business to be able to focus more on oil and gas operations. PPA will help in facilitating the asset sales, Andi said Pertamina will sell its 66.7% stake in Patrajasa that includes hotels in Bali, Cirebon, Semarang, Jakarta and Bandung, an office building in Jakarta, and a housing complex in Kuningan, Jakarta, and 132 parcels of land.  Pertamina, however, decided to maintain its share in the Pondok Cabe airport and golf course in Tangerang, which are offered for lease.


TRUBA LOOKING FOR STRATEGIC INVESTORS TO BUILD THREE POWER PLANTS. PT Truba Alam Manunggal Engineering Tbk is looking for strategic partner to help finance the construction of three coal-fired power plants (PLTU) with the status of independent power producer (IPP). Corporate Secretary of Truba Alam Engineering Gamala Virasa Katopo said the company is preparing the construction of PLTU Lampung with a capacity of 60 megawatts (MW), PLTU Pontianak in West Kalimantan with a capacity of 60 MW and PLTU Kuala Tanjung in North Sumatra with a capacity of 270 MW. Gamala said construction of the PLTU unit in Lampung was to begin in 2010 to be followed with the other two in the first half of 2011. Construction will take around two years for each of the projects. The power to be generated the unit in Lampung will be sold directly to industries in that region and the power from the two other plants will be sold to state electricity company PLN.


LG PLANS TO BUILD NEW FACTORY. PT LG Electronics Indonesia (LGEIN) will build a new factory in 2011 to cost hundreds of millions of US dollar. The new factory is expected to increase its position in competition on the domestic market and to meet growing demand for exports. Head of the investment board (BKPM) Gita Wirjawan said the Indonesian unit of South Korea's LG Electronics has submitted proposal for the project. Currently LGEIN is carrying out feasibility study and looking for place where the factory is to be built. Gita said LGEIN is set to expand its television set market to increase its market share in the country.

MATAHARI SETS ASIDE $3.4 B FOR MORE OUTLETS. Publicly traded retailer PT Matahari Putra Prima Tbk (MPP) plans to invest Rp30 trillion in 10 to 15 new outlets of its hypermarket division called Hypermart. MPP director Danny Kojongian said the company is set to become number one retailer in Indonesia by opening up to 15 units of Hypermart outlets a year. Danny said MPP could focus more on expansion of its hypermarket business after selling its Department Store division to CVC in April 2010.  In 2010 MPP opened 8 hypermarket outlets. In 2011, it plans to open 13 more units and three units of Foodmart selling especially foodstuff. Some 11 units of the new Hypermart outlet will be in Java, one in Sumatra and another one in Ambon. The Foodmart outlets will be opened in Jakarta and Bali. In the next 1 to two years, expansion will be concentrated more outside Java in the western part of the country. Expansion to the eastern part of the country will start in the next three to five years.

ASTRA OTOPARTS TO BUILD PLASTIC AUTOMOTIVE COMPONENT FACTORY. PT Astra Otoparts Tbk (AOP), producer of automotive components is building two new factories to produce plastic automotive components and dry batteries. The projects will cost around Rp800 billion, AOP director Widodo Eko Rijanto said. Widodo said the factories are planned to meet growing demand especially for automotive components on the domestic market. Demand is growing both from motorcycle factories that will use them as original equipment and from open market selling them as replacement. AOP will produce dry batteries for cars and motorcycles. The subsidiary of the Astra Group, the country's largest automotive company, also reported a 25.7% increase year-on-year in sales to Rp 3.046 trillion in the first half of 2010.

BCA FINANCE POSTS 30% INCREASE IN FINANCING. Financing firm PT BCA Finance reported Rp 11.2 trillion in new financing credits in the first nine months of this year up 30% from the same period last year. Most or Rp7.8 trillion of the credits were to finance the purchases of new cars and the rest for the purchases of second hand cars. President of BCA Finance Roni Haslim said the new credits disbursed in the first nine months of this year already exceeded credits of Rp 11 trillion recorded in the whole of 2009. Roni said his company is fully supported by its parent company Bank Central Asia (BCA), the largest private bank in the country. Early 2010, BCA Finance received financial support of Rp 10 trillion from BCA to help finance its credits. BCA Finance set financing credit target at Rp 13.5 trillion for 2010. BCA Finance was established with the name of PT Central Sari Metropolitan Leasing Corporation in 1981 by BCA, The Long Term Credit Bank of Japan, and Japan Leasing Corporation. In 2001, BCA took control of 99.58% of the financing firm.

DAIHATSU INVESTS MORE FOR EXPANSION. Car maker PT Astra Daihatsu Motor (ADM) said it would   spend Rp 150 billion (US$ 16.7 million) in additional investment to expand its production capacity to 330,000 units from 286,000 units.  The capacity expansion is to meet market demand in the first quarter of 2011, ADM vice president Sudirman MR said. In the middle of 2010, ADM invested Rp 362 billion to expand its capacity from 211,000 units to 286,000 units at present. The expanded capacity would not be enough to meet the market demand, Sudirman said, adding further expansion, therefore, is needed. The subsidiary of the Astra Group, the country's largest automotive company, assembles both Daihatsu and part of Toyota cars. It is the largest car maker in the country. Currently, Daihatsu has two production lines with products including Daihatsu  Xenia, Terios, Luxio dan Gran Max,  and Toyota  Avanza 1.3 L and 1.5 L  and  Rush 1.5 L. ADM  has succeeded in expanding exports to new  markets such as Singapore, Nepal, Columbia  and Costa Rica.

BAKRIE POWER TAKES OVER PLTU TANJUNG JATI A. PT Bakrie Power has taken over development of the coal-fired power plant PLTU Tanjung Jati A, in Cirebon. Bakrie Power took over the 1,200 MW power project after the withdrawal of Tomen Power Corporation from Japan and International Power Plc from Britain. PT Bakrie Power president Ali Herman Ibrahim said originally the project was to be built by a consortium called Tanjung Jati Power Company that grouped Bakrie Power Tomen Power Corporation and International Power Plc and PT Maharani Paramitra. The two foreign partners withdrew after the consortium as an independent power producer (IPP) failed to strike price agreement with the state electricity company PLN which is to buy the power output. PT Maharani Paramitra, which is owned by Siti Hediati, a daughter of former president Suharto, and Bakrie Power each, had a share of 20% with Tomen and International each having a 30% stake. Construction of the power plant has been delayed for a year over difficulty in land procurement. Tanjung Jati A  was originally to be built in Jepara, Central Java, but at last it was moved to Cirebon,  where land is already available.

BUMITAMA ACQUIRES OIL PALM PLANTATION IN KALIMANTAN. PT Bumitama Gunajaya Agro (BGA)  has expanded its lands for oil palm plantations by 40,000 hectares after acquiring oil palm plantation companies in East Kalimantan  and West Kalimantan. BGA president Lim Gunawan Haryanto  said 30,000 hectares of the have  lands have not been cultivated. BGA has secured a syndicated loan of US$ 135 million from five banks - DBS Indonesia, The Hong Kong and Shanghai Banking Corporation Limited (HSBC), Bank Permata, Bank Ekonomi Rahardja Tbk, and Rabo Bank International Indonesia (RII). BGA  is a business unit  of the Harita Group , operating in oil palm plantation and palm oil factories. The acquisition of the new lands  increased the oil palm plantations of BGA to 104,000 hectares in Central Kalimantan, East Kalimantan Timur,  and  Riau. BGA plans to expand the plantation to 200,000 hectares by 2015.


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