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INDONESIA TO BECOME PRODUCTION BASE FOR TOSHIBA LCD. Electronic principal from Japan Toshiba Corp.  Has decided to make Indonesia production base for its liquid crystal display (LCD) for the Asia and Oceania region. Production in Indonesia is considered more competitive. Meanwhile, Toshiba LCD factory in Vietnam has been closed. Toshiba Electric Ltd, through its subsidiary PT Toshiba Consumer Product Indonesia (TCPI) will increase its LCD television production to 600,000 units per year. Toshiba Corp. has also decided to move its DVD factory operation from Vietnam to Indonesia for the same reason.  Its  factory in Vietnam will be closed, meanwhile, its factory in Indonesia already started operation,  Conny Kurniawan, an executive of PT Toshiba Consumer Products Indonesia (TCPI), said. The factory will have an annual production capacity of 4,000 units this year to be increased to 10,000 units later, Conny said. TCPI could produce   DVD at lower cost with high local content of 40%, she said.

ADIRA SEEKING ADDITIONAL FUND OF RP 5 TRILLION. Publicly traded financing firm PT Adira Dinamika Multifinance said it is seeking additional fund of Rp 5 trillion to strengthen its financing capacity. Adira is studying options including joint financing scheme with banks and issuing bonds to raise fund to meet its financing target of Rp 17.5 trillion this year, a company official said. Finance Director Hafid Hadeli said Bank Danamon, which controls Adira, will provide 85% of the fund needed by the company, which offers credits for the purchases of motor vehicles. Hafid said three other banks have also pledged a loan of Rp 225 billion. Hafid said diversification of sources of fund is necessary to better support cash flow and transfer of business risks. Adira Finance will concentrate more on business in leasing of heavy equipment outside Java and Bali this year.

PANASONIC TO MOVE ENERGY SAVING LAMP FACTORY TO SURABAYA. Japanese electronic producer Panasonic Corp. plans to move its energy saving lamp factory from Osaka to Surabaya this year.  Operation of the factory in Japan is no longer competitive because of high labor cost, Panasonic's Indonesian unit PT Panasonic Gobel Indonesia said. The relocation of the factory to Surabaya is estimated to cost US$ 30 million, Ichiro Suganuma, the president of Panasonic Gobel said. Surabaya will be the production base for Panasonic's energy saving lamp products for the global market, Ichiro said. He said Panasonic plans to move a number of its factories from Japan to Indonesia for the same reason to be more competitive in international market. John Manoppo, the general chairman of the association of electric lamp producers, said labor cost is much lower in Indonesia making operation in Indonesia more efficient. Based on data from the association, Panasonic already has a factory producing energy saving lamp in Pasuruan, East Java starting operation in 2002. That year Panasonic Corp through PT Panasonic Gobel Indonesia established a subsidiary PT Panasonic Lighting Indonesia with an investment of US$ 60 million. The subsidiary has a factory with a production capacity of 50 million units of energy saving lamps per year. Around 95% of its production is exported to Japan. 

CAR SALES CLIMB FROM ONE RECORD HIGH TO NEW PEAK. A leapfrogging increase has been recorded in car sales in  Indonesia  in the past several months  from one record to a new peak, industrialists said. Monthly sales peaked  in February  when sales reached 55,620 units or the highest over the past year after January's record of 52,831 units , Joko Trianyoto, the marketing director of PT Toyota Astra Motor said The sales in February was 60%  higher than in the same period last year, Joko said. The surges in January and February were  attributable  to improvement in the country's macro economic condition, he  said.   He predicted the trend would continue through March but  the market is expected to be quieter in April. Meanwhile, the association of motor vehicle industries  said  the  country's car production  is predicted to  shoot up 51% to more than 700,000 units this year from 464,000 last year. Production  will be boosted by strong sales  on the domestic and export markets, association chairman Sudirman MR said.  Around 600,000 units of the production will be disposed of on the domestic market and the rest for exports, association chairman Sudirman MR said. In the first two moths of this year car sales surged  58% to 108,487 units from 68,633 units in the same period last year, Sudirman said. Commercial cars  continues to dominate production and sales

BUSINESS IN TELECOMMUNICATIONS TOWERS CLOSED TO FOREIGN INVESTMENT.  A presidential decree is expected to be issued barring foreign investment from entering the business in telecommunications towers. The decision followed rejection  by the Commission I of the House of Representatives of plan  to allow foreign investors to have a stake in companies operating telecommunication towers. Gita Wirjawan. The head of the capital investment coordinating board (BKPM), said he wanted foreign investors to be allowed to  invest in that business area. The business area  could attract  large investment  valued up to Rp8 trillion  a year , Gita argued. However, chief economics minister Hatta Rajasa said it was almost certain the business area is closed to foreign investment especially as the Communications  and Informatics Minister Tifatul Sembiring was also against opening the sector to foreign investment. The Communications and Informatics Minister already banned foreign investment in the telecommunication tower business. Through a ministerial regulation No. 02/PER/M.Kominfo/3/2008  although the regulation drew strong opposition  from the business sector including the head of BKPM. A number of  telecommunications operators lease  telecommunications towers from more than 10 tower providers such as PT Tower Bersama, Protelindo, Indonesia Tower, Kopnatel Jaya, Gametraco Tunggal, Lingga Jati Al Manshurin, Komet Konsorsium, Telenet Internusa, Makassar Satu, United Towerindo, and Bali Telecom.

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