2008-2009 DATA CONSULT. All rights reserved.
MITRA ADIPERKASA AND MATAHARI PUTRA PRIMA EYEING EASTERN INDONESIA. Two major retailers PT Mitra Adiperkasa Tbk (MAP) and PT Matahari Putra Prima Tbk (MPP) are directing their business expansion to the eastern part of the country where the market is highly potential. They want to penetrate the market although business expansion to the eastern regions is hampered by inadequate infrastructure.  The two retailers are set to open outlets in Abepura, Sentani and Manado. A number of other modern retailers already established foothold in the eastern and central parts of the country such as PT Carrefour Indonesia with three outlets in Makasar, Matahari Departmen Store (MDS) having seven outlets in Kalimantan, seven outlets in Sulawesi and one in Maluku. Meanwhile, the Hero Group has a number of outlets in Sulawesi, Kalimantan and Papua. On 16 December, 2010, MPP opened hypermarket outlets of Hypermart in Manado. Currently MPP has four Hypermart outlets in Kalimantan and four in Sulawesi. In Ambon, it has a supermarket outlet. MPP plans to open outlets of Sport Station in Ambon and Jayapura, this year.

WILMAR READY TO INVEST US$ 900 MILLION. The Wilmar Group plans to move six of its crude palm oil (CPO) factories from Malaysia and China to East Java and Riau with an investment of US$900 million in two years. Industry minister M.S. Hidayat said Wilmar originally planned to build CPO plant in Gresik, East Java, prompted by adequate infrastructure that would allow immediate implementation of investment. However, the government asked Wilmar to also develop downstream industry outside Java in Riau where the company has large upstream business units.  The government wants to create equal distribution of industrialization. In addition, the government has   included Riau in its program of industrial clusters. Tow industrial clusters for downstream industries will be built in that region - in Dumai and Kuala Enok. Meanwhile, the government is expected to announced and start development of industrial cluster in Sei Mangke in North Sumatra.

TOTAL PLANS TO OPEN 8 MORE UNITS OF SPBU THIS YEAR. PT Total Oil Indonesia plans to open 8 more units of fuel filling stations (SPBU) in 2011. The new units will bring the total number of SPBU of the French company to 15 units. According to the Brand & Communication Executive of Total Oil Indonesia Rulianto Syahrul, the company has long term business plan in the downstream sector in the country especially SPBU business. In 2011, Total plans to build at least 8 units of SPBU. In December 2010, Total already commissioned new units of SPBU in Bintaro and Bekasi. Total also already has units of SPBU in Daan Mogot, MT Haryono, Warung Buncit, BSD, and Modern Land and in Bekasi. Rulianti said a unit of SPBU will cost around US$ 2 million.

SEMEN GRESIK NEEDS US$ 700 MILLION. PT Semen Gresik Tbk needs around US$ 700 million to build two cement factories in West Sumatra and Central Java respectively in 2011 and 2012. Company's president DWI Sutjipto said construction of the two factories is to meet the company's production target of 30.5 million tons a year in 2015.  The company will seek to raise fund to finance the project through bank loans or by issuing bonds. Each of the factories will have a production capacity of 2.5 million tons. This year, the company hopes to complete the construction of two factories in Tuban and Tonasa with a total capacity of 5 million ton per year. Construction of the factories began in 2009.  This year the company hopes to increase its production capacity to 20.5 million ton from 18.5 million tons at present. Semen Gresik estimated its net profit reached Rp 882 billion (US$ 90.1 million) in the first quarter of this year or an increase of 10% on-year. The country's largest cement producer performed well in the first quarter of this year posting a 7.5% increase in sales with income estimated to reach Rp 3.5 trillion in the first three months of the year

BHAKTI INVESTASMA HOPES TO WRAP UP ACQUISITION OF MINES. Investment holding PT Bhakti Investasi Tbk hopes to wrap up the process of acquisition of coal mine and oil and gas field in South Sumatra, East Kalimantan and Papua. Negotiations are already in the final phase on the acquisition, Bhakti Investama director Darma Putra said. The company already has 8 coal mining concessions and oil and gas projects in South Sumatra. It also has oil and gas concession in Semai 3 in Papua.  Explorations are already underway in the Semai 3 oil and gas block.  Earlier it was reported that Bhakti Investama would make available US$ 100 million in the first   phase of explorations for oil in the Semai 3 block in Papua.  The block has a proven reserve of 300 million barrels of oil with potential reserve of 1.6 billion barrels, Oil and Gas Director of Bhakti Investama Irawan Budiono said. The company will start with seismic surveys in June for which up to US$3 million will be needed. Irawan said the offshore block is expected to start turning out oil commercially in 2014.

TWO US COPPER AND GOLD MINING COMPANIES TO GO PUBLIC. Two US copper and gold miners will launch initial public offering (IPO) this year, the Indonesian Stock Exchange (BEI) said. PT Newmont Nusa Tenggara (NNT), which has large copper and gold mine in Sumbawa, West Nusa Tenggara, will launch IPO in the second half of the year, BEI chief Ito Warsito said.  The trading of NNT would jack up the stock market capitalization to Rp 60 trillion, BEI President Ito said. Finance Minister Agus Martowardojo, who recently signed the purchase of a 7% stake in NNT for the government, however, said he had not received report about NNT's IPO plan. Meanwhile, PT Freeport Indonesia, the country's largest copper and gold producer with mine in Papua, will follow to float shares on the BEI before the end of this year. Later, however, NNT said its IPO plan may not take place this year with problem in its share divestment process. NNT already prepared its financial report for the IPO, planned for last year, but implementation had been hampered by the delay in the process of divestment, said Martiono Hadianto, the president of the company. The Finance Ministry has urged the Energy Ministry to immediately approve the government's purchase of a 7% stake, which is the last remaining part of NNT shares to be divested, to allow the company to proceed with its IPO. The finance ministry already signed the sales purchase agreement, and agreed to pay US$ 246.8 million for the 7% stake, but for unclear reason, the Energy Ministry had held back giving the necessary endorsement.

BANK HANA READY FOR MERGER WITH KEB. PT Bank Hana Indonesia said it is ready for merger with PT Korea Exchange Bank (KEB) Indonesia in line with the process of acquisition by its parent company in South Korea, Hana Financial Group Inc of Korea Exchange Bank, which controls KEB Indonesia. Bank Hana Indonesia President Choi Chang Sik said the acquisition of Korea Exchange Bank, which is the parent company of Bank KEB Indonesia by Hana Financial, was to be completed in March, 2011. After the acquisition, Hana Financial will be the majority shareholder of combined banks Bank Hana Indonesia and KEB Indonesia. Currently, Korea Exchange Bank has a 99% stake in KEB Indonesia with a capital of Rp 150 billion with PT Clemont Finance Indonesia holding the 1% stake. HanaBank-Korea has a 75.1% stake in Bank Hana Indonesia and 19.9% stake in International Financial Corporation, a subsidiary of the World Bank. 

AUTO 2000 TO INVEST RP 800 BILLION. Auto 2000, the main dealer of Toyota cars in Indonesia said it will invest Rp 800 billion this year to finance expansion of its business to open new outlets and after sales service units in the country. CEO of PT Astra International Tbk Toyota Sales Operation (Auto 2000) Djodjana Jody said the investment plan this year is larger compared to Rp 700 billion last year. Djodjana said despite the greater challenge this year, Auto 2000 will continue with its expansion plan. Until now Auto 2000 has a chain of 145 outlets including after sales service unit s consisting of 72 branches and 73 indirect outlets in Indonesia. Auto 2000 sets sales target at 220,000 units of cars this year to maintain its market share. Auto 2000 contributes 80% to the total sales of Toyota cars in Indonesia.

XL TO STRENGTHEN NETWORKS IN EASTERN INDONESIA. PT XL Axiata Tbk has strengthened its infrastructure in eastern Indonesia (KTI) by modernizing networks and using 500 additional units of base transceiver stations (BTS) in the first half of this year.  Vice President of XL North Region Nuruddin Al Fithroh said the expansion of network is to keep pace with the growing number of customers in Kalimantan, Sulawesi, Maluku, and Papua.  Nuruddin said most of the 500 units of BTS will be built in Kalimantan and Sulawesi to cost from Rp 1 billion - Rp 2 billion per unit.  In Maluku and Papua, BTS units will be built in areas where here is no operator of BTS. The management of XL has decided to combine Kalimantan, Sulawesi, Maluku, and Papua into one special operation area in a bid to attract more customers. XL North Region covers part of area formerly area of XL Region Jabodetabek and Kalimantan and XL East Region that covers Sulawesi, Maluku, and Papua. Modernization of networks by XL also includes   replacement of radio base station (RBS) and base station controller (BSR) with new ones. Earlier XL Axiata announced it had launched bundling packages for Apple's popular iPhone 4 in a bid to attract higher-end consumers and compete head-to-head with Telkomsel, the country's largest cell phone operator.  For the launch, the company had ordered 25,000 units, said Hasnul Suhaimi, president   of XL Axiata.

L'OREAL TO INVEST US$ 100 MILLION FOR EXPANSION. PT L'Oreal Indonesia said it has set aside US$ 100 million this year to build a new factory and to finance research, expansion of distribution systems, advertisements and promotions. Company's president Jean Christophe Letellier said Indonesia is a new emerging market and the market is highly potential. Around US$ 50 million of the fund will be needed to finance the construction of the factory which will have a production capacity of 300 million packs a year in 2012. The capacity will be expanded to 500 million packs in 2015. The new factory will expand the production capacity of the company. The company already has a factory with a capacity of 100 million packs a year. The rest of the fund will be used to finance advertisements and other promotion campaigns, research and expansion of distribution networks. Around 20%-25% of the production of the new factory will be disposed of on the domestic market and the rest will be exported such as to Malaysia, the Philippines and Thailand.

FORMER SCANDAL HIT BANK CENTURY FOR SALE. The government owned Saving Insurance Agency (LPS) has offered to sell PT Bank Mutiara at a price of at least Rp6.7 trillion the amount provided by the government for the controversial bail out of the scandal hit lender. LPS chief executive officer Firdaus Djaelani said the process of divesting the bank formerly known as Bank Century will start in August. LPS  took over 99.996% ownership of  the bank after the government  injected Rp 6.7 trillion in fresh fund to  prop up  the bank formerly owned by a businessman now a law fugitive. The government claimed the bail out was to prevent systemic effect amid global financial crisis that could have disrupted the country's entire banking system. Firdaus said yesterday currently the process of divestment is being discussed with its financial consultant PT Danareksa Sekuritas. He said divestment would be postponed if no buyer agreed to buy it at the minimum price. The case of bank century is still an unsolved corruption issue now in the hand of the Corruption Eradication Commission.  High ranking officials have been implicated in the case including Vice President Boediono, former finance minister Sri Mulyani and Bank Indonesian governor Darmin Nasution.

LOTTE TO BUILD US$5 BILLION PETROCHEMICAL PROJECT IN INDONESIA. South Korea's conglomerate Lotte Group said it wants to build a US$ 5 billion petrochemical plant in Indonesia with construction to start next year. Feasibility study of the project to be developed in Banten would start this year, Lotte chairman Shin Dong-bin said, adding construction would take around four to five years. Shin said Lotte Group is also interested in expanding its retail business in the country opening hypermarket and cafeteria. The Korean company already has whole sales business in the country known with the brand of Lotte Wholesales. Budi Susanto  from the association of aromatic, olefin and plastic industries  said with an investment of US$ 5 billion Lotte  could build a petrochemical plant  as big as  one owned by PT Chandra Asri Petrochemical in Cilegon, Banten. Currently Chandra Asri has the capacity to produce 600,000 tons of ethylene and 300,000 tons of propylene. Lotte Group with units operating in various business areas from food processing industry to hotel, retail, electronics, information technology, publishing , finance and entertainment industries . Lotte Group already makes its presence in petrochemical industry in the country through Honam Petrochemical Corp when it acquired Titan Chemical Corp toward the end of 2010. Currently Titan produces LLDPE (linear low-density polyethylene) and HDPE (high density polyethylene) respectively with production capacity of 200,000 tons and 250,000 tons a year.

DAIHATSU SPENDS RP 2.1 TRILLION ON NEW FACTORY. PT Astra Daihatsu Motor (ADM) marked the implementation of an Rp2.1 trillion (20 billion yens) new car factory in Bekasi, West Java with a groundbreaking ceremony earlier this year.   The factory which will have an annual production capacity of 100,000 units of cars is to be operational by the end of 2012, ADM president Sudirman Maman Rusdi said.  The new factory will increase ADM's car production capacity to 430,000 units a year from 330,000 units at present, Sudirman said in the ceremony in Karawang Timur. The new factory will produce Daihatsu and Toyota cars partly for exports, he said. The construction of the new factory is prompted by growing demand for the car products of ADM which recorded a 315% increase in sales from 95,000 units in 2006 to 330,000 units last year. Sudirman said  PT Astra Daihatsu Motor, the sole agent for Daihatsu cars in the country, production had been fully normal  after a setback  earlier  over shortage in supply of components from its principal in Japan. Daihatsu car component factories in Japan were damaged by March's tsunami resulting in shortage in supply of components. Sudirman said its principal in Japan has confirmed that supply of components especially microchips would be normal in June. Recovery of Toyota Astra Motor will mean recovery of Daihatsu Motor, which is also a unit of the Astra Group, Sudirman said. Toyota Astra Motor already announced that its production had been normal.  

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