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DENSO BUILDS NEW FACTORY IN INDONESIA. Car component producer Denso Corp. of Japan plans to build its fourth factory in Cibitung, Bekasi, and West Java.  Denso's chief executive officer Nobuaki Katoh  gave no details about the project, saying the amount of investment is being calculated Katoh said his company already has two component factories in Bekasi and one in Sunter, Jakarta. Katoh said currently his company could supply components for up to 800,000 cars a year and the capacity would be more than doubled when the new factory is operational in 2015. He said his company could supply up to 2 million units of components a year. The new factory will be built in the MM 2100 Industrial Estate in Cibitung; West Java Denso products include radiators, oxygen censor, air conditioners, fuel filters, spark plugs, etc. The company exports 70% of its production.

ANTAM BUILDING NICKEL SMELTER HALMAHERA TIMUR. State mining company PT Aneka Tambang (Antam) is starting the construction of a US$ 1.6 billion nickel smelter after a ground breaking ceremony late last year. The smelter with a production capacity of 27,000 tons of ferronickel to be built in Halmahera Timur is expected to be operational in 2014.  Antam's president Alwin Syah Loebis said a subsidiary PT FeNi Haltim has been established to operate the factory. Alwin said the completion of the project is set to coincide with the implementation of the law on minerals and coal banning the exports of unprocessed minerals in 2014. The law will force many mining companies to build their owns processing factories. Alwin said Antam has arranged project financing with a bank consortium grouping major local and foreign lenders such as Bank Mandiri, Bank Rakyat Indonesia, Goldman Sachs and Deutsche Bank. The consortium has agreed to provide up to US$ 1 billion, he said. The project is included in the Master Plan for Acceleration and Expansion of Indonesian Economic Development. (MP3EI).

DAIHATSU TO BUILD NEW FACTORY.  PT Astra Daihatsu Motor (ADM), the producer of Daihatsu cars in Indonesia will invest Rp 2.1 trillion in a new factory in Karawang, West Java with a production capacity of 100,000 units of car per year. The new factory  will make Indonesia the  main production base of  Daihatsu  and  Toyota cars for  Asian market, said Koichi Ina, the  president of Daihatsu Motor Co. Koichi said  in the future, the market demand will be more for fuel efficient and green cars Indonesia  will play a leading  role in the production of low cost green cars, he said. The factory is expected to be operational by the end of 2012. Meanwhile, ADM is studying a US$ 1 billion investment plan in research and development in Karawang. The facility will be the largest Daihatsu R&D in the world outside Japan, ADM president Sudirman MR said. Sudirman said ADM is drafting a blue print for the development of R&D facility to be completed in five years. The principal in Japan has approved the project and ADM already sent technicians for training in Japan, he said. He also said ADM will cooperate again with PT Toyota Astra Motor to produce new variants of Avanza and Xenia. Avanza has been a leader in the MPV market in the country in the past several years.
BANK MANDIRI OKAYS RESTRUCTURING OF POLYPRIMA'S DEBT. Bank Mandiri has agreed to restructure a US$ 144.5 principal debt of PT Polyrpima Karyareksa, an ailing producer of purified terephthalic acid (PTA). The agreement was the largest restructuring on non performing loans by Bank Mandiri, said Royke Tumilaar, a director of the state lender. The restructuring would significantly reduce the bank's NPL rate, Royke said, adding by September the country's largest lender had a net NPL of 0.57% and a gross NPL of 2.5%. Polyprima which has a production capacity of 450,000 tons of PTA a year is one of the bank's largest borrowers having NPL, the bank's president Zulkifli Zaini said.   The company stopped operation since October 2007, but it is expected to resume operation after the restructuring with the involvement of strategic investors the Indorama Group, the world's largest polyester producer. The involvement of Indorama Group will provide a captive market for PTA production of Polyprima as Indorama needs additional supply of 2.4 million tons of PT a year, Zulkifli said.

PHE SETS HIGHER OIL PRODUCTION TARGET. PT Pertamina Hulu Energi (PHE) sets its oil production target at 71,000 barrels per day in 2012 or an increase of 16% from 61,000 bpd this year. Increase is expected in the production from a number of major blocks operated by PHE, said Salis Aprilian, the president of the subsidiary of state oil and gas company PT Pertamina. The West Madura Offshore block is expected to produce 20,000 bpd, up from 6,000 bpd and Offshore North West Java is predicted to produce 35,200 bpd up from 32,000 bpd, Salis cited.  In addition, PHE will add one more rig to bring the total number of its rigs in operation to three units to accelerate the process of drilling, he said.  The company will set aside Rp6 trillion each for capital expenditure and operating cost or an increase of 20% from this year.  The company recently struck new oil and gas reserve in the block.
BARRY CALLEBAUT AG TO BUILD A CACAO PROCESSING PLANT IN MAKASAR. Barry Callebaut AG, a Swiss based producer of chocolate and other cacao products has formed a joint venture company with PT Comextra Majora of Indonesia with an investment of US$ 33 million. The new joint venture company is named PT Barry Callebaut Comestra Indonesia based in Makasar. PT Comextra Majora director Jimmy Wisan said Barry Callebaut will have a 60% share in the joint venture with PT Comestra Majora taking the remaining 40% share. Jimmy said the joint venture company will build the cacao processing factory in Makasar with an initial production capacity of 28,000 tons per year. The factory is expected to be operational in 2013. Barry Callebaut will be responsible for the management and operation of the factory. It will buy the factory products. Meanwhile, PT Comextra Majora will supply cacao beans. Indonesia is the world's third largest producer of cacao beans. Sulawesi is the largest cacao production center in the country.
TELKOM TO SET ASIDE RP16 TRILLION FOR CAPEX IN 2012. PT Telekomunikasi Indonesia Tbk (Telkom) will set aside Rp16 trillion for capital expenditure in 2012 up from Rp 14.5 trillion in 2011. Telkom's president Rinaldi Firmansyah said bank loans would make up 30% of the capital expenditure of the state company. Rinaldi said the fund would be used partly to develop cloud computing service.   He said the company will change the copper cables of fixed line with optic fiber to improve its data service.  The company will also will continue development of undersea telephone cables between Manado and Papua, he added. Earlier Telkom said  it would provide Rp 21.19 trillion for the development of true broadband giving  household subscribers  Internet  access  with a speed of 20 Mbps - 100 Mbps. Rinaldi  said the project called "Homepass" is to be completed in 2015 targeting 13 million  subscribers in at least 497 cities. The marketing targets of true broadband service include broadband for home digital environment (TV, Internet, and Telephone), broadband for enterprise and government (the people, the government and the business sector), and broadband anywhere (internet, voice, and video). The network is expected cover the entire country from Sumatra to Papua.

MARUBENI WINS TENDER FOR THE CONSTRUCTION OF PATUHA GEOTHERMAL POWER PLANT. The consortium of Marubeni Corporation and PT Maklamat Cakera Canggih has won tender for the engineering, procurement and construction of 55-MW Patuha geothermal power plant to cost around US$ 64 million and Rp 192 billion. Marubeni already built a number of power generating projects in Indonesia. One of its projects is a 600 MW Cirebon power plant now under construction. The consortium plans to complete the construction of the new project in 2014 or 24 months after the signing of its contract. The Patuha power plant will increase the capacity of the Java-Bali system. The state owned Electricity Company which will buy the output and Geo Dipa that owns the project have agreed on a power price at US$ 0.068 per kWh, up from US$ 0.045 per kWh earlier set. Meanwhile, PT Pertamina Geothermal Energy (PGE) said Indonesia will likely succeed only in building geothermal power plants with a total capacity of 852 megawatts falling far short of its target of 1,343 MW set for 2015.  There are a number of factors causing the shortfall such as one related to license  as most of geothermal power projects are located in protected forest areas, PGE President Abadi Poernomo. Abadi said utilization of lands in conservation forests is against the law. He said until September 2011, geothermal power plants in operation had only a total capacity of 272 MW. Other factors delaying implementation of geothermal power projects include inadequate infrastructure, he said.

December 2011
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