HYUNDAI SET TO ASSEMBLE MPV OF H-1 MODEL IN INDONESIA. PT Hyundai Mobil Indonesia (HMI) said it will start assembling a multipurpose car of H-1 model in Indonesia before the end of this year. Realization of the plan has been delayed for four months. The sole agent of South Korea's car maker Hyundai said the project will cost around Rp40 billion. The fund will be used to provide more infrastructures in its assembling factory in Pondok Ungu, Bekasi, and West Java. PT HMI President Jongkie D Sugiarto said the principal in South Korea has agreed to set aside fund for the investment and will supply all components or cars in completely knocked down form to be assembled in the country.
BUMI SETS ASIDE US$ 500 MILLION TO ACQUIRE MINING ASSETS. PT Bumi Resources Tbk said it has set aside US$500 million to acquire mines in the country after receiving a loan of US$1.9 billion from China Investment Corporation (CIC). Bumi, the country's largest coal producer, will involve CIC as a strategic partner in the new venture. Bumi Vice President Investor Relationship Dileep Srivastava said Bumi is eyeing mine assets including seven coal mining concessions in Maruwai, East Kalimantan of BHP Billiton. Bumi already acquired iron and zinc mines of Herald Resources Dairi at a price of US$ 563 million the loan fund from CIC will be used partly to repay a debt of US$1.68 billion and to finance working capital US$ 202 million. Bumi also said it was seeking a foreign loan of US$ 300 million to finance business expansion. Bumi President Ari S. Hudaya said the company needs more fund in addition to US$1.9 billion loan from CIC the additional fund is expected to be secured this year either in strategic loan or in bond. Ari said part of the fund will be used to finance the acquisition of a stake in PT Newmont Nusa Tenggara (NNT) by a sister company PT Multi Capital.
CHINA'S DINGXING TO DEVELOP NICKEL MINES IN SULAWESI. The Bintangdelapan group will team up with China's Dingxing Group to develop nickel mines and build a processing plant in Central Sulawesi next year. The two partners will establish a joint venture company PT Sulawesi Mining Investment (SMI) which will handle the project to cost around US$ 1 billion. Bintangdelapan President Halim Mina said the plant will have an annual production capacity of 30,000 tons of ferronickel. Dingxing is selected as partner as it has a long experience in stainless steel industry, Halim said, adding the entire production of ferronickel will be exported to China. The factory is expected to start commercial operation in five years, he said. Bintangdelapan has a concession over 47,000 hectares in the Morowali regency in Central Sulawesi.
RUSSAL CONFIRM COMMITMENT TO DEVELOP TAYAN ALUMINIUM PROJECT. Publicly traded mining company PT Aneka Tambang (Antam) said it has resumed talks on plan to build an aluminum plant in Tayan, West Kalimantan with Russia Aluminium (Russal) Russal has renewed commitment to build the US$2 billion factory processing bauxite into aluminum, Antam President Alwinsyah Loebis said . Earlier Antam expressed disappointment with Russal for delay in talks to follow up negotiations on the project, saying it would look for a new partner if the Russian company was not serious in the venture. Plan to look for a new strategic investor would be cancelled, Loebis said. Loebis said Russal asked for time until the end of this year for financial consolidation as a result of the global financial crisis. Construction of the factory could start only next year to be operational in 2012 with a production capacity of 1.2 million tons a year, he said.
SMELTING GRESIK PREDICTED SMALLER PROFIT. PT Smelting Gresik predicted its profit will shrink to less than US$30 million this year from US$40 million last year on falling price of copper cathode. The price of cathode fell to US$3,000 per ton at present from US$8,000 last year, Buda Prison Hangdog, a company manager, said. The company has gradually expanded its capacity from 200,000 tons to 271,000 tons at present, Buda said. He said the capacity will be expanded further by the end of this year to 300,000 tons to meet growing demand in the Asian and European markets. Smelting Gresik refines gold and silver and copper mainly from PT Freeport Indonesia, which operates the country's largest gold and copper mines in Papua, and PT Newmont Nusa Tenggara, which has copper and gold mine in Nusatenggara The company is jointly owned by Mitsubishi Materials Corp, Freeport, Mitsubishi Corp. And Nippon Metal Co Ltd.
13 CHINESE COMPANIES TO BUILD STEEL FACTORIES. After being delayed 13 Chinese steel companies are set to start implementing their investment plans in Indonesia in the second half of the year. The 13 companies originally planned to build new factories and additional production facilities last year but were delayed because of the global financial crisis. I Putu Suryawirawan, the director general of metal, textile machine and multifarious industries, said the 13 companies were already licensed last year. The companies plan to spend US$404.07 million in initial investment in iron making, billet, steel bar, concrete reinforcing iron, profile steel, nut and bolt industries, Putu said. The largest among them is PT Mandan Steel of China Nickel Resources Holding Co. planning initial investment of S$250 million in iron making factory in South Kalimantan. The factory will produce 500,000 tons of billets a year to be expanded later to 2 million tons with a total investment of US$ 2 billion, Putu said. He said PT Mandan also plans to produce special alloy steel with an annual production capacity of 500,000 tons.
MATAHARI TO INVEST RP 1 TRILLION IN 2010. PT Matahari Putra Prima Tbk said it will set aside Rp1 trillion in capital expenditure next year to finance business expansion. Around 30%-35% of the fund will be sued to expand its department stores and a larger part to open more outlets for its hypermarket known as Hypermart. Matahari Putra, one of the country's largest retailers reported a 14.7% increase year-on-year in sales to Rp10.4 trillion (US$1.07 billion) in the first nine months of this year. Sales ahead of the Idulfitri in September contributed much to the total sales in the nine months period, its President Benjamin J Mailool said. Matahari Department Store chalked up Rp4.5 trillion in sales or an increase of 18% and sales recorded by Matahari Food Business (MFB) rose 13.1% to Rp4.8 trillion, Benjamin said. He said Matahari hopes to post larger sales in the last quarter of this year after the opening of three new outlets of department store and a hypermarket.
ASTRA AGRO TO BUILD TWO NEW CPO FACTORIES. Publicly traded agribusiness company PT Astra Agro Lestari said it plans to build two crude palm oil processing plants with an investment of Rp200 billion ( US$19 million) next year. The new factories to be built in South Kalimantan and South Sulawesi will have a processing capacity of 45 tons of fresh oil palm fruit bunches per hour, Vice President of the company Tonny Hernawan said. Currently the company has 21 factories with a processing capacity of 985 tons per hour. The factories are located in various areas in Sumatra, Kalimantan and Sulawesi. The company posted an 8.8% increase in CPO sales to 767,940 tons in the first nine months of this year from the same period last year. The company also recorded an increase in the sales of palm kernel expeller (PKE), up 49.3% to 28,320 tons from 18,970 tons.
POSCO TO BUILD MULTI BILLION DOLLAR STEEL FACTORY IN INDONESIA. South Korea's steel giant Pohang Iron & Steel Corp. (Posco) and state steel maker PT Krakatau Steel move closer to bringing to reality their long awaited plan to build a new steel plant in Indonesia. The two companies have signed a memorandum of understanding to build the factory with an annual capacity to produce 6 million tons of steel plates, slab and hot rolled coils (HRC) in two phases. The first phase of construction for a capacity of 3 million tons will start in August, 2010 to cost US$3 billion, to be followed with the second phase in 2011. The first phase is to be completed in 2013 KS President Fazwar Bujang said, adding KS will have a 30% share in the joint venture with the Korean partner to have 70%. Earlier Fazwar said the plant to be built in the Cilegon Industrial Complex, Banten, would increase Krakatau's production capacity to 3.5 million tons a year from 2.5 million tons at present. Korean Ambassador Ho Young Kim said the investment in the joint venture is the largest so far by Korea in Indonesia.