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ASTRA OTOPARTS TO TEAM UP WITH PIRELLI IN US$ 90 MILLION INVESTMENT. Producer of automotive spare parts PT Astra Otoparts Tbk will team up with Italian tire producer Pirelli to build a new motorcycle tire factory with an investment of US$90 million. Astra Otoparts director Robby Sani said his company has signed a memorandum of understanding to establish a joint venture company Pirelli. Based on the agreement, Pirelli will have a 60% stake in the joint venture with the rest for Astra Otoparts. The new factory will supply motorcycle tires in the Asean market as well international markets.   Construction will start this year and it is to be completed in three years or in 2013, but it will operate at full capacity only in 2016 with an annual production of 7 million units a year.

FUND FOR THE ACQUISITION OF INALUM PROVIDED. The government and the House of Representatives agree to set aside Rp2 trillion in fund for the acquisition of PT Indonesia Asahan Aluminium in the 2012 state budget. The fund will be channeled as government capital participation through PT Pusat Investasi Pemerintah (PIP), a public service agency under the finance ministry. The fund needed to acquire the smelter from the Japanese consortium that  controls the facility is around US$700 million or Rp6.3 trillion. Based on its contract signed in July, 1975, the consortium holds a 58.88% stake in Inalum with the government holding the rest. Finance minister Agus Martowardojo said the government has assigned PIP to take over the US$1.2 billion asset   in Asahan, North Sumatra. The House of Representative ahs also approved an Rp3.2 trillion investment plan proposed by PIP in Inalum this year. PIP plans to ask additional fund of Rp3 trillion for capital participation of the government to be used for the acquisition.

SIAM CEMENT ACQUIRES 30% OF CHANDRA ASRI. Siam Cement Public Company Ltd through its subsidiary SCC Chemical Company Ltd has signed an agreement  to acquire  30% of PT Chandra Asri Petrochemical Tbk at a price of Rp 3.76  trillion, The Thai company has signed a commitment to acquire 919.86 million shares  of Chandra Asri Pertrochemical  with a subsidiary  Temasek Holdings,  Apleton Investments Ltd, and the majority shareholder of Chandra Asri, PT Barito Pacific Tbk. Apleton agreed to divest its entire stake of 22.87%  in Chandra Asri,  Barito to divest 7.13% stake  Prajogo Pangestu , the owner of Barito will earn Rp893.31  billion in fresh fund . President Director of Chandra Asri Erwin Ciputra said the involvement of SCG in Chandra Asri is expected to speed up process of the company's expansion plan to increase its annual production capacity to 1 million tons of petrochemiacsl from 600,000 tons at present. SCC said it also plans to acquire the entire shares of PT Sulfindo Adiusaha, also a chemical company, controlled by Tanojo family.

TSINGSHAN STEEL TO BUILD A US$ 4 BILLION NICKEL PROJECT. Tsingshan Steel, a subsidiary of Dingxin Investment Group, in cooperation with Bintang Delapan Group, will build an integrated  nickel project to cost US$ 4 billion in Central and Southeast Sulawesi.  Industry Minister MS Hidayat said Tsingshan wants to build a nickel smelter in the upstream and downstream sector to produce stainless steel as the end product of which the country still depends on import. The plan constitutes a move by Tsingshan in responding to the government's decision banning the exports of raw minerals to be effective in 2014. Hidayat said the government will offer tax holiday or tax allowance   if the project is implemented as scheduled. Base industry director General Panggah Susanto said a Middle East company also plans to build a bauxite processing plant in Ka-limantan with an investment of US$ 2 billion. The factory will have an annual processing capacity of 700,000 tons of bauxite to turn out alumina. The company has completed a feasibility study and is waiting only for the license from the government.

MITSUI TO INVEST US$ 1 BILLION. Mitsui Co Ltd plans to build an ammonia factory near the Tangguh liquefied natural gas (LNG) plant in Papua Barat, with an investment of more than US$1 billion. Mitsui has asked the government to allocate natural gas to feed the factory. The factory will need up to 100 million cubic feet of gas per day (MMscfd) expected from Tangguh LNG plant. Industry Minister M.S. Hidayat said earlier the government will cooperate with the private sector to develop petrochemical industry in Tangguh. Base industry director General Panggah Susanto said that development of petrochemical industry near Tangguh will be focused on methanol, ammonia of fertilizer production. There are also four other companies indicating interest in producing methanol, ammonia and fertilizer in Tangguh with an investment of US$7 billion.  Ferrostaal AC plans to produce methanol, Pusri and its partners want to build a urea fertilizer plant and an Australian company wanted to build an ammonia plant.

GENTING OIL TO INVEST US$ 872 MILLION. Genting Oil Natuna Pte Ltd, an oil company from Malaysia, has secured an approval for its plan to develop the Ande-Ande Lumut field in Northwest Natuna with a total investment of US$871.9 million. Other than Genting Oil, a local oil company PT Odira Energy Karang Agung-a subsidiary of PT Odira Energy Persada has also secured an approval for its plan of development (PoD) in the Ridho Filed in South Sumatra. The company has set aside USS28.6 million for the project. Energy and Mineral Resources Minister Jero Wacik said the two oil field operators are expected to immediately implement their projects after the PoD approval.  In fact Genting Oil already signed a production sharing contract for the Ande-Ande Lumut field in 2004. The filed is expected to start producing oil averaging 5,000 barrels per day in 2014 or 2015.  The oil field is expected to remain productive in 30 years.
BANK HANA INCREASES CAPITAL BY RP 500 BILLION.  Hana Bank has received a capital injection of Rp500 billion   from its shareholder Hana Financial Group Inc in South Korea. The fund was used for business expansion in 2012. Bank Hana president Choi Chang Sik said the bank will open new branches and improve its infrastructure; therefore, the bank needs additional fund, although it already has adequate capital.  The bank has a high capital adequacy ratio of 30%. The car could be twice higher with the capital injection. The bank will open new branches and improve its network of information technology. Currently the bank has 21 branches and the number would be increased to 24 units in this year. By September of 2011, the bank had Rp 2.2 trillion in credits up 24% from a year earlier. Bayu Wisnu Wardhana, a director of Bank Hana, said the bank had recorded strong growth after the acquisition of PT Bank Bintang Manunggal as indicated by the 10 fold increase in its assets. In the next 5 years, the bank management is set to put the bank in the ranks of 40 largest lenders in the country with assets of Rp l0 trillion - Rp 15 trillion. Toward the end of 2007, Bank Hana   acquired 60.97% of Bank Bintang Manunggal.

September 2011
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