Nani Afrida ,  The Jakarta Post ,  Jakarta   |  Mon, 03/29/2010 6:20 PM  |  Business

State toll-road operator PT Jasa Marga booked Rp 992 billion (US$109 million) in audited net profit in 2009, up by 41 percent from Rp 707 billion the previous year, and expects to boost its earnings by operating and acquiring more toll roads later this year.

“The significant growth in net profit was supported by capital gain realization in toll roads,” Jasa Marga president director Frans S. Sunito said in a press release published Monday.

The financial report showed the company enjoyed 10 percent revenue growth by netting Rp 3.69 trillion, up from Rp 3.35 trillion in 2008.

The company is reportedly looking to rake in Rp 4.2 trillion in revenue this year.

“During the last five years, Jasa Marga booked 18 percent growth in revenue and 23 percent growth in earnings before interest, tax, depreciation and amortization [EBITDA],” Frans said.

Nani Afrida ,  The Jakarta Post ,  Jakarta   |  Mon, 03/29/2010 10:36 AM  |  Business

Indonesia’s largest telecommunications provider PT Telkom has allocated US$170 million in investment to construct a submarine cable connecting Java-Kalimantan-Sulawesi-Denpasar and Mataram. The nickname for the project is “Jaka2ladema”.

The project is important to improve telecommunication traffic capacity and to compete with
other telecommunication operators in the country.

Telkom president director Rinaldi Firmansyah revealed to journalists on late Saturday that the project financing would be arranged based on loans and internal cash.

“We have secured some loans from the Japan Bank for International Cooperation [JBIC] worth $60 million to help finance the project,” Rinaldi said.

“Meanwhile, the rest of the budget needed for the project will be provided by Telkom’s capital expenditure this year,” said Rinaldi.

It was reported that the loan from JBIC was for a five-year-tenure.

Rinaldi said Friday that the direct loan from JBIC was Telkom’s first in corporate-to-corporate loan settlement as usually the company was using government-to-government arrangements.

This year Telkom allocates $2.2 billion of capex of which 70 percent of the total is contributed by Telkom’s subsidiary Telkomsel, which is also the biggest contributor to overall revenue.

The submarine network system has a total 2,600 kilometers in length.

The capacity of the proposed system is about 320 gigabits per second (Gbps), which will improve

telecommunications capacity to facilitate data communication, transmission of video and voice and other e-commerce functions between islands in Indonesia.

“The network connecting Java to Mataram has been 50 percent finished. We are aiming that the project will be accomplished this year,” Rinaldi said.

He confirmed that the telecommunications system between Mataram and Kupang would be finished
by 2011.  

The system would improve communications in eastern Indonesia which is currently often neglected.

In order to help mobilize the $2.2 billion of capex this year, Telkom reportedly will issue bonds in June. Telkom finance director Sudiro Asno has confirmed that the bond’s proposed value might be increased to Rp 3 trillion ($328 million) up from the previous target of Rp 2 trillion.

Sudiro said Telkom had appointed four underwriters; PT Danareksa Sekuritas, PT Bahana Securities, PT Mandiri Sekuritas and PT Trimegah Securities to issue the bonds.

Telkom is aiming that its net profit for 2009 might grow by 5 to 7 percent, mainly due to the solid performance of Telkomsel.

In 2008, Telkom’s net profit dropped by 17.4 percent to Rp 10.6 trillion due to foreign exchange losses.

Meanwhile, in the third quarter of 2009, its revenue grew by 5.5 percent to Rp 47.1 trillion from the
same period of last year, while net profit jumped by 4.3 percent to Rp 9.3 trillion.

Previous reports said that Telkom also planned to take over one small telcom company this year to strengthen its fixed-line business. The company is also considering purchasing three telecommunications application service providers this year.

Telkom is aiming that its net profit for 2009 might grow by 5 to 7 percent.

Nani Afrida ,  The Jakarta Post ,  Jakarta   |  Mon, 03/29/2010 10:37 AM  |  Business

State mining company PT Aneka Tambang (Antam) has confirmed the company is trying to raise US$325 million in loans from Japanese banks for two projects in West Kalimantan and Southeast
Sulawesi.

“The loans will finance two projects; a chemical grade alumina project in Tayan, West Kalimantan, and a steam power plant [PLTU] in Pomala, Southeast Sulawesi,” Antam president director Alwin Syah Loebis told journalists in Jakarta late Saturday.

Around $250 million from the total loans from Japanese banks would be used to finance the Tayan project, while the rest will be allocated for the PLTU in Pomala, said Alwin.

He elaborated that the chemical grade alumina project would require some $400 million in total investment.

“The PLTU project requires $300 million in investment, of which about $75 million will be from loans,” Alwin said.

Antam aims to complete the financing of both projects this year.

“If the financing process is finished this year, hopefully the project in Tayan will start construction in the beginning of next year,” Alwin said, adding that the construction of the installations in Tayan would take between 28 and 30 months.

Alwin confirmed Antam had opened the bidding for engineering, procurement and construction (EPC) contracts. The result of the EPC bids would be announced in April.

In its website, Antam reported that it netted Rp 604.3 billion in consolidated audited net profit
in 2009, with profits having slumped by 56 percent down from 2008 as nickel prices
dropped due to the global economic downturn.

Antam sales revenue decreased 9 percent to Rp 8,711 billion, said the latest report issued on March
23 says.

In 2009 the bulk of Antam’s sales were contributed by gold production and sales valued at Rp 4,321 billion or a 58 percent increase over 2008.

“This year, the company is targeting higher ferronickel and nickel ore production and sales in line
with improved demand and sales prices,” Alwin said in Antam’s 2009 financial performance announcement.

Antam reportedly will spend $180 million in capital expenditure this year, of this $70 million
will be allocated to routine spending, $30 million for acquiring gold and coal mining interests, $40 million for cash reserves and $40 million on the newly acquired Cibaliung project in
West Java.

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Jeanniffer Filly Sumayku | The President Post 

A rapidly developing tourist resort is attracting the attention of international business communities in Indonesia. This popular destination is 170 km and only three hours drive from Jakarta.

To get there, take the Jakarta-Merak toll road and go through the scenic inland route of Serang-Pandeglang-Labuan, Banten province.

It is believed to be a “prime location” as reported in 1987 by the Japan International Cooperation Agency (JICA).

Tanjung Lesung is one of the most potential tourism objects in Banten, a new province in Indonesia. This region is situated at the westernmost tip of Java Island.

It seems unbelievable, that after passing through the busy toll road, escaping Jakarta’s usual dizziness; we arrived at a stretch of beautiful landscape that decorates the western beachfront of Banten province.

This city has a lot of historical relics such as the ruins of Surosowan Palace, Kaibon Palace, ‘Masjid Agung Banten’ [Banten Great Mosque], Speelwijk fortress and Chinese temple Avalokiteshvara.

There is also the harbor of Banten, Karanghantu [literally translated as devil rock's harbor] that is still being used to date despite the fact it was constructed centuries ago.

Banten Province consists of four regencies, two cities, 94 districts, 128 sub-districts, and 1,339 villages.

Banten is geographically strategic because it links Java and Sumatra as well as the capital city of Indonesia and West Java province. This is why it is a potential market.

One of the pioneering companies developing this region is PT. Banten West Java Tourism Development Corporation (BWJ) which was established in 1990.

The company develops promising new sites for tourism and tourism related purposes.

It is a 100% privately owned company and is among Indonesia’s leading

tourism development corporations (TDC) handling such projects in Nusa Dua Bali, Lombok, Manado, and Bintan.

As its first major project Banten West Java TDC has a license from the National Land Agency (BPN) and is supported by the Directorate General of Tourism, to develop 1,500 hectares of land at Tanjung Lesung as a new tourism destination.

It sits on a peninsula on the western coast of Banten, bordering the Sunda Strait. The area is rich in natural beauty and attractions.

A four star hotel, the Bay Villas, along with Kalicaa Villa estate, a beach club, Legon Dadap village, a sailing club, and a driving range complete the charm of this international tourist destination.

There are a variety of attractions such as water sport, spa, golf driving range, eco-tourism site, Ujung Kulon resort, Krakatoa, Liwungan and Badui village tour, etc. It is an location in which to relax.

Modern infrastructures such as electricity, telephone, mobile phone network, satellite TV, high speed Internet access, water treatment plant, waste water treatment plant, security service, nice road and beautiful scenery add to the attraction.

Tanjung Lesung is a prestigious destination with a wide range of investment opportunities. And BWJ is inviting prospective land buyers and developers to submit their bids.

PT. Banten West Java is an expert in resort planning and development and has been widely recognized as a special consultant in the development of the area.

The shareholders of BWJ are respected local businessmen well experienced in such businesses as property, textile and garment, chemicals and various other manufactured goods.

A management team of multi-skilled professionals is responsible for the project.

As a young entrepreneur, Taufik Hidayat (30), Director of Sarana Grafika Indonesia, decided to expand his business through the acquisition of Standard Factory Buildings (SFB) and live in The Veranda Golf Town House in Kota Jababeka.

“I was the first resident of The Veranda Golf Town House when I moved from my house in Jakarta to Kota Jababeka 3 years ago. I feel safe living in The Veranda Golf Town House because Jababeka is very concerned about creating a safe environment; so far everything is secure”, Said Taufik.

“I bought a house in The Veranda Golf Town House because I already owned a factory and ran a business in Kota Jababeka. Initially I thought about buying a house in another residential area in Cikarang, which is developed by another residential developer, because they are more advanced with regards to residential facilities. However, travel time to and from work exceeds 20 minutes as a result of traffic. In comparison, now I need only 5 minutes to go to my factory”.

He loves the view of the green grass of the golf course behind his house, “A good location to live, a beautiful view, and at lunchtime I can go home to have my lunch. Veranda is one of the best residential areas in the region” He added.

In the end of 2003 Taufik bought an SFB and started his printing and packaging operations in 2004. Considering that his employees need housing, Taufik bought them a house in the Gardenia Residences complex. On the other hand, the acquisition of property serves as a good investment, since the price of properties in Jababeka has increased significantly over the past years. In 2007, Taufik bought a housing unit in The Veranda Golf Town House and he bought 1,200 square meters of raw land next to his factory in 2008, which is intended for expansion.

Taufik does not only run Sarana Grafika Indonesia, he also runs a food and snack business with his friends. The snacks are made from mushrooms and sweet potatoes. For now it is still a small business but once it increases in size he will not hesitate to open more factories in Jababeka, because Jababeka is the biggest industrial estate in South East Asia.

His life guideline in running his business is very simple, “Do your best and think positive”. By doing your best, the result will be the best and if we are not doing our best, we won’t get the best result. Sometimes Taufik and his employees have a different point of view when they think less positive. However, Taufik tries to bridge their point of view and remind them to always think positive.

Associated Press ,  Detroit   |  Sat, 03/27/2010 11:38 AM  |  Business

General Motors Co. is recalling about 5,000 heavy-duty Chevrolet Express and GMC Savana vans because of a faulty alternator.

The automaker also halted sales of the vans Friday. It has also stopped production of them until it can fix the problem.

GM spokesman Alan Adler says there have been no injuries related to the recall.
Purchasers of the recalled vans, built in February and March, are urged to stop driving them and park them outside away from buildings and other vehicles.

It is rare for an automaker to halt sales because of a safety defect. GM’s decision to stop sales of the vans comes two months after Toyota Motor Corp. halted sales of eight models because of faulty accelerator pedals.

Dion Bisara | The Jakarta Globe

Vice President Boediono calling for more private-sector investment in infrastructure in Jakarta on Thursday. (JG Photo/Yudhi Sukma Wijaya)

Dubai Group Ready to Start $1b Rail Project in Indonesia

MEC Holdings, a subsidiary of the Dubai-based Trimex Group, said on Thursday that it had completed acquiring land for its $1 billion railway project in East Kalimantan and is ready to begin construction in the first half of this year.

The 130-kilometer railway is part of MEC’s plan to invest a total of $5.2 billion in the province, including in a coal terminal, an aluminum smelter and a power plant.

The projects will be developed by a joint venture with the Ras Al Khaimah Investment Authority and India’s largest aluminum producer, National Aluminium, MEC said in December.

The railway project will be run and operated by MEC Infra, a joint venture between MEC and Ras Al Khaimah. MEC Infra has obtained Indonesia’s first private railway license to develop a 130km integrated freight corridor from a mine site in Muara Wahau to a port in Bengalon, East Kalimantan.

Mashael Al Naimi, head of corporate communications at MEC, said in an e-mail to the Jakarta Globe that the major land acquisitions had been completed, with construction planned to start by the end of the first half.

MEC has said it expects the first commission of a cargo train in 2011.

Although many foreign developers have complained about the complex land-acquisition process and the frequent difficulties with local villagers, Madhu Koneru, the chief executive of MEC Holdings, said he did not find these traditional hurdles so severe.

“We were dealing with many stakeholders such as ministries in Jakarta, politicians, regional governments and villagers. The biggest concern they talked about was villagers who will not give up their land,” Koneru said.

He was speaking during The Economist’s Indonesia Summit in Jakarta on Thursday, which was attended by hundreds of prominent local and foreign business executives.

“But the truth is villagers are the easiest people to talk to. If you go to them and tell them that your plan will create jobs, they will give you their land,” he said, adding that government also proved especially cooperative in drafting the right policies.

Gita Wirjawan, the chairman of the Investment Coordinating Board (BKPM), said MEC’s experience demonstrated that the usual roadblocks deterring many foreign investors from investing in Indonesia have been reduced.

“Their ability to clear most of the land for the 130km corridor in just a few months goes against the traditional perception that land clearance is nearly impossible to do in Indonesia,” Gita said.

Foreign investors have long complained of the difficulties they face in acquiring and clearing land for large infrastructure projects. Part of the problem is that land owners tend to demand excessive prices for their property once they know that a major developer is interested.

Nurfika Osman

Students in Banda Aceh have been participating in exercises, to increase their ability to face earthquakes and tsunamis. (Antara Photo/Ampelsa)

Indonesia on Shakier Ground, Experts Warn

Massive earthquakes over the past few years have increased the volatility of the tectonic plates beneath the archipelago, experts have warned. They have called for more quake-proof buildings to withstand the heightened threat.

“We are more at risk as the ground becomes more vulnerable and the effects of earthquakes are going to be more devastating,” Mulyo Haris Pradono of the Earthquake Engineering and Disaster Mitigation Unit at the Agency for the Assessment and Application of Technology (BPPT) said on Friday.

He was referring to peak ground acceleration, a measure of earthquake acceleration on the ground and an important calculation for earthquake engineering.

Mulyo said the PGA in the southern part of Sumatra, Java, North Sulawesi and Papua was the highest in Indonesia.

The assessment is based on research conducted in 2002 and the data is expected to be updated in 2012.

Massive quakes last year that heighten the PGA included the 7.3-magnitude temblor in West Java on Sept. 2, the 7.6-magnitude quake that rocked West Sumatra on September 30 and the 7.2 tremor in West Papua in January.

According to the National Disaster Management Agency (BNPB), there are 23 earthquake-prone provinces in the country, including Aceh, West Sumatra, West Java, East Java, Bali, West Papua and Papua.

Mulyo said that as increased ground movement was inevitable, the only solution was to build quake-proof buildings in vulnerable areas.

“We are still conducting in-depth research and are assisting West Sumatra to build safer buildings with help from Japan,” he said.

“The point is that now we have to be more aware and prepare for earthquakes.”

He said the primary challenge was the lack of public awareness and effective regulations governing safe construction as people continued to build unsafe structures because they were cheaper.

Fumihiko Imamura, from Japan’s Tohoku University, said the BPPT and Japan had surveyed collapsed buildings in Padang.

“We concluded that many mistakes occurred in the structural planning of the buildings and homes,” Imamura said.

“In order to fix this we need not only a scientific approach but also a social and cultural approach to convince people that they need to live in a safer place to reduce the hazard.”

The two countries last year established a four-year research program called Multidisciplinary Hazard Reduction from Earthquakes and Volcanoes in Indonesia, in an effort to minimize the impact of disasters.

Fourteen institutions from both nations are involved in the joint research.

Aditya Suharmoko ,  The Jakarta Post ,  Jakarta   |  Fri, 03/26/2010 10:43 AM  |  Business

We mean business: The Indonesian Investment Coordinating Board chief Gita Wirjawan (second right) talks on calculating the cost of doing business in Indonesia at a two-day Indonesia Summit held at the Shangri-La Hotel in Jakarta on Thursday. Gita, who was speaking with (from left) Economist Corporate Network Director Ross O’Brien, Nokia Siemens Networks head of Indonesia sub-region Richard Kitts and Mercedes-Benz Group Indonesia president and CEO Rudolf Borgenheimer, talked about setting up businesses in Indonesia. JP/Ricky Yudhistira

Vice President Boediono has stressed the need to have infrastructure development implemented “without delay” to accelerate economic growth to 7 percent annually, from about 6 percent booked
in recent years.

“Growth does not happen by itself. To accelerate growth from the 6 percent range in recent years to 7 percent per year is going to require adding and upgrading infrastructure, from roads, railways, ports, power plants, to IT, without delay,” he said before investors at the high-profile Indonesia Summit held by Economist Conferences, a division of the Economist Intelligence Unit (EIU).

“We know that such a plan will require the private sector to play a major role. Our capacity to finance a large amount of infrastructure is quite limited compared to what is required.

We have worked hard to reduce barriers to private investment in general and infrastructure in particular,” headded.

According to the Investment Coordinating Board (BKPM), Indonesia needs to invest Rp 2,000 trillion (US$220 billion) every year including government expenditure and private investment to achieve 7 percent growth by 2014, the last year of President Susilo Bambang Yudhoyono’s second term.

Last year Indonesia’s economy grew by 4.5 percent due to strong household consumption, according to the Central Statistics Agency. The government estimates the economy will expand at 5.5 percent this year on the back of stronger investment and trade.

Some analysts said it might expand closer to 6 percent. They also said infrastructure should be improved otherwise the economy could not expand higher than about 6 percent.

BKPM’s head Gita Wirjawan said Indonesia would need US$140 billion in investment for the period
2010 to 2014 for infrastructure projects alone.

“The government is allocating $50 billion, the rest has to be funded by the private sector,” he said.

He is optimistic that the investment needed will be mobilized by promoting Indonesia globally. But Indonesia has yet to be picked up on the global investment radar due to lack of awareness he said.

The BKPM has built up intensive contacts with the International Finance Corporation to raise the global profile of Indonesia with investors, Gita said.

The BKPM has tried to cut the time to open a business in Indonesia to a maximum of seven days through its one-stop integrated service down from 40 days previously, he said.

Tanri Abeng, president commissioner at state-run telecommunications firm PT Telkom, said the government should oversee the implementations of policies issued.

Analysts say more often than not the government has issued good policies only to run at below expectation during implementation.

Industry Minister M.S. Hidayat, who was previously chairman of the Indonesian Chamber of Commerce and Industry, said the reform of labor law and of land clearance rules would ease businesses
expansion.