Download - Investasi
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012014
INFRASTRUCTURESupporting Indonesias Competitiveness and
Future Economic Development
INFRASTRUCTURE PRIORITYThe Iconic Smelter Investment
Reach New HeightsI N V E S T
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www.bkpm.go.id
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Publisher:INDONESIA INVESTMENT COORDINATING BOARD
Redaction:Jalan Jend. Gatot Subroto No. 44 Jakarta 12190 IndonesiaTelephone: +6252880410,52880411www.bkpm.go.id
PREFACE In this edition, the preparedness of Indonesias infrastructure in terms of
facing challenges ahead will be elaborated. Given the new elected Government,
the positive euphoria is expected to have a good impact on the increasing public
service performance in every levels of both central and local government as it has
been mandated by the constitution.
Surely, the new established terms of Maritime Shaft and Sea Toll cannot
be separated from Indonesias cultural root which sees sea as the source of
prosperity. The idea of Indonesia as a marine country is also supported by the
reliefs carved magnificently on Borobudur Temple which portrays the shape of
boat.
The theme Infrastructure Investment: Supporting Indonesia Competitiveness
and Future Economic Development is important since it is the essential
base for a country to develop. Infrastructure improvement has been a focus
of development in every era of government. From 2009 to 2014, under the
coordination of Ministry of Finance of the Republic of Indonesia, the government
made an intense effort by establishing Committee of Infrastructure Priorities
Development Acceleration (KPPIP) and also Indonesia Infrastructure Fund (IIF).
Altogether, the whole structures of government from Bappenas with its
Blue Book or Green Book to the Indonesia Investment Coordinating Board
(BKPM) strive to create a friendly climate for the investors working in the national
infrastructure development sector. To improve and develop the quality of
infrastructure is, of course, the toughest job since it needs a focus on key details.
But the study is already made, thick and complete. What needs to be done is to
execute the study and analysis into the field.
The International World, as well as the citizen itself, is waiting for Indonesia
as The Next Giant in Economy to prove the bright performance in the future.
INDONESIA INVESTMENT COORDINATING BOARD
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Indonesia Today
Success Story
Lifestyle
Brand
Infrastructure
AEC 2015
Cigading Habeam
Profiles of Infrastructure Projects
A Piece of Indonesian Beauty
SIEMENS
Geothermal: The Potential worth Exploring
Maritime CountryMonumental Moment
6,000 Trillion Rupiahs
BKPM One Stop Service
All For Infrastructure
Marine Potential
Smelter: The Icon of National InvestmentA Glance on the Indonesian Infrastructure
Negative List of Investment
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FROM BRIC TO MINT 12VISTA 14
Indonesian Global BrandWorld-Class Brands
Potentials
Highlights
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Indonesia Today On October 20, 2014, after having the frenetic General Election, the newly elected President Joko Widodo was inaugurated along with his Vice President, Jusuf Kalla. It was a very historic Monday to be remembered as the day when the world witnessed a
humble man being elected as the leader of a great nation with ethnics, cultures and beliefs
diversity. The pair, well-known for their nickname Jokowi-JK, has a huge mandate to be
the helmsmen of the Republic of Indonesia.
The cultural parade thrown after the inauguration was held until midnight showing the
bubbled up euphoria. Speculations arose as the euphoria continued saying that this
leadership might bring a different nuance. How is it different? At least, in terms of the
usurping authority process, it went smoothly. In historians point of view, that was when
the process revolved without the essence of hostility. Hopefully, this positive energy could
be a strong base for the acceleration of Indonesian development in the future.
OutlookThe fate of Indonesian economy cannot be separated from the world economic
performances. In the global market competitiveness era will be even tighter given the
fact that the enforcement of free market everywhere in the world urges each country to
be ready optimally. The trade competition will reach a phase of Face to Face or Head to
Head usually leading to a win or lose situation.
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With a new government and the challenging homework to improve infrastructure in the
situation where the budget is tight, it is not an easy work to do. However, Indonesia,
well-known for its perseverance, is believed to be able to cope with the challenges by
working...working...working as it was quoted from President Jokowis first speech in his
inauguration. Even Jokowi JK Cabinet is named Working Cabinet (Kabinet Kerja).
Sri Mulyani, one of Indonesias most prominent name in Economy, in the ministrial meeting
of APEC on October 2014 said (The year) 2014 has been a disappointing year. The US
economic recovery is proceeding, and U.K. economic growth is encouraging, but growth
in Europe is still disappointing. The global growth headwind is stronger than i expected,
and policy responses to neutralize the headwind should be much stronger by many
policymakers. Sri Mulyani now works as a Managing Director of World Bank.
In the next upcoming years, with the condition predicted to be tougher than 2014,
Indonesia needs to precisely walk and maneuver in order to anticipate all of the
possibilities. The market, citizen and all Indonesias joints of life optimism are expected to
be the directed and tough foundation for all economic activities.
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AEC 2015ASEAN (Association of South East Asia
Nations) was established on August 8, 1967
in Bangkok. ASEAN was initiated by 5 (five)
Foreign Affairs Ministers from Southeast
Asia i.e.:
1. Minister of Foreign Affairs of The
Republic of Indonesia: Adam Malik
2. Minister of Foreign Affairs of Malaysia:
Tun Abdul Razak
3. Minister of Foreign Affairs of Thailand:
Thanat Koman
4. Minister of Foreign Affairs of Philippine:
Narcisco Ramos
5. Minister of Foreign Affairs of Singapore:
S. Rajaratnam
Another 5 countries in Asia, later, joined
ASEAN:
1. Brunei Darussalam on January 7, 1984
2. Vietnam on July 28, 1995
3. Myanmar on July 23, 1997
4. Laos on July 23, 1997
5. Cambodia on December 16, 1998
ASEAN CHARTEREDThe year of 2007 has been a historic year
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for ASEAN since the territory had a new
feature. The idea of a more structured and
systemized ASEAN was possible. It was even
more visible with the signing of ASEAN
Charter as a joint constitution framework
of ASEAN.
The success of establishing the charter did
not necessarily depict the solid cooperation
among ASEAN members. The challenges
came from within the organization,
especially in terms of implementing the
charter in order to create a more integrated
power.
However, the existence of charter obligating
the members to obey the consensus
decided by ASEAN has inflicted certain
inconvenience among some parties which
tend to oppose the consensus. But the
charter itself has been specially designed
to be not too strict to those members who
could not obey the agreements.
History Of AEC 2015In the 9th ASEAN Summit held in Bali
in 2003, the ASEAN leaders agreed to
establish an ASEAN community on the area
of political security (ASEAN Political-Security
Community), Economy (ASEAN Economic
Community) and Social and Cultural
(ASEAN Socio-Culture Community), also
known as Bali Concord II.
The community was started with the
implementation of ASEAN Economic
Community (AEC). Before, it was agreed
that AEC would be implemented in 2020.
But in January 2007, it was decided that
AEC would be conducted in 2015. There
were 4 (four) pillars of AEC that ensured
single market and production base;
competitive economic region; region of
equitable economic development and
region fully integrated into the global
economy.
The objectives of AEC 2015 is to preserve
political stability and ASEAN regional
security, improve regional competitiveness
in global market and boost economic
growth, eradicate poverty as well as rise the
living standard among ASEAN members.
The 4 (four) pillars of AEC 2015 ensuring
single market and production base is
supported by fundamental elements of
free flow of goods, services, investment,
capital and skilled labor. Given the elements
that allow the flow of imported goods and
skilled labor, it is expected that ASEAN
countries, including Indonesia, will be more
competitive. This can be both opportunity
and also a challenge for Indonesia.
In 2015, ASEAN will be a single market
region of AEC. With the implementation
of it, there will be certain implications
on Indonesian economy. What needs
to be anticipated is that when there is a
single market in one community, the one
providing the best and cheapest products
will be the winner.
When the European Economic Community
(EEC) was established, the members were
being disadvantaged. The unpreparedness,
gap, domestic turmoil, leaders and
business peoples competence of each
country were in stake. Until now, some of
the strongest countries in European Union
have to struggle of becoming a donor
country in order to preserve their territory.
Some other countries even have to deal
with the continuous curse of having to be
assisted. Some have to let go all of their
valuable assets to survive. Learning from
EEC unfortunate experience, ASEAN makes
some adjustment so that the noble goals of
prospering the community will not backfire
disadvantaging each other. In regards
to this matter, Indonesia has a series of
preparation and anticipation.
AEC is aimed to be a different entity from
European Economic Community (EEC). It
ensures that the decision-making will be
in the hand of each member country. That
makes it a different model of integrated
economic region than EEC. The integration
of EEC model is conducted by giving
the decision in the hands of institution
designated to handle European economic
problems. Thus, the establishment of such
institutions will weaken the sovereignty
of each country. On the other hand, AEC
model places the member countries as the
decision-makers.
On ASEAN level, decisions are made
based on mutual agreement. Hence, each
countrys role to be a decision-maker is
being preserved. One of the processes
of implementing AEC is to develop AEC
blueprint.
Aec BlueprintThe blueprint contains four fundamental
pillars, i.e.:
ASEAN as a single market and production
base with seven core elements of free flow
of goods, services, investment, capital and
skilled labor.
ASEAN as a competitive economic region
with six core elements of competition
policy, consumer protection, intellectual
property rights, infrastructure development,
taxation and e-commerce.
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ASEAN as an equitable economic development with two core elements of SME
development and initiative for ASEAN integration of CMLV (Cambodia, Myanmar, Laos and
Vietnam).
ASEAN as a region fully integrated into the global economy with two core elements of
developing a coherent approach towards external economic relations and enhanced
participation in global supply networks.
ASEANASEAN population is 6% from Worlds total population, while Southeast Asias GDP
contributes 3% to the worlds economy. By 2050, it is estimated that the ASEAN
population will continuously increase 9% of the worlds population.
Indonesias position in ASEAN is very strategic whereas 43% of the ASEAN citizens are
Indonesian (600 million people) and geographically Indonesian territory covers 53% of
ASEAN territory. With these advantages, Indonesia must be able to see and seize AEC with
all of its opportunities and challenges and immediately take necessary actions to utilize the
positive impacts of AEC.
Some of the opportunities that can be utilized are the chance to create new markets. If
not, Indonesia will only be the market of imported products which will have a negative
impact on local products. In the area of financial sector, AEC can be a chance for
Indonesias banking sector to penetrate a new market. This is, of course, not an easy task
since the other ASEAN members might have the same target. The fact that the utilization
of banking services in Indonesia is low makes us vulnerable to be a target of the ASEAN
banks and financial institution.
Indonesian LogisticSuppressing logistic cost is a challenge faced by Indonesia in order to increase
competitiveness. Our recent inefficient logistic cost will make local products losing the
competition while imported products will keep flowing in. Suppressing the cost needs to
be done from both sides of supply and demand.
The high logistic cost is resulted from inadequate logistics infrastructure. Indonesias logistic
cost is 24% of the nation GDP. The number is considered high comparing to that in
developed country like USA, Singapore and developed countries in Europe which is around
11% of their GDP.
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9 Industrial SectorsThe government has prioritized nine industrial sectors to be developed in order to fill
ASEAN market towards the upcoming AEC. The nine sectors are agribusiness industries
such as CPO, cacao and rubber; fish processing industry: TPT: footwear industry; leather
and leather goods industry; furniture industry; food and beverage industry; fertilizer and
petrochemical industry and basic metal and machinery industry. The reason why those
sectors are being developed is because they have a relatively better competitiveness
compared to those in other countries of the region.
Other than that, to secure domestic market towards the flow of the similar products from
other ASEAN countries, seven other industrial sectors also needs to be developed. Those
seven sectors are automotive industry, electronic industry, cement industry, textile industry,
footwear industry, food and beverage industry and also furniture industry.
A set of programs and policies for those sectors need to be prepared in order to boost
the competitiveness of each sector. Other things that need to be done are optimization
and socialization of AEC to the industrial stakeholders; proposing the acceleration of the
safeguard enactment and anti-dumping policy for imported products; adding facilities
of research laboratory and increasing the human resource competitiveness of the
industry. The establishment of national standard of working competency in each sector;
reinforcement of Small-Medium Enterprises (SME) and development of new industrial
entrepreneurship also need to be done.
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FROM BRIC TO
MINTJim ONeill, previously served as CEO Goldman Sachs, has been
considered to be an influential economist in the financial world.
He publishes his analysis on four countries that show a remarkable
economic movement.
Brazil, Russia, India and China are predicted to be the upcoming
giants in global economy. The term BRIC, invented by Jim ONeill
in 2001, has been very well-known and welcomed by international
medias. The fact that now China overlaps USA proves the theory.
The table shown above proves how China grows very strong.
Eventhough Chinas current prices GDP is only at second position,
the GDP based on PPP valuation is overlapping USA. The current IMF
data also brings shocking news placing Indonesia at the ninth position
above United Kingdom in terms of GDP based on PPP valuation.
BRICThe global astonishment perishes the shrieking plea of countries
which are excluded because of Chinas economic performance. The
dragon has arisen and ready to pulverize the unprepared. A lot of
countries feel intimidated by the greatness of China.
The maneuver of Chinese businessmen is undeniable since they are
fully supported by the government.
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The term BRIC has been phenomenal. Surely, the world will not forget Jim ONeill although
he is no longer serving as Goldman Sachs. Therefore, when Jim ONeill mentioned about
MINT in 2003 as the next giants, the world paid a good attention. MINT is Mexico,
Indonesia, Nigeria and Turkey.
MINTThe advantages of each MINT countries are explained by ONeill as follows: Mexico is
fortunate to be geographically close to USA; Indonesia has the key position in Southeast
Asia as the centre of economic growth in the last couple of years as well as a direct
connectivity with China.
Mexico, Indonesia and Nigeria have strength in natural resources commodities. ONeill
thinks that in the last few years, Mexico and Nigeria had certain concern to reform their
energy market. Indonesia, recently, shares the same concern. In terms of GDP, Mexico and
Turkey reach a point of USD 10 thousand, while Indonesia is around USD 4 thousand and
Nigeria is around USD 1,500.
Compared to Brazil with the GDP of USD 11,300, Russia with the GDP of USD 14 thousand
and China with the GDP of 6,500, Turkey has the chance to have a rapid maneuver
because of its geographical advantages of being close to Europe which is relatively rich and
stable. However, it will be wasted away if Turkey cannot maintain its domestic stability.
Mexico and Nigeria also have the same risky political instability.
Indonesia, on the other hand, is considered to be stable in terms of political and economic
condition. As a country which just claims its place with a mature democracy, Indonesia has
a chance to shine brightly if it can improve the infrastructure condition and work ethic.
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VISTAAs the projections of certain economic condition in a country or region become vary,
the newly invented acronyms trigger people to observe certain study. VISTA (Vietnam,
Indonesia, South Africa, Turkey and Argentina) is one of the acronyms that is considered
to be solid aside from BRIC and MINT. As time goes by, Vietnam and South Africa carve
enormous achievement regarding their economy. Here are the overview and a projection of
VISTA:
Such analysis and projections are legit to support a study of the development of a country.
As a reader, those can enrich our data. For the same reason, other acronyms aside from
BRIC, MINT and VISTA that share similar characteristics of a group of countries such as G7,
G20, The Next Eleven, and APEC is worth to be discussed.
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Brand
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Strong brands have strategic roles to win over the market. The more extensive the market
is, a stronger position needs to be occupied. It is not an easy task. A settled brand is a
valuable asset for a company to succeed.
In terms of world trade context, settled brands are no longer dominated by developed
countries. Due to its variety of local brands, developing countries, especially Indonesia, are
started to be recognized.
Various brands from various industrial sectors start to benefit beyond their own profit.
From the customers point of view, the settled local brands have their own identity and
have been branded to differ from their competitors similar products. Thus, the consumers
loyalty can be earned. This is definetly an opportunity for the brand-holders to differentiate
their products and obtain a higher bargaining point.
Of all Indonesian global brands, some of them are often thought to be international brand,
while they are actually local-made. Here are some of the compilation of the national pride
brands:
POLYGONPT INSERA Sena has been producing bicycles under the name Polygon since 1989 in
Wadungasih Village, Buduran, Sidoarjo, East Java. Their business grows more than 20%
per year. Sixty percent (60%) of the Polygon bicycles are exported to Europe and the
other 40% are for local market. To strengthen its market, Polygon establishes distribution
centres in Muenchen, Germany; California, USA and in 30 places around Southeast Asia.
For the last 4 years, Polygon has been a frequent exhibitor in Eurobike. It is the world
biggest annual exhibition for bicycles manufacturers. Every year, this event attracts 1,280
participants, 45,200 businessmen from 111 countries and 1,883 journalists from 45
countries. this year, the exhibition will be held in Friedericshafen, Germany.
Indonesian Global Brand
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POLYTRONPolytron is an electronic brand established in May 16, 1975 in Kudus, Central Java under
the name of PT. Indonesia Electronic & Engineering. Later, in September 18, 1976, the
name was changed into PT. Hartono Istana Electronic. After being merged, the name was
changed into PT. Hartono Istana Teknologi. The company produces various products such
as television, radio, refrigerator, mobile phone and many others. Polytron has 70,000 m2
factory in Kudus and 130,000 m2 factory in Sayung, Semarang with 6,000 workers, 11
branches, 5 authorized dealers and 50 service centres throughout Indonesia. Given the
condition that electronic market is continuously growing, Polytron plays an important role
to support Indonesia to host its own country. In 2013, the electronic market increased
14% from IDR 16.2 trillion. The number reaches IDR 18.5 trillion throughout 2014.
EIGERPT. Eksonindo Multi Product owned by Ronny Lukito produces bags such as Eiger, Eksport,
Bodypack, Neosack, XTREME and Nordwand. The products which are manufactured in
Bandung, West Java have been sold not only for Indonesian market but also exported
to many countries such as Lebanon, Singapore, Philippine and Japan. Eiger, named after
a Eiger Mountain in Switzerland, was established in 1993. The bags are designed for
outdoor activities such as hiking, camping, climbing and many others. Started with only
two sewing machine, Eiger, now, employs 800 tailors in Soreang, Bandung. Every year, the
factory produces 2,500,000 bags with 8,000 different designs that are expected to rule the
market.
LEAAlthough the brand and logo of Lea resemble the flag of USA, it is actually made in
Indonesia. PT Lea Sanent, the manufacturer, was established in 1976. The factory is located
in Tangerang, Banten with 34 outlets around the country, 200 counters in department
stores and 100 local jeans stores. Every month, Lea produces 1 million pair of jeans.
Although it still focuses on domestic market, Lea has already had buyers from Dubai, Korea
and Hong Kong.
J.CO DONUTS & COFFEEJ.Co Donuts & Coffee was established in 2001 by Johnny Andrean who has been well
known for his 209 parlors business. Unsatisfied being the sole holder of Breadtalk Franchise
from Singapore, he established a business of original Indonesian donut. It takes only three
years for the business to grow with more than 40 outlets in Indonesia and around Asia:
Singapore, Malaysia, Philippine and China.
ESSENZAMany of us probably think that Essenza is a tile brand from Italy, while it is actually made
in Indonesia and exported to many countries, including Italy. Essenza is manufactured by
PT Intikeramik Alamasri Industri Tbk. which is located in Tangerang, Banten. The company
was established in 2003. In 2013, Indonesian tile industry has a capacity of 1.4 million m2/
day and produced 1.32 million m2/day. Eighty five percent (85%) of the total production
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is allocated for domestic market and the other 15% is exported. The sales figure of tile
industry reaches IDR 30 trillion and is projected to reach IDR 34 trillion in 2014. Currently,
there are 35 companies with 80 factories producing wall and floor tiles. Overall, the
industry absorbs 200,000 workers.
OLYMPIC GROUPOlympic Group is parent company of furniture manufacturer with knock-down features.
Olympic Group has 5 subsidiaries and holds some brands such as Olympic Furniture, Solid
Furniture, Albatros, Procella, Olympia and Jaliteng. The company, headquartered in Bogor,
West Java, has sold its products to more than 100 countries. At the beginning, Indonesian
furniture was only popular among Western European countries such as Greek, United
Kingdom, Spain and Netherland. Recently, the market expands to Eastern Europe, Asia and
South America. This year, its export values reach US$ 1.8 billion, compared to the previous
year which only reach US$ 1.78 billion. By the end of 2014, its export values are predicted
to reach US$ 2 billion.
RADIX GUITARRadix Guitar, a local guitar with international quality, was established by Toien Bernadhie.
Known for its quality, Radix guitars are sold in Sweden, Denmark, United Kingdom,
Greek, Switzerland, Canada, Australia, Singapore and Malaysia. Export values of musical
instruments plays a significant number in Indonesia. Based on the data from Directorate
General Export Development, Ministry of Trade, the number of its export reached US$ 489
million in 2013. The biggest exports came from electrical music instruments, followed by
pianos and keyboards.
ABC BATTERY In the middle of the invasion of foreign branded battery, ABC battery manages to rule
almost half of domestic market. This product, manufactured by PT International Chemical
Industry, has been exported to 50 countries under different brands, except in Australia
and some other countries which still use ABC or Alkaline brand. On its launching in 1980s,
ABC Alkaline has ruled 80% of the battery market in America, Europe and Japan. Based
on AC Nielsen data, ABC Alkaline rules 60.1% of the battery market in Indonesia. The rest
are taken by Duracell and Energizer. The success of leading the market owes to the wide
distribution networks and strategic communication skill.
SRITEXPT Sri Rejeki Isman (Sritex) is one of the biggest textile companies In Southeast Asia. Sritex
was established in 1966 in Solo by Muhammad Lukminto, who used to be a merchant in
Pasar Klewer, Solo, Central Java. Now, Sritex owns three weaving factories, nine spinning
factories, three printing presses and seven garment factories. Employing 16,000 workers,
Sritex supplies military apparels to 26 countries and to North Atlantic Treaty Organization
(NATO) countries as their official partners.
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GARBARATA AEROBRIDGEOne of the supporting facilities that we often use in an airport is the aerobridge or jetway.
The Garbarata facility built by PT BUKAKA Teknik Utama helps passengers to board
and disembark from aircraft. Almost all airports in ASEAN countries (even in Asia) use
Bukakas aerobridges. PT Bukaka has developed an innovation of the technology since
1980. Nowadays, the aerobridges are also used by seaports to make passengers more
comfortable and ensure their safety.
KEDAUNGKedaung International Group (KIG) leads a world-class glassware and tableware line. The
products have been sold to 150 countries placing it to be the biggest glassware factory in
the world. Half of the total production is exported to Asian countries, Middle East, Africa
and Australia with several branches in USA, Canada, Hong Kong, Australia and some other
countries and showrooms in Singapore and Malaysia.
TERRY PALMERTerry Palmer towels have been manufactured in Tangerang, Banten by PT Indah Jaya since
1962. Located in 40 hectares factory in Tangerang , PT Indah Jaya employs 5,000 workers.
Its export market is focused in Asia especially Singapore, Malaysia and Australia. In 2013,
Terry Palmer penetrated Chinas market and the outcomes were quite good. Before then,
Chinese towels flew into Indonesia. In terms of production capacity, the company can
produce 1,300 ton a month.
THE EXECUTIVEThe Executive (previously known as Executive 99) brand was established in 1974.
In 1985, the ownership was changed and in 2000, the brand was changed into The
Executive. The brand is also available in Malaysia, Singapore and some countries in
Southeast Asia.
PASEOPaseo is an Indonesian paper tissue manufacturer which exports international standardized
paper tissue to 65 countries in 6 continents. This company was established in 1997.
Made from a 100% virgin pulp without Optical Brightening Agent (OBA), Paseo has a
good reputation in the global market. It is also famous for its interesting packaging with
a animation design such as Hello Kitty, Doraemon and Looney Tunes. Paseo has a bright
future since it is categorized as a pulp and paper industry. Nowadays, only some countries
have the ability and opportunity to develop pulp and paper industry in the world. The
possible competitors are probably coming from Latin America countries. The world paper
demand has reached 349 million ton and it is predicted to reach 490 million ton in 2020.
Based on data from Indonesia Pulp and Paper Association, installed capacity for pulp
industry is 7.9 million ton a year and 12.98 million ton per year for paper industry.
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EDWARD FORREREdward Forrer, Indonesian bag and footwear manufacturer, was named after its founder,
Edward Forrer or Edo. Beginning with producing shoes in 1989 in Bandung, now Edward
Forrer owns more than 50 outlets in Indonesia, Australia, Malaysia and Hawaii. The head
office is located on Jalan Veteran 44, Bandung, West Java. The company and other local
footwear manufacturer have contributed to the domestic revenue. Now, Indonesia has
managed to supply 3% of footwear demands in the world. In 2013, the export number of
the industry reached US$ 3.86 billion compared to that in 2012 which only reached US$
3.6 billion. Beside the high export values, the last five years, the surplus of industrial export
reaches US$ 2 billion.
SILVER QUEEN PT Petra Foods is the manufacturer of chocolate snacks such as Silver Queen, Chunky Bar
and Ceres. In global market, this company competes with M&Ms, American chocolate
manufacturer. The company is managed to export its products to 17 countries such as
Thailand, Japan, Philippine, Hong Kong, Australia and China. In the future, Petra Foods and
similar local manufacturer will have a brighter chance considering that Indonesias target to
be the largest cacao grinding producer in the world by 2015 with the production capacity
of 600 thousand ton per year. The growth of the cacao industry cannot be separated from
governments role. One of the government supports is by imposing an export duty of cacao
seed in 2010. In 2013, cacao contributed US$ 1.1 billion to the national revenue.
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SOPHIE MARTINSophie Martin was established by a French couple, Bruno Hasson and Sophie Martin.
They had an idea to build the fashion business with the brand Sophie Martin when they
were posted in Indonesia. Starting with producing bags, Sophie Martin MLM network has
gathered more than 1 million members and 250 business centres spreading from Aceh and
Papua since its launching in 1995.
MASPIONThe company has a strong expertise in marketing and manufacturing a various qualified
household products such as kitchen appliances, glassware and home electricity including
PVC and PE pipes. Maspion a settled and wide distribution network both domestically and
internationally through its distributors, agents, retailers and representative offices in big
cities in Indonesia and other developing countries. Maspion is derived from M = Mengajak
(asking), A = Anda (you), S = selalu (always), P = percaya (trust), I = industri (industry), O =
olahan (products), N = nasional (national) or asking you to always trust national products.
The company employs 13,000 people and utilizes production facilities in four industrial
estates in Sidoarjo and Gresik, East Java and one factory in Jakarta and West Java. It will
also expand to Kendal, Central Java very soon.
HOKA HOKA BENTOAlthough Hoka Hoka Bento (Hokben) serves Japanese food, the fastfood restaurant, which
was firstly opened in Kebon Kacang Jakarta, is originated in Indonesia. PT Eka Bogainti
owns Hokben with 147 outlets from Java to Bali. Culinary industry has a strategic role in
contributing domestic revenues and supporting national tourism sector. According to the
data of Ministry of Tourism and Creative Industry, culinary tourism contributed 25% to the
economy in some countries such as USA and Canada. In Indonesia, the sector contributed
IDR 209 trillion to Gross Domestic Regional Product (PDRB) according to the data of 2013.
GT RADIALThis Southeast Asias giant tire company has gone international. PT Gajah Tunggal Tbk.
through GT Radial has exported more than 110 million tires to more than 90 countries
around the world. To sell its products, Gajah Tunggal establishes 76 distributors in 76
countries. In the future, tire industry has a promising aspect with the rapid growth of
motor vehicle industries every year. According to the data of Ministry of Industry of the
Republic of Indonesia, the growth of tire industry has reached 8% considering it to be
one of the backbones to compete in global market. Every year, the growth of the industry
reaches 7 8 percent. Hopefully, the tire industry investment can boost Indonesias
economic growth. Today, there are 13 national tire manufacturers that can produce 75
million tire of a various type and size of tire for passenger car, truck, bus and heavy duty
vehicle and 55 million tires for motorcycles. In 2014, the industry is slightly declining. PT
Gajah Tunggal Tbk. is the only company having the increase on its sales throughout first
quarter in 2014. It is recorded that the company sales increase to 5.3% from IDR 3.04
trillion to IDR 3.2 trillion.
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AlfaLinkAlfalink, electronic language dictionary device, is considered to be an innovative product
made by Indonesian. It was invented by Shian Yu. Now, he has representative offices in
Singapore, Kuala Lumpur, Hong Kong, Taiwan and Los Angeles.
THE SAKThe Sak is a branded bag made by Delia Murwihartini. She promotes her products through
international exhibitions and uses local contents. Sweden is her first export destination. To
penetrate the USA market, Delia patents her bags under the name The Sak with the help
of her USA partner. Now, The Sak is sold in Fifth Avenue, New York.
PT PALKargo Star 50 is a flagship product from PT PAL, a well-known ship manufacturer. This
giant ship of box shape bulk carrier (double hull) has a weight of 50,000 dead weight
tonnage (DWT). Kargo Star 50 has been sold to German, Hong Kong and Turkey. After
manufacturing Fast Missile Ship for Indonesia, PT PAL will also manufacture Landing
Platform Deck (LPD) ships for Philippines military. Myanmar and Turkey are also interested
to purchase the ships from PT PAL. PT PAL Indonesia, now, manufactures trading, cargo,
passengers, chemical tank and oil tank ships, including fast missile ship and box shape bulk
carrier ship. PT PAL is also planning to build submarines. Other than that, PT PAL Indonesia
also manufactures a US$ 43 million worth of EPCI Gas Compressor.
QUICK TRACTORCV. KARYA HIDUP SENTOSA manufactures agricultural appliances such as power tiller
and power thresher under the brand QUICK. Power tiller, especially the type of GT 1000
Boxer, has been used in Namibia and exported to Fiji, Dominican Republic and Timor Leste.
The agricultural appliances industry used to be plunged due to the invasion of imported
products. But with the implementation of Indonesian National Standardization (INS/SNI)
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which is compulsory for all agricultural appliances products, the condition changes. As
a result, according to the data of Ministry of Industry, the demand of tractor machine
reaches 200,000 units per year and the industry manages to fulfill 140,000 units.
EQUILEquil is a mineral water purely made in Indonesia under PT Equilindo Lestari owned by
Morgen Sutanto. Equil is produced in Vila DEquilibrium, an Equils packaging factory,
located in the foot of Gunung Salak, Sukabumi, West Java. Morgen started his business
in 1997 due to his concern to the fact that the packaged beverage industry was ruled
by foreign investors, contrary to the fact that Indonesia has abundant qualified water
resource. Due to his hard works, Equil is now available in luxurious restaurant, five star
hotels and important meeting of government officials.
This year, the Indonesia Association of Packaged Beverage (Aspadin), sets a target of 23.9
billion liters or 11% raise of beverage production from 20.3 billion liters in 2013. According
to the data of Aspadin, the production of beverage in Semester I has reached 11.65
billion liters or risen 11% from the same period last year. The highest production value is
on March and April with a rise of 2.1 billion liters each year, only to fall down again to 2
billion liters on June and 1.75 billion liters on July.
COFFEEKopi Luwak is a steeping coffee using coffee bean taken from luwak/palm civets remaining
dirt. The bean is believed to have a unique taste after being eaten and taken out through
luwaks digestion system. The bean is the most expensive in the world.
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Steve Jobs
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WORLD-CLASSBRANDS
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Based on the surveys of Best Global Brands and Interbrand, Apple and Google are the
most expensive brands in the world. Both of them are valued more than US$ 100 billion or
equaled to IDR 1,200 trillion. For two years in a row, Apple outperformed Google as the
most expensive brand in the world. The titles are rewarded to them by Interbrand under
three main criterions.
The assessments are based on the performance of the brands, how they influence
customers choices and whether the products can raise their own prices.
Worth US$ 118.9 billion, Apple raises its companys value to 21% than last year, while
Google, a US$ 107.43 billion worth, rises 15% than 2013.
Meanwhile, Facebook is also one of the brands with a stand out value in this years list. Last
year, Facebook grew with more than 1.32 billion active users rising 14% from the previous
year. In the meantime, Huawei, a Chinese brand, represented the first Chinese company in
the rank.
Global BrandApple Inc. is a multinational brand located in Sillicon Valley, Cupertino, California which
design, develop and sell consumers electronic appliances, computer software and
notebook. Apple Inc. was established on April 1, 1976 and being incorporated into Apple
Computer Inc. on January 3, 1977. After the launching of iPhone, the word computer
was omitted on January 9, 2007 to show Apples focus towards consumers electronic
sector.
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Apple is well-known for its line of software products such as OS X and iOS operating
system, iTunes music player and also Safari website and its hardware such as iMac desk
computer, MacBook Pro laptop, iPod music player, and also iPhone mobile phone.
Before establishing Apple, Steve Wozniak was an electronic hacker. In 1975, he worked in
Hewlett-Packard and helped his friend, Steve Jobs to design a video game for Atari. Those
two icons settled a foundation for Apple to be a world-class company until now.
GOOGLE INCIn the gadget proliferated time like today, Google is like a walking dictionary to find
information. This USAs multinational company focuses its business on internet products
and services such as searching engine technology, computer web, software and online
advertisement.
Google was established by Larry Page and Sergey Brin on September 4, 1998 when they
were still PhD students at Stanford University. Googles mission is to gather information
around the world and make it accessible as well as useful for everybody. In 2006,
Googles headquarter was moved to Mountain View, California.
The idea of the name Google came from Googol (numeral 1 with a hundred of zero
number behind it). They thought that that huge number might equal to the amount of
information that Google could provide.
MERCEDES BENZMercedes Benz is an automotive company from German which manufactures various
vehicles such as cars, trucks and bus. As a brand, Mercedes Benz becomes the most
famous and oldest car company in the world until now. The key of its success lays on the
developed and innovative technology with a high safety level.
The idea of Mercedes-Benz came up when Karl Benz invented the first oil-fueled car in the
world which was being patented in January 1886. Mercedes cars were sold for the first
time in 1901 by Daimler Motoren Gessellschaft. The first car using the brand Mercedes
Benz was made in 1926 after Benz Company and Daimler merged into Daimler-Benz
Company.
The interesting part is that Indonesia played an important part in the history of Mercedes-
Benz. There are only 3 countries outside Europe which manufactures GL 500 type of
Mercedes-Benz; India, Indonesia and USA. Mercedes-Benz GL 500 is manufactured in
Wanaherang, Bogor, West Java to fulfill domestic demands.
The reason why Indonesia is chosen to assemble some types of Mercedes-Benz is because
the domestic market is very promising. Other than that, the quality of oil fuel in Indonesia
is good. It becomes one of the considerations because the fuel plays important role in the
quality of the cars. Some of the Mercedes Benz types that are assembled in Indonesia are
ML 400, GL 400, GL 500, E 400 MG and S 400 L Exclusive.
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IKEAIKEA is a Sweden home-furnished retailer. It was established by Ingvar Kamprad in 1943
when he was 17 years old and now he has become one of the richest people in the world.
IKEA is derived from Ingvar, Kamprad, Elmtaryd (his birth place) and Agunnaryd (the village
he lives in).
At the beginning, IKEA sold various things such as pens, wallets, frames and even
wristwatch. The furniture made it to the list in 1947 and then IKEA started to design the
furniture in 1955.
At first, IKEA only went online and then the first flagship store was opened in Almhult and
continued to be the model store. On March 23, 1963, the first IKEA store outside Sweden
was opened in Asker, near Oslo, Norway.
In winter 2004, there were 202 IKEA stores in 32 countries around the world with another
20 more opened in 2005. On October 15, 2014 Hero Supermarket, the sole holder of IKEA
franchise in Indonesia, opened its first store at Alam Sutera, Tangerang, Banten.
One of IKEA commitments when entering Indonesian market was to work with local
furniture partner in Solo and Yogyakarta. Those local products will be sold to global
market.
McDonaldThe most famous brand in the fast-food business until today is McDonalds. People easily
recognize it by its two yellow bows sign that resemble an M alphabet.
Beginning with the first restaurant in 1940 by two brothers, Dick and Mac McDonald, a
series of fast-food restaurants were established serving an authentic set of menu such as
hamburgers, soft-drinks, french fries, chicken fillet and some other local foods based on
the location of each restaurant.
They introduced speedee Service System in 1948, which then became the basic
principle in the modern fast-food restaurants nowadays. It is hard to imagine that in 1940
before the World War, with the age of more than half centuries and its global network,
McDonalds was just an ordinary barbecue restaurant named McDonalds Bar-B-Que at 14th
and E Street, San Bernardino, California State, USA. Its menu is various and it enables the
cars to drive into the parking lot and buy the foods without having to leave the car.
In 1948, McDonalds changed it form into a drive-in restaurant with a simplified menu of
9 items which were hamburgers, cheeseburgers, soft-drinks, milk, coffee, potato chips
and a slice of pie. McDonalds specialty, at that time, was its 15 cents hamburgers. A year
later, they changed the menu from potato chips to french fries and introduced triple thick
milkshakes to the public.
In 1954, a man named Ray Kroc visited McDonalds office intending to sell some multi-
mixers to McDonald brothers, but then, he was interested in working with them after
finding out that the brothers were looking for a franchise agent for USA region. Kroc had a
feeling that he needed to seize the opportunity.
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A year after that (1955), Kroc opened his first McDonalds store in Des Plaines, Illinois
on April 15, 1955 (which later is celebrated as McDonalds anniversary). On the first day,
McDonalds sales reached US$ 316.12. A decade later, 700 McDonald restaurants were
established around USA.
On its silver anniversary, McDonalds was even more successful with the opening of its
6,000th restaurant in Munich, Germany. In 1983, McDonald restaurants were opened in
32 countries around the world. With the heavy utilization of internet, McDonald finally
launched its website named McDonalds.com in 1996. In 2001, a new menu, Big N tasty,
was introduced to the customers. In 2003, the famous tagline Im Lovin It was globally
launched in Munich, Germany.
McDonalds proves that aggressiveness is important in the business. Ray Krocs existence in
the business played important part in its history; from just a small restaurant to hundreds
of them around the world. Seeing the wide coverage of McDonalds business expansion,
it is not surprising that the brand is considered to be the icon of modern globalization and
American lifestyle and cultural agent to the world.
SAP AGSAP AG is the biggest software company from German in Europe. SAP was established in
1972 in Mannheim, Germany under the name Systemanalise und Programmentwicklung
by 5 IBMs ex-employees. Its headquarter is located in Walldorf, Germany. The company
which employed 35,873 workers in 2005 also rapidly grows in Indonesia.
SAP Business Suite powered by SAP HANA has become one of the fastest growing
software applications in SAPs history. This software helped many companies of various
sectors to run a real-time business process that enabled them to simulate, plan, run,
analyze and predict their crucial and end-to-end business process.
SAP Business Suite
powered by SAP HANA
is a base for business
innovation to help companies
running their rapid transformation
into real-time companies. Those
companies lead their own industries
by redefining their business process and
implementing what they think to be the impossible
business models.
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Success Story
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Success Story
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CigadingHabeam
Heru Pramono President Director
PT Cigading Habeam
Triggered by a strong vision to be a leading manufacturer of steel and steel structure
industry in Indonesia, PT Cigading Habeam Centre (CHC) has shown a rapid and stable
growth every year since its establishment in 1983. A lot of big projects have been
accomplished by CHC: bridges, airport terminals, industrial facilities and special products
such as conventional Pumping Unit for Rig platform and Single Transmission pole.
CHC believes that they are able to develop a long-term factory by utilizing their expertise
and being supported by complete facilities and special attention to each products quality.
They offer efficient products and a qualified system with reliable technology.
Established on November 10, 1983, CHC which is located at Krakatau Industrial Estate,
Cilegon, Banten manufactures H-Beam steel with various combinations of steel based on
JIS, ASTM, BS, DIN, etc. CHC also manufactures welded H-Beam with various section sizes
to obtain economical and optimum design. CHC also provides shot blast and prime coating
facilities to protect the steel from corrosion.
CHC is also equipped with laboratories that can be used for various steel tests including
H-Beam. From the laboratorys result, it is shown that the welded part gets stronger and
the monolith (single pole) with optimum quality can be obtained. The computerized and
integrated management system ensures the accuracy and speed on the implementation of
planning, controlling, data processing functions, etc.
Since its launching on November 1985 by President Soeharto, Cigading has manufactured
more than 11 million welded H-Beam with various sizes for various purposes. CHC
products have been used to build skyscrapers, offices, bridges, warehouses, crane girders
and many more around Indonesia.
1.Construction IronWith fabricated capacity of 1,500 metric ton per month.
2.Manufacture DivisionA.Built-up Beam or H-Beam Section
We are the leader in built-up beams with an output capacity of 5,000 metric tons per
month. We operate with 7 fully automated lines for sections ranging from H200 mm up to
2,800mm of unlimited thickness.
B.Single Pole Transmission
As an alternative for concrete pole and/or steel pipe pole, CHC manufactures an octagon-
shape pole, a single electricity transmission pole from various designs and dimensions
according to the purpose.
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Habeam
3.Service DivisionA.Coil Centre
CHC Coil Service Centre serves to cut, recoil and shear from roll to plate with 20,000
metric ton outputs per month. CHCs main client is PT Krakatau Steel and other factories
that need steel plate.
B.Shot Blast and Painting
For shot blasting, CHC uses the sophisticated S360 and G18.
HUMAN RESOURCES
Human resources are important assets for CHC. In order to improve the quality of its
workers, CHC periodically conducts training programs. The workers safety and healthcare
are their main concerns. CHCs commitment is to apply a tight policy to minimize working
accidents in their office, factories and project sites. CHC employs 442 workers.
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FACTORY AREA
1.OPEN SPACE AREA : 28,860 M2
2.INDOOR AREA :
2.1 Production : 22,350 M2
2.2 H-Beam : 14,580 M2
2.3 Shotblasting & painting : 4,140 M2
2.4 COIL CENTER : 8,700 M2
2.5 ELECTRIC POLE : 2,175 M2
2.6 RECOIL : 4,350 M2
2.7 LINES : 2,175 M2
TOTAL AREA : 87,330 M2
The more growing demand of steel bridges in Indonesia urges CHC to focus on the efforts
to improve the bridge quality based on its production abilities. Due to the fact that it is
a promising prospect, CHC recently introduced a new brand: CHC Bridge Indonesia on
October 10, 2012 which also became the anniversary of its first delivery of double track
railway bridge made by CHC for Northern Part Ganda Jawa project.
CHC started to run the manufacturing business since its first establishment and continued
to penetrate the market all over Indonesia. The projects were followed by the invention of
superior type bridges with various designs such as girder-bridge, truss-bridge, girder-block
bridges, moving-bridges and arch-bridge. Some of the popular bridges in Indonesia such
as Pawan-V bridge, Tanah Grogot bridge and Anggana bridge in Kalimantan are made by
CHC.
The new high-voltage electricity transmission (SUTET) located in East Jakarta Canal (BKT) is
the new innovation. The two single-pole tower was the first tower used to distribute high
voltage electricity in Indonesia. With the diameter of 3 meters, each pole consists of three
segments joined together to form a 72.5 meters pole.
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This 500KV high voltage SUTET is located at Jalan Kolonel Soegiono, Bambu Duri, Duren
Sawit Timur, Jakarta. Steel poles number 30A and 30B bear 500 KV of high voltage
transmission cable to distribute to Bekasi Cawang Muara Tawar Cawang Line.
Indonesian Record Museum (MURI) records PT CIGADING HABEAM CENTRE success
placing it to be the first steel mill to produce the biggest pole and the highest steel tower
in Indonesia.
Marine Industry
Caputra Group has pursued the biggest dream in marine industry since the business started
in 1971. Supported by a good management, the business develops and diversifies from a
bridge to dry dock and marine tourism.
We see Indonesia as a maritime country which needs a lot of infrastructures. That is why
we try to do something for this country said Heru Pramono, founder of Caputra Group
and director of Cigading Habeam Centre (CHC).
To help developing the marine industry in Indonesia, CHC works together with other
companies under Caputra Group such as Caputra Mitra Sejati, Batavia Marina, Quicksilver
Day Cruises and Odyssey Submarine Bali.
With the skill in ship design and maritime architecture, Caputra Mitra Sejati is aimed to
expand to other sectors including oil and gas sector. The company has manufactured many
ships for China National Offshore Oil Corporation and PetroChina and barges for Total E &
P Indonesia. Those ships are certified by Lloyd Register.
Caputra Mitra Sejati also builds catamaran for Quicksilver Day Cruises along with Odyssey
Submarine Bali and Batavia Kelautan, Quicksilver Day Cruises. Those achievements show
a different side of Caputra Group passion to build ships and marine tourism. By building
Marina, we can show the world that we can be proud to be a maritime country.
By building Marina, we can show the world that we can be proud to be a maritime country
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Josef Winter
1855Siemenss activities in Indonesia could be traced from 1855 when the company installed
10 telegraph systems in Indonesia for the first time for Dutch Colonial Ministry. Siemens
opened its first office in Surabaya, East Java in 1909. Since the beginning of Indonesias
development, Siemens has been a key partner by taking part in Javas electrification and
providing a system to light up the Sultans palace in Yogyakarta. Today, the company is still
the main investor and player in the technical sector such as electronical, biomedical and
manufactures technology in Indonesia.
Siemens Indonesia offers a various solutions and services through its divisions: Power &
Gas, Power Services Generation; Energy Management; Building Technologies; Mobility;
Digital Fabrication; Industrial and Mobility Process; and Healthcare. Siemens employs 1,800
workers in Indonesia.
Siemens has played an integral part in the development of Indonesian technology and
economy for more than 150 years. In the last 20 years, Siemens investment reached 200
million euro from its expansion and modernization of production capacity and also human
resources development.
Siemens manufactured power plant components in Cilegon, Banten and low and medium
voltage switchgear in Pulomas, Jakarta and also develop a hearing-aid in Batam. Siemens
factories are well-known as the manufacturers of high qualified products not only for
domestic market but also global market. Siemens preserves its commitment to always
improve their technology and human resources.
In 2014, Siemens celebrated its 25th Siemens Cilegon Factory anniversary. At the
beginning, it was built in 1989 as a fixing and maintenance place for steam and gas
turbines. For years, Siemens has invested in technology development proven by its
competitive position in the market. The Cilegon factory kept developing from a fabricated
steel facility to big scaled condenser manufacturer for power plant and turbine assembler.
Siemens turbines have produced more than 5,000 MW in Indonesia. Siemens was also
involved in the modernization of railway network in Java.
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Siemens and InfrastructureSiemens works together with Cikarang Listrindo (the biggest independent electricity
provider in Indonesia) using Siemens Steam Turbine technology. In order to improve the
electricity performance in Sumatera Islands, National Electricity Company (PT PLN Persero)
works together with Siemens to build 275-KV main station in Padang Sidempuan and
Payakumbuh, Sumatera.
Siemens Remote Services (SRS) develops a diagnostic remote system to sustain an optimum
system with high productivity and lower operational cost. The system has been applied in
more than 100 appliances in some national hospitals, including Siloam hospitals, Ramsey
International hospitals and Gatot Soebroto hospital.
In cement industry, Siemens get projects to upgrade a process controlling system of PT
Indocement Tunggal Prakarsa.
160 YearsIn its 160 years presence in Indonesia, Siemens is committed to be one of loyal investors
and will always be there for Indonesia. Siemens is also committed to maintain a high
standard, work ethic and integrity in order to face challenges ahead.
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Infrast ructure
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Infrast ructure
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6,000TRILLION RUPIAHS
Presidential Working Unit on Overseeing & Controlling Development
(UKP4) evaluated that many of Public Private Partnership projects were
unsuccesfull.
I can say that there are few PPP projects succeded due to our
governments work ethic which has not been adjusted with the needs
to a well-implemented PPP, said Kuntoro Mangkusubroto, head of
UKP4in Jakarta, Tuesday (7/10/2014).
Some of the challenges faced by PPP are not just the legal certainty problem. Kuntoro also
mentioned about land issues, a main obstacle of the projects, and also the fact that the
process of decision making was often clashed between DPRD and Regional Government.
Kuntoro did not mention specific projects, but he stated that there was only one successful
project out of five. Whereas, the PPP scheme can be a good alternative to support projects
fund.
He estimated that Joko Widodos government with its target of 7percents economic
growth would need IDR 6,000 trillion infrastructure investment for the next 5 years, which
would be impossible to be solely funded by the country.
UKP4 calculated that at least 50% from the budget need obtained from private sectors
under PPP scheme. Kuntoro affirmed that Government held the key to ensure the PPP
projects to be implemented.
I can say that there
are few PPP projects
succeded due to our
governments work ethic
which has not been
adjusted with the needs to
a well-implemented PPP
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It is a matter of remodelling PPP and making it more effective and also the coordination,
preparation and decision-making, said Kuntoro. The PPP scheme of partnership is a legal
model to build infrastructure projects in Indonesia. The scheme needs to be encouraged by
the government. The scheme has been running in a while, but there is still a loophole to be
fixed.
As a complex organization mandated to fulfill citizens needs, governments agenda to do
its duty and function is being demanded to be real in the field. It takes a lot of resources
in the partnerships management because the scale and complexity of the governments
programs are a lot bigger that private sector.
Different interest is one of the problems in implementing PPP scheme. In the same time,
the private and public sector are demanded to work together to overcome the challenges
emerging from the different interest. Public sector tries to minimize the whole budget and
ensures a high qualified service, while private sector tries to maximize the profits.
Kuntoro Mangkusubroto affirmed that if PPP was not well-managed, the different interest
would trigger a big problem just like what happened in Latin America. Using the same
legal scheme like PPP, the allocated public budget got even swollen because a lot of PPP
schemed projects were renegotiated. In United Kingdom, the PPP initiative was harshly
criticized since it was failed to provide the value that equaled to the budget being flown
into it. Kuntoro said in Jakarta, the (PPP) scheme needs to be well-strengthened and well-
managed.
Kuntoro continued that the main problem on the implementation was the weak
collaboration inter-institution inside PPP. The issue needs to be fixed through the
development of partnership between government institution in both local-central or inter-
regional government. He said to the potential partner in private sector, government needs
to change paradigm and start to realize that the partnership is a scheme worth to develop,
market and sell to the potential partner in private sector.
Deputy for Infrastructure of Coordinating Ministry for Economy, Luky Eko Wuryanto
admitted that there is a lot of gaps between publics expectation and governments
realization. To cover them, PPP is expected to play a role especially in terms of accessing
fund resource and expertise of big-scaled facilities. There is still a lot of gaps between
publics expectations (towards facilities development) with what government has been
working on.
In PPP scheme, private sectors also need to play roles to develop, control and operate
facility projects under the governments regulation and supervision. Through an effective
management, PPP will create a strong discipline in the overall process beginning from
choosing, preparing, funding, constructing to operating the projects.
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ALL FORINFRASTRUCTURE
The soaring name of Indonesia
in 2004 was unfortunately
owing to the national tragedy of
earthquake followed by tsunami
in Sumatera Island. Thousands
of people died and went
missing. The world was stunned
and moved.
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It did not take a long time for the help
from many countries to flow into Indonesia.
The damages caused forced Indonesia
to develop infrastucture programs and
projects. And then the term Infrastructure
Summit came up which was always
related with the generated product of
the 2004 Aceh Tragedy until now.
SMI, IIF and PIIIn order to reach the acceleration of
national infrastructure development, the
government works as hard as possible.
All study has been done including the
infrastructure funding which is considered
to be the main obstacle.
In a publics point of view, infrastructure
projects is often described as: expensive,
capital intensive, controversial and prone
to fluctuation (related to land acquisition).
And the most important thing is that
using a formula of business theory is very
inappropriate to conduct in infrastructure
projects.
This logic intrigued the government to
establish various institutions, entities or
even companies to have special duties
regarding the improvement of national
infrastructure. In 2009, PT Sarana Multi
Infrastruktur (SMI) was established.
It has been 5 years since the establishment
and the company has reached capital
revenues of almost IDR 4 trillion from the
government. According to the accounting
report, it has been utilized to fund the
infrastructures project by December 31,
2013. It means that the it has been fully
absorbed. Since there would not be any
additional fund from the government
through government capital inclusion
(PMN), SMI was obligated to find its own
resource of fund.
For the downward leveraging, SMI invested
in its subsidiary, PT Indonesia Infrastructure
Finance (IIF) as a part of government
strategy to expedite funding flow. By
investing to the subsidiary, IIF is expected to
attract equity partner.
Bankings Role In InfrastructureBanking sectors tend to choose senior loans
while SMI products are larger than that
covering senior loan, mezzanine, junior loan
or even equity. Banking sectors cannot fit
into infrastructur funding given the possible
situation where a spesific regulation
applied to certain cases. This is when an
institution like SMI is needed for a financial
close, usually through a club-deal scheme.
Another form of partnership with banking
sectors is project financing. The procedure
is to wait for SMI to bid on a project and
then when the project is being constructed
and operated, the contractor starts to do
the refinancing step through banks.
After the establishment of SMI and IIF, the
government established PT Penjaminan
Infrastruktur Indonesia (Persero) or PII. The
company was established in response to
the need of insurance to the political risk
attached to infrastructure investment. By
giving the collateral, private sectors are
expected to play along in the development
of infrastructure especially through PPP
scheme.
PII was established on December 30,
2009 as one of governments efforts to
support the acceleration of infrastructure
development in Indonesia through an
accountable, transparent and credible
process of collateral provision. Moreover,
the establishment of PII is also expected
to attract private sectors to fund the
infrastructure sector through the
improvement of PPP credit-worthiness
which resulted on the decreasing cost of
fund of the infrastructure projects.
The Objectives of PIIs Establishment:
Toincreasecredit-worthinessonPPP
infrastructure projects by granting
collateral on infrastructure risks.
Toimprovethemanagementprocess
to be more transparent on giving a
collateral for the risk of infrastructur
projects which is related to the
governments act or absence of act.
Tofacilitatethesuccessoftransaction
for PJPK (Ministries, State-owned
Companies, Regional Government)
through collateral provision for a well-
structured PPP Projects.
Tosetaring-fenceofgovernments
contingency obligation and minimize a
sudden shock towards National Budget.
PII acts as insurer for private sectors to
deal with the risk that might occur due to
governments acts such as license process
delay, licensing, changes in regulations, the
absence of tarrif adjustment, the failure of
integrated network/facility and other risks
allocated or beared in PPP contract.
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SMELTERTHE ICON OF NATIONAL INVESTMENT
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After the enactment of Mineral and Coal Laws in 2009, the
term SMELTER became very familiar among national business
people. To build a smelter is a must requirement for business
people if they want to invest in mining sector in Indonesia. The
abundant mineral resources needs to be protected and utilized
for the nations greater interest which is to build a prosperous
community around the mining site as well as contribute revenues
for the country from its tax.
Hundreds of national and multinational companies altogether filed for proposals to get
exploitation and management license of mineral resources all over Indonesia. The fact that
to build a smelter needs at least IDR 60 trillion capital, the business requires a big player.
PT Aneka Tambang Tbk. (Indonesia), Mitsubishi Corporation (Japan) and Eramet Group
(France) establish a joint venture company under the name PT Weda Bay Nikel located in
Halmahera-Maluku. The accumulated value of the mine reaches US$ 5 billion or equals to
IDR 60,000 trillion (kurs IDR 12,000/US$).
SmelterThe message of building smelter is to elevate an added value meaning that the value is
being elevated through processing and/or refining activities in order to provide economical,
social and cultural benefits. Added Value is minerals value which increases as a result of
processing and/or refining process.
The processes are done based on the following considerations:
a. To have a big number of resources and Ores reserves;
b. To boost the production capacity of metal production in the country;
c. The processing and/or refining technology is already tested;
d. The end products of the process are used as industrial raw materials for domestic
market;
e. The remaining products of the process are used as raw materials for domestic
chemical and fertilizer industry;
f. As raw materials for mineral-based strategic industry in the country;
g. To give multiplier effects for the country both economically, socially and culturally;
h. To increase nationals revenues.
The huge amount of money allocated to build smelter requires the involvement of may
institutions. A good coordination between central and local government has to be
improved. The fact that the companies which file for a smelter proposal tend to increase
despite its challenges shows that Indonesian resources potentials are still attractive.
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48 INVEST
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49INVEST
MILLION OF SKILLED WORKERS IN MINING SECTORIn terms of the utilization of mineral
resources in Indonesia, we are still lack
in tecnology. Some of mineral products
were exported in a form of ores such as
nickel, bauxite and concentrate and also
copper. Nickel, bauxite and Copper will be
discussed more in this article because they
are the main minerals which smelters are
started to be developed.
The model of the study is based on
Harmonized Commodity Description and
Coding System or Harmonized System (HS).
HS Code, often used in the trace of rules
of origin, is an international standard or
naming and coding system used to classify
trade products or its derivatives owned by
World Customs Organization (WCO).
CopperCopper resources in Indonesia reaches
4,925 million ton ore. PT Smelting is
the only company processing copper
consentrate into copper catode. The
company is located in Gresik, East Java with
total capacity of 300,000 ton per year.
Copper products are divided into
unwrought copper, copper bar, copper
sheet and other copper forms. Copper
concentrates are exported to three big
countries; Japan, South Korea and India.
NickelIndonesian nickel resources are estimated
to reach 2,633 million ton ore with 577
million ton ore reserves located in Sulawesi,
Kalimantan, Maluku and Papua with
nickel substance of 1.45% ton each. The
commodities are grouped into three: nickel
ores, ferronickel and rough nickel which
almost all of them are used to fulfill export
demands.
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50 INVEST
BauxiteIndonesian bauxite resources are estimated
to reach 349.61 million ton ores and
134.65 million ton metal with 97.40million
ton reserved ores and 34.88 million ton
reserved metal. The content of AI203 of
each is aroun 27 55 percent. Indonesia
exports bauxite to China, Japan, Taiwan
and Venezuela.
The Importance Of SmelterIn general, the results of the study indicated
that the potential value-added mineral
ores and concentrated should be able to
be processed inside the country. Added
Value can be calculated from the margin
between import values of raw materials
and export values of ores and concentrates.
The increase of added value derived from
mineral products processed in Indonesia
will certainly increase state revenues from
income tax, export tax, local government
retribution and many others. A more
employment opportunities of approximately
2,402,600 people will also resulted from
the process. It does not include workforce
absorption in the downstream industry
and the multiplier effects resulted from
upstream mineral industrial processing in
Indonesia.
As mandated by Chapter 103 and 170 Laws
Number 4/2009 on Minerals and Coal, the
holders of IUP and Contract of Work are
required to increase the value of minerals
through smelting and refining process in
Indonesia.
To follow up the mandate, particularly in
terms of processing and refining minerals,
the government issued Government
Regulation No. 1/2014 on Second Revision
of Government Regulation No. 23/2010 on
Minerals and Coal Mining Enterprises on
January 11, 2014.
Government Regulation No.1/2014 has
been followed up by the issuance of:
a. Mining and Natural Resources
Ministerial Decree No. 1/2014 on
Increasing Added Value of Minerals
through Processing and Smelting in
Indonesia;
b. Trade Ministerial Decree No. 4/2014 on
Export of Processed and Refined Mining
Products;
c. Finance Ministerial Decree No.6/2014
on Second Amendment of Ministerial
Decree No.75/2912 on Classifications of
Export Commodities to be subjected to
Export Tariff and Export Duty.
1. Starting on January 12, 2014, exporting
raw materials/ores abroad is prohibited.
2. Holders of mining contracts are
required to refine minerals in Indonesia.
3. IUP holders are obligated to conduct
processing and refining activities in
Indonesia.
4. Holders of Contract of Work operating
mineral mining and conducting refining
activities may export non ore/raw
materials in limited quantity.
5. Holders of IUP for Production
Operations for metal minerals which
conduct refining operations may export
the products in limited quantity.
6. Further procedures for processing and
refining operations and also the limit
of refined quantity will be regulated by
Ministerial Decree.
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51INVEST
PROGRESS OF CONSTRUCTION OF PROCESSING
AND REFGINING FACILIES
NO
1.
2.
3.
4.
5.
6.
PROGRESS (%)
0 5
6 10
11 - 30
31-50
51-80
81-100
ACHIEVEMENT
Feasibility Study
AMDAL
Initial Plant Construction
Progress
Progress in Achieving
mid-term Construction
Progress
Progress in Achieving
Final Stage of
Construction
Commissioning/
Production
TOTAL IUP
112
16
15
10
0
25
NO
1.
2.
3.
4.
5.
6.
7.
COMMODITY
Nickel
Bauxite
Iron
Manganese
Zircon
Lead and Zinc
Kaolin and Zeolite
TOTAL
TOTAL
29
8
8
3
13
1
4
66
CONSTRUCTION PLAN FOR PROCESSING AND REFINING
FACILITY BY COMMODITY (PROGRESS: 6% - 100%)
Metal MineralProcessing
Non-metal Mineral
Refining
Ores
Processing
1. Mineral processing is an effort to
improve the quality of minerals and ores
which produce specific physical and
chemical characteristics similar to the
original minerals or ores such as mineral
condensate and basted ores.
2. Mineral refining is an effort to
improve metal minerals quality
through extraction process and further
refining process to produce products
with different physical and chemical
characteristics from the original minerals
such as metal and mixed metal.
3. The processed metal minerals which can
be exported are copper concentrates,
iron concentrates, iron ores,
manganese, lead concentrate and zinc
concentrate.
4. Tin, nickel, bauxite, gold, silver and
chrome may only be exported after
being refined.
5. Minimum level of processing and
refining are stipulated in ESDM
Ministerial Decree No.1/2014
(Attachment 1: metal mining
commodities, Attachment 2: Non-metal
minerals; Attachment 3: Rock Mining
Commodities).
6. KK and IP holders for metal minerals are
only allowed to export their products
after being refined three years after the
promulgation of the ministerial decree
due to the minimum quantity required.
Millions Of Potential Human ResourcesBased on information above, it can be
concluded that millions of workers can be
absorbed by the mining sector. In terms
of workforce opportunities, dozens or
even hundreds of potential smelters being
created will certainly create positive effects.
Moreover, the smelters will be located in
all areas of the country which means that
each region will have the same potential to
develop and improve their welfare through
smelters. It is now up to the related parties
to make sure that the activities will improve
the peoples welfare and, at the same time,
minimize the destructive impact to the
environments.
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General Information of Infrastructure and Facilities in Indonesia
Road Networks : 437,759 km of which 258,744 km has
been concreted
Railway Track : 5,042 km of which 565 km is supported
by power grid
Airports : 684 airports, 13 international
64 helipads
Maritime : 21,579 navigable water lane
Piping Line : 8,183 km of natural gas
7,429 km of crude oil
1,329 km of other refinery products
The information mentioned above indicates trillions of Rupiah
worth investment opportunities. The opportunities are there; now,
it is up to the government and related parties to respond in order
to improve the infrastructure.
Maritime ShaftBefore the General Election 2014 and being promoted by one
of the presidential candidates, the term Sea Toll was already
familiar. Many people picture it to be a toll road built above the
sea connecting one island to another. But then the campaigning
team of the candidate (now President of Republic of Indonesia)
explained that the concept of Sea Toll is to optimize the
improvement of sea harbors to enable any size of ships to moor. If
the capacity is improved, the cost can automatically be reduced as
well as the economic cost that is hard to avoid nowadays.
The idea, then, was packaged into a form of Maritime Shaft
inspired by the background of Indonesian culture which was
strongly related to the ocean. Maritime Country was the basis
to develop Maritime Shaft. The great idea is reasonable due to
Indonesias strategic geographical position between two continents
and two oceans.
Indonesia consists of thousand of islands across the equator
and is located between Pacific and Indian oceans with a large
sea territory of 2.7 million km2 or around 70% of total area of
Indonesia while the land territory is only 1.9 million km2. The
sea territory under Indonesian jurisdiction is increased by the
Indonesian Exclusive Economic Zone from 3.1 km2 to 5.8 million
km2.
Many articles indicate that Indonesia lost its marine potentials up
to trillion of Rupiahs due to illegal fishing. Illegal fishing committed
by sophisticated trawlers from several foreign countries have
exploited the Indonesian sea. Therefore, the idea of Maritime Shaft
needs to be supported and strived for by the entire nation in order
to guard the vast area of the sea.
A Glance
InfrastructureOn The Indonesian
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54 INVESTASI
of Investment
NegativeList
In the effort to increase investment in
Indonesia and to execute the ASEAN
Economic Community (AEC), the
Government of Indonesia had done
amendments to the provision list of
business fields closed and open with certain
requirements in the field of investment
(Investment Negative List /DNI). These
amendments are stipulated in Presidential
Decree (Perpres) No. 39 in 2014 on List of
Business Fields Closed and Business Fields
Open with Conditions to Investment, that
was signed by President Susilo Bambang
Yudhoyono on April 23, 2014.
Quoted from Cabinet Secretary Website on May 2014, the
government divides businesses into three categories in the
Presidential Decree; Business Fields Closed and Business Fields
Open with Conditions to Investment: Business fields closed
for investment; Business fields open with the requirements of
the business, reserved for Small and Medium Enterprises and
Cooperatives, required partnerships, and business fields that are
required certain conditions, such as the ownership of capital,
specific location and specific licensing and Business fields open for
investment.
The regulation stipulates that investment in the business fields open
with the requirements must fulfill the location requirements as
stipulated in spatial and environmental regulations.
As stated in Article 4 Clause 2 of the Presidential Regulation, in
terms of investment licenses, the investors have to fulfill location
requirements if they want to expand their business outside the
location mentioned in the license.
To fulfill the requirements, the investors are not required to
establish a new company or obtain a new license.
It is stated in Article 5 that the regulation does not apply to
indirect investor or portfolio of which the transactions are done
through domestic stock market.
According to the regulation, the presidential decree does
not reduce investors obligation to obey the regulations and
requirements for business activities issued by: a. Ministerial/
non-ministerial institution that have technical authority in capital
investment and b. regional governments.
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55INVESTASI
The regulation is effective on the date of issuance that is on April
24, 2014.
Closed Business For InvestmentPresidential Decree No. 39/2014 stipulates types of business that
are closed for capital investments:
1. Chemical material industry as regulated in the Attachment
1 of Law No,9/2008 on Utilization of Chemical as Chemical
Weapon;
2. Alcoholic Drinks
3. Operations of Land Transportation Terminals;
4. Operations of Motor Vehicles Scaling Facilities;
5. Telecommunications/Navigational Equipment;
6. Air Traffic Control Operations;
7. Motor Vehicle Testing;
8. Management and Operations of Spectrum Monitoring System
for Radio Frequency and Satellite Orbits;
9. National Museums;
10. Historical heritage and ancient inscriptions (temple, palace,
ancient structures) and;
11. Gambling/casino.
According to the attachment 1 of Presidential Decree No. 39/2014,
closed business investments are utilized for non-commercial
purposes such as research and development after obtaining
approvals from the institutions responsible for the area.
General PerspectiveZaldy Ilham Masita, Chairman of the Indonesian Logistics
Association: the latest DNI reflects the fact that the
government wants to protect the logistic sector more by
cutting the maximum foreign investment from 100% to 33%
for business services such as warehouse, distributors, and cold
storage. With this condition, local players should improve their
ability to fund and their human resources in order to develop
national logistics business volumes including infrastructure
development of its logistics.
Yukki Nugrahawan Hanafi, Chairman of Indonesia Forwarder
& Logistics Association (ALFI): The issuance of Presidential
Decree No. 39/2014 can support the further development
of the logistic business in the country. We strongly support
this since it aims to protect national entrepreneurs. Most of
the logistics businesses in the country are controlled by local
entrepreneurs.
Setijadi, Chairman of Indonesian Supply Chain (SCI): The
issuance of the negative list of investment will strengthen the
logistics connectivity. DNI also regulates the investment in
transportation sector which is closely related to the mobility
of the logistics