• Horticulture Sector Indonesia: Flexible toward Foreign Ownership Cap

    The Indonesian government's decision to limit foreign ownership in the horticulture sector to a maximum of 30 percent (through Law No. 13/2010 on Horticulture), from 95 percent previously, continues to cause a polemic as such protectionism may be a big disadvantage to the development of Indonesia's horticulture sector. Moreover, the law works retroactively implying that existing companies owned by foreign investors need to divest their majority ownership interests. In Law No. 13/2010 foreigners were given four years to divest their shares.

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  • Indonesia's Ceramic Producer Arwana Citramulia to Take-Off in 2016

    Higher sales, higher selling prices, and lower production costs are expected to impact positively on the performance of Arwana Citramulia, one of Indonesia's big four ceramic manufacturers. The company's ceramic sales volume is projected to surge 35 percent (y/y) to 53 million square meters in 2016 from this year's estimated 40 million square meters, partly supported by the start of operations of Arwana Citramulia's new factory in Mojokerto (East Java). Arwana controls about 26 percent of Indonesia's ceramic tiles market among low-income consumers with its two flagship brands: Arwana and Uno.

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  • Wood Industry Indonesia: Timber Legality Verification System (SVLK)

    Ahead of implementation of the Forest Law Enforcement, Governance and Trade (FLEGT) action plan in the European Union (EU) on 1 April 2016, EU members request that all wood and timber products exported from Indonesia into the EU have the Timber Legality Verification System (in Indonesian: Sistem Verifikasi Legalitas Kayu, or, SVLK) certificate. The SVLK is an Indonesian system designed to verify the legality of its timber products. Meanwhile, the EU's FLEGT plan is designed to combat illegal logging and enhance forest management across the globe.

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  • Infrastructure Development Indonesia: Gaining Momentum in 2016

    After having grown rapidly in the years 2010-2013, infrastructure development in Indonesia lost its momentum in 2014. This was due to limited available government funds, uncertainty caused by the legislative and presidential elections, and the nation's slowing economic growth. After Joko Widodo became Indonesia's seventh president in October 2014, it was expected that infrastructure development would revive. However, it didn't. But Widodo made one important move by seriously reducing energy subsidies, hence making more funds available for infrastructure development.

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The views expressed in these business columns are the views of the authors or the interviewed persons only and therefore do not necessarily reflect the views of Indonesia Investments. The authors are free to ventilate their opinions about the Indonesian business climate. Facts presented in these columns are the result of the author's own research or indicated sources, read disclaimer
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