Below is a list with tagged columns and company profiles.

Today's Headlines Infrastructure

  • Heavy Equipment Industry Indonesia Plagued by Low Commodity Prices

    Production of heavy equipment in Indonesia fell 23 percent (y/y) to 4,100 units in 2015 due to the weak conditions in the mining and agriculture sectors. Traditionally, most of heavy equipment sales occur in these two sectors. Weak demand caused utilization of the nation's installed production capacity for heavy equipment to fall to 41 percent in 2015 from 51 percent in the preceding year. When fully utilized Indonesia can produce an estimated total of 10,000 units of heavy equipment per year.

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  • Cement Industry Indonesia in 2016: Growth on Infrastructure Push

    The push for government-led infrastructure development across Indonesia, which started from mid-2015, is expected to cause rising cement sales in Indonesia in 2016. The Indonesian Cement Association (ASI) expects to see a 5 percentage point growth in Indonesian cement sales to 64.5 million tons this year (from an estimated 61.5 million tons in 2015). However, ASI Chairman Widodo Santoso emphasized that a delay in government spending could jeopardize achieving the sales projection.

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  • Government of Indonesia Preparing 2016 Infrastructure Projects

    Although Indonesian President Joko 'Jokowi' Widodo pledged to boost infrastructure development across Indonesia, government spending on infrastructure projects was sluggish during his first year in office due to budgetary and organizational reforms (including cutting the energy subsidies). A positive sign, however, is that government spending on infrastructure development and the number of groundbreaking ceremonies for infrastructure projects rose in the second half of 2015 as reforms were completed.

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  • Analysts: Indonesia Should Attract 33 Million Foreign Tourists by 2019

    Although the Indonesian government's target of welcoming 20 million foreign tourists by 2019 seems highly ambitious given that Indonesia may fail to achieve its target of seeing 10 million foreign visitor arrivals in 2015, several analysts claim that this target is too low. They believe that the target should be raised to 33 million foreign visitors, earning USD $40 billion in foreign exchange, hence replacing crude palm oil as the country's leading foreign exchange earner. However, this new target would only be possible if the government is serious about developing its 10 designated tourist destinations.

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  • Cement Sales Indonesia Climb 4.7% (y/y) in November 2015

    Cement sales in Indonesia climbed 4.7 percent (y/y) to 6.1 million tons in November 2015 supported by rising cement sales in all regions apart from the Moluccas and Papua. Widodo Santoso, Chairman of the Indonesian Cement Association (ASI), said domestic cement demand rose sharply in November despite seeing some rainfall (which usually leads to delays in development of infrastructure and other construction projects). Santoso says this rise is due to improved government spending on infrastructure projects.

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  • Batang Plant: Test Case for Indonesia's Land Acquisition Act

    Land acquisition remains a major obstacle to infrastructure development in Indonesia. Full-scale construction of the USD $4 billion Batang plant, a 2 GW coal-fired power plant in Central Java, is waiting for the final ruling of Indonesia's Supreme Court near the year-end. This court case is an important one as it will be the first court case to test Indonesia's Law No.2/2012 on Land Procurement for Development in the Public Interest (known as the 'Land Acquisition Act'). The Batang plant is a public-private partnership (PPP) project.

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  • Fitch Ratings' Indonesia Property Watch Report: Pessimistic View

    In its latest Indonesia Property Watch report, Fitch Ratings states that housing demand in Indonesia remained weak in the third quarter of 2015, leading to property developers' decision to postpone a number of new projects. Low commodity prices and high inflation (up to Q3-2015) led to sluggish demand and tepid economic growth in Southeast Asia's largest economy. Fitch Ratings said residential property price growth in Indonesia continued to slow for the eight consecutive quarter and believes prices are to remain muted in the coming year.

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  • Indonesia Investments' Newsletter of 22 November 2015 Released

    On 22 November 2015, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website over the last seven days. Most of the topics involve economic matters such as updates on Indonesia's trade balance, the interest rate environment, infrastructure development, global bonds, IPOs on the Indonesia Stock Exchange, Islamic banking, and much more.

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  • Construction Firm Adhi Karya Thriving on Indonesia's Infrastructure Push

    Indonesian publicly-listed construction firm Adhi Karya is expected to be one of the main beneficiaries of the government's push for infrastructure development across the archipelago. Adhi Karya is for 51 percent government-owned and therefore has close ties with the government. In the first ten months of 2015 Adhi Karya clinched IDR 10.6 trillion (approx. USD $774 million) worth of new contracts, up 100 percent from contracts won in the same period last year. Nearly half of these contracts involve projects (partly) financed by the central or local governments' budgets.

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  • Bank Indonesia Expects GDP Growth at Lower End of Target Range in 2015

    The central bank of Indonesia (Bank Indonesia) expects the country's economic growth to come in the lower end of its 4.7-5.1 percent (y/y) gross domestic product (GDP) growth target range for full-year 2015. Bank Indonesia Governor Agus Martowardojo expects to see accelerated economic growth in the last quarter of the year (from the preceding quarter) due to increased government spending and investment. In the second quarter of 2015, Indonesia's economy expanded at the slowest pace in six years (+4.67 percent y/y), then accelerating to 4.73 percent (y/y) in the following quarter.

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Latest Columns Infrastructure

  • Indonesia Jumps to No. 38 in Global Competitiveness Index 2013-2014

    In recent weeks, Indonesia has to cope with a large amount of negative publicity as large capital outflows from the country's financial markets occurred, partly due to weak economic results regarding the current account balance, inflation and the the rupiah. Interest rates are rising, thus eroding people's purchasing power and consequently curbing economic growth. However, the Global Competitiveness Index 2013-2014, released by World Economic Forum, contained a positive outcome for Southeast Asia's largest economy.

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  • Indonesian Government Proposes $32.6 Billion of Subsidy Spending in 2014

    The government of Indonesia proposes to allocate IDR 336.24 trillion (USD $32.6 billion) for subsidy spending in the 2014 state budget draft: IDR 284.7 trillion (USD $27.6 billion) for energy subsidies and IDR 51.6 trillion (USD $5.0 billion) for non-energy subsidies. The proposed amount implies a 3.41 percent fall in total subsidy allocation compared to Indonesia's state budget in 2013. However, despite a reduction, subsidy expenditure is still large at 18.5 percent of total government spending (IDR 1,816.7 trillion).

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  • Slowing Growth in Indonesian Cement Sales Continues in Semester II

    Cement sales in Indonesia grew by seven percent to 32.9 million tons in the period January to July 2013. This pace of growth is significantly lower compared to the double-digit cement growth rate last year and thus forms another sign of cooling economic growth in Southeast Asia's largest economy (cement sales are a good indicator to measure the state of economic growth of a country). A slowdown in domestic cement sales is likely to continue in the second half of 2013, partly due to a decline in infrastructure projects.

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  • Revised Tax Holiday and Tax Allowance to Attract Investments in Indonesia

    Apart from the five tax incentives that I have mentioned in a previous column, the Indonesian government also intends to ease two other tax rules in order to boost investments in Indonesia from 2014 onwards. These are the tax holiday and tax allowance. Relaxation of the tax holiday involves an alteration to the period as well as the size of the investment, and relaxation of procedural difficulties. Relaxation of the tax allowance involves the revision of the number of sectors that are eligible and a relaxation of procedures in the form of tax clearance.

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  • Groundbreaking of Sunda Strait Bridge Project Unlikely to Occur in 2014

    Due to uncertainty over the feasibility study, it seems highly unlikely that groundbreaking of the ambitious Sunda Strait Bridge project can be conducted in 2014. There has been a long delay with the feasibility study as differences of opinion emerged over who would undertake the study and how it will be financed. Economic Minister Hatta Rajasa said that if the government considers the project to have high priority, then it should make a decision now. If not, Indonesia's next government - after the 2014 elections - will be burdened with the issue.

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  • Supported by Domestic Investors, Indonesia's Stock Index Rises 0.61%

    Indonesia's main stock index (IHSG) rebounded on Tuesday (30/07) as domestic investors were keen on buying Indonesian assets. The value of transactions rose steeply to IDR 8.9 trillion (USD $872.5 million) and four billion shares changed hands. Indonesia's blue chips experienced a good day with Perusahaan Gas Negara gaining 3.51 percent, Bank Rakyat Indonesia 3.18 percent, and Telekomunikasi Indonesia rising 3.07 percent. The IHSG ended the trading day at 4,608.49 points, a 0.61 gain.

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  • Chamber of Commerce: Problems of Infrastructure Projects in Indonesia

    Indonesia's Chamber of Commerce and Industry (Kadin) said that it signals a lot of foreign interest in infrastructure projects in Indonesia. However, the country's unconducive investment climate blocks investors from initiating or participating in these projects. A number of matters that cause the unconducive investment climate are discrepancies in regulatory framework between central and regional governments, land acquisition, and a lack of human resources with adequate skills.

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  • Indonesia's Cement Consumption Grows 8.6% in January - April 2013

    Cement consumption in Indonesia increased 8.6 percent to 18.11 million tons in the first four months of 2013. Demand was particularly supported by property and housing projects in the bigger cities of Indonesia. Another pillar of support was found in the development of various infrastructure projects (including those within the framework of the government's ambitious MP3EI plan). The Indonesian Cement Association expects this year's cement consumption in Indonesia to rise to 61 million tons in total.

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  • Bloody May; the Month that Brings Traditional Pressures on Indonesia's IHSG

    Last week Indonesia's main stock index (IHSG) was mixed with a weakening trend. The index lost 19.9 points, equivalent to 0.40 percent of its value. During the last month, the index consolidated within the range of 4,800 and 5,030 points. Foreign funds continued to pour in and trade volume remained high although below average trade in the last three weeks. In fact, our technical indicators are showing signs that Indonesia's main stock index has become saturated.

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  • Astra International (ASII) Presents First Quarter Results of 2013

    Astra International, Indonesia's largest listed company by market capitalization, presented its Q1-2013 financial results yesterday. The company, which represents the dominating force in Indonesia's automotive sector, posted a seven percent fall in net earnings (YoY) to IDR 4,310 trillion (USD $444.3 million) amid Indonesia's rising labour costs, weak commodity prices, increased competition in the country's car sector and effects of new minimum down-payment regulations in automotive Shariah-financing.

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