Below is a list with tagged columns and company profiles.

Today's Headlines Infrastructure

  • Dam Construction in Indonesia: 8 Dams to Be Tendered

    Indonesia's Ministry of Public Works and Housing targets to complete the tender process for eight dams, worth a combined IDR 8.60 trillion (approx. USD $637 million) - all national strategic projects - by June 2016. Imam Santoso, Director of Dams at the Public Works Ministry, said one dam has already been tendered last week: the IDR 1.04 trillion Kuwil Kawangkoan Dam in North Sulawesi. Next week the government is set to tender the Leuwikeris Dam in West Java. The central government aims to tender a new dam project every two weeks up to June 2016.

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  • GVK to Develop New International Airport in Yogyakarta

    India-based conglomerate GVK is ready to invest USD $500 million as part of its commitment to develop a new international airport in Yogyakarta. Karthi Gajendran, President of Airport Development at GVK, said the company sees great potential in the construction of a new airport in Temon (Kulo Progo) near the coastal line in the Indonesian province of Yogyakarta. GVK will create a joint venture with Indonesian state-owned airport operator Angkasa Pura I later this year to develop the new airport.

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  • Cement Sales Indonesia Rise in January on Infrastructure Push

    The start of infrastructure projects in Indonesia - ranging from roads, bridges, power plants, smelters, and public housing - has managed to boost cement consumption in the first month of 2016. Widodo Santoso, Chairman of the Indonesian Cement Association (ASI), said domestic cement consumption in Indonesia rose 4.4 percent (y/y) to 5.14 million tons in January 2016 from the same month one year earlier. Highest growth in consumption occurred in Sumatra (+15.8 percent y/y to 1.1 million tons), Java (+5.3 percent y/y to 2.9 million tons) and Sulawesi (+19 percent y/y to 424,000 tons).

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  • Indonesian Banks Look at Food & Beverage Sector for 2016 Credit Growth

    Besides infrastructure, Indonesia's food and beverage sector remains a favorite of Indonesian banks for the disbursement of loans in 2016 as this sector is regarded promising. Meanwhile, a good supply of food products also supports a stable inflation rate (apart from administered prices, volatile food prices are a key contributor to inflation in Indonesia). Roy Armand Arfandi, General Director of Bank Permata, said Indonesia's economic growth is still highly dependent on people's purchasing power (household consumption accounting for nearly 56 percent of the nation's GDP), hence those sectors that support domestic consumption are attractive for banks.

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  • National Strategic Projects Indonesia: Land Acquisition & Funds

    Indonesian contractors involved in the development of infrastructure projects that have been declared 'national strategic projects' still see difficulty in realization of these projects despite the implementation of Presidential Instruction No. 1/2016 on the Acceleration of the Implementation of National Strategic Projects, signed on 8 January 2016 by Indonesian President Joko Widodo. This presidential instruction orders all relevant ministries and institutions to support the acceleration of the country's national strategic projects. By 2019 these projects - 225 in total - have to be completed.

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  • Moody's Investors Service Keeps Indonesia's Credit Rating at Baa3

    New York-based Moody's Investors Service kept Indonesia's sovereign credit rating at Baa3 (stable outlook), the lowest level within the investment grade rating. Although the rating agency is positive about the strong nature of Indonesia's economy and the prudent fiscal policy that is safeguarded by the Indonesian government and central bank, it sees few room for an upgrade soon (to Baa2) as government revenue is not expected to rise significantly in the period ahead. Moody's released this statement on Thursday (28/01).

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  • Infrastructure Indonesia: Government Offers Toll Road Projects

    Indonesia's Ministry of Public Works and Housing said the government plans to offer three toll road projects to investors in the first quarter of 2016: (1) Cileunyi-Sumedang-Dawuan (Cisumdawu) in West Java, (2) Serang-Panimbang in Banten, and (3) Legundi-Bunder in East Java. These projects are part of the Indonesian government's target to add 1,000 kilometers of new toll roads up to 2019 in an effort to enhance the country's infrastructure development, hence improving connectivity across the archipelago and reduce logistics costs.

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  • Indonesia & ASEAN Economic Community (AEC) - Introduction

    Per 1 January 2016 the ASEAN Economic Community (AEC) came into effect. This community implies stronger cooperation and integration among the ten member countries in Southeast Asia. According to its blue print the AEC involves the launch of a single market and production base among its member nations, hence allowing the free flow of goods, services, investment, and skilled labor as well as the freer flow of capital. Indonesia is one of the member countries.

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  • New Cities and Economic Centers along the Jakarta-Bandung Railway

    Indonesia's first high-speed train, which will run between Jakarta and Bandung (in West Java) is expected to give rise to new economic centers and cities along the 142 kilometers-long railway. Construction of the project, estimated to cost a total of USD $5.5 billion, is scheduled to kick off on 21 January 2016 in Bandung as Indonesia's Transportation Ministry has finally issued the track permit (this had been a major hurdle previously).

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  • Indonesia's Cement Sales End 2015 in a Positive Way

    Indonesia's cement sales totaled 61 million tons in 2015, up 1.8 percent from sales in 2014. Although the pace of growth is limited, the final result was well received by stakeholders and policymakers because in the first half of 2015 the nation's cement sales growth still stood at -1.5 percent on a year-on-year basis due to a delay in government-led infrastructure development. In the second half of the year there occurred a surge in infrastructure development projects, hence triggering higher cement sales.

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Latest Columns Infrastructure

  • Update on Infrastructure Development in Indonesia under Joko Widodo

    The Finance Ministry of Indonesia announced that it plans to inject USD 1.63 billion into state-owned financing company Sarana Multi Infrastruktur and to transform this company into an infrastructure bank in a move to boost infrastructure development across Southeast Asia’s largest economy. The central government needs private capital to fund its massive infrastructure program for the next five years as it can only account for 30 percent of required investment. For the remainder it relies on private capital and state-owned enterprises.

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  • Indonesia Investment Summit 2015: Challenges & Pillars of the Economy

    In his presentation at the Indonesia Investment Summit 2015, organized in Jakarta on 15-16 January, Standard Chartered Bank Senior Economist Fauzi Ichsan said that despite the challenges amid global uncertain times, there remains plenty room and opportunity for Indonesia to grow robustly on the long-term. In fact, by 2030 Ichsan believes that Indonesia will be among the world's top ten countries in terms of largest economies. For investors it is important to understand the challenges and key pillars of economic growth.

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  • ADB Praises Indonesia’s Reform Efforts but GDP Growth Limited in 2015

    Takehiko Nakao, President of the Asian Development Bank (ADB), estimates that the Indonesian economy will grow 5.6 percent year-on-year (y/y) in 2015, lower than the target that has been set by the Indonesian government in the 2015 State Budget (5.8 percent y/y). Nakao is slightly less optimistic as he expects a slowdown in government spending this year. On a positive note, Nakao’s forecast implies a sharp improvement in Indonesia’s economic growth in 2015 from an estimated 5.1 percentage point (y/y) GDP growth in 2014.

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  • Soekarno-Hatta Railway Project Indonesia: Tendered to Private Sector

    The Indonesian government changed the funding scheme for the construction of the Soekarno-Hatta International Airport Railway project (which will connect Soekarno Hatta International Airport, located nearby Jakarta, and Halim Airport in Jakarta). Previously, it was planned that this project, valued at IDR 26 trillion (USD $2.1 billion), would be offered through a public-private partnership (PPP) construction in which the Indonesian government would finance 55 percent of the costs. Now, however, the project is offered fully to the private sector.

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  • Macroeconomic Stability Indonesia: Inflation and GDP Update

    The Governor of Indonesia’s central bank, Agus Martowardojo, said that he expects inflation to accelerate to 6.1 percent year-on-year (y/y) in November 2014, significantly up from 4.83 percent y/y in the previous month. Accelerated inflation is caused by the multiplier effect triggered by the recent subsidized fuel price hike in Southeast Asia’s largest economy. On 18 November 2014, the government introduced higher prices for subsidized fuels in a bid to reallocate public spending from fuel consumption to structural development.

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  • What are Joko Widodo's Economic & Social Development Targets?

    Last week, Indonesian President Joko Widodo introduced higher subsidized fuel prices in Southeast Asia’s largest economy in a bid to shift generous public spending from fuel consumption to productive and structural economic and social development. Prices of subsidized low-octane gasoline (premium) and diesel (solar) were raised by over 30 percent, or IDR 2,000 (USD $0.17) per liter, starting from 00:00 on Tuesday (18/11). Widodo aims to reallocate these funds to infrastructure, social welfare and the maritime sector.

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  • US Investments in Indonesia: American Companies Eager to Invest

    A total of 35 American companies are interested to invest a combined USD $61 billion in Indonesia over the next five years according to a survey conducted by the Paramadina Public Policy Institute, the American Chamber of Commerce in Indonesia (AmCham Indonesia), the Indonesian Employers Association (Apindo), and the Indonesian Chamber of Commerce and Industry (Kadin Indonesia). These 35 US companies have already invested a total of USD $65 billion in Indonesia over the period 2004 to 2012.

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  • Aviation Industry Indonesia: Air Passenger Traffic Growth is Slowing

    The number of air passengers in Indonesia will most likely fail to meet its growth target in 2014. Based on government data, the number of air passengers in Southeast Asia’s largest economy reached 47.5 million in the first eight months of 2014, a 5.82 percentage point growth from the same period last year. However, the Indonesia National Air Carrier Association (INACA) initially targeted annual passenger growth in the range of 12-15 percent for 2014. Amid slowing economic growth, people’s purchasing power has declined.

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  • Positive Outlook Investments in Indonesia’s Food & Beverage Industry

    Investment in Indonesia’s processed food and beverage industry is expected to grow at least ten percent to IDR 55 trillion (USD $4.6 billion) in 2015 from an estimated investment realization of IDR 50 trillion in 2014. Adhi Lukman, General Chairman of the Indonesian Food and Beverage Association (GAPMMI), said that investments in this sector have been solid due to rising consumption of food and beverages in Southeast Asia’s largest economy. Particularly foreign investments have been strong in 2014 and are expected to continue next year.

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  • What are the Economic Challenges Faced by President Joko Widodo?

    Today (20/10), Central Jakarta seems to have changed into one big party as Joko Widodo was inaugurated as Indonesia’s seventh president earlier this morning. For the remainder of the day celebrations will be held at Monas (National Monument) and surrounding areas. However, it is of vital importance that Widodo (popularly known as Jokowi) will start to focus on this presidential duties tomorrow as the country is facing a number of economic challenges. What are these challenges?

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