Below is a list with tagged columns and company profiles.

Today's Headlines Infrastructure

  • Indonesia's May Cement Sales Up 6.2%, Next Month's Sales Could Fall

    Indonesia's cement sales rose 6.2 percent (y/y) to 5.1 million tons in May 2016, the highest monthly figure so far in 2016. As the property sector of Indonesia remains subdued amid sluggish demand and development, growth in cement sales is regarded to be the result of infrastructure development. Data from the Indonesian Cement Association (ASI) show that Indonesia's cement sales total 24.1 million tons in the first five months of 2016, up 3.9 percent (y/y) from sales in the same period one year earlier.

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  • Infrastructure Indonesia: Jakarta's New Priok Port (Kalibaru) Opened Soon

    State-owned Pelindo II, the company that is involved in port services across ten Indonesian provinces, plans to conduct another test related to the New Priok Port on 2 July 2016. Full commercial operations are scheduled to start on 15 July 2016. The New Priok Port is one of the large government infrastructure projects involving the construction of a new port (an extension of the Tanjung Priok) in North Jakarta in order to tackle Indonesia's severe logistics trouble, while bringing Indonesia's port facilities on par with other world-class ports such as Singapore.

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  • Investment Opportunities in Indonesia's Retail Sector: Lucrative Potential?

    Indonesia managed to enter the top five in the Global Retail Development Index, reflecting the strength and potential of the nation's retail sector. In the 2016 edition of the index, compiled by global consulting company AT Kearney, Indonesia jumped to fifth position (from 12th in the 2015 edition). The Global Retail Development Index measures the attractiveness of the retail sector in 30 developing economies as well as identifying investment opportunities in these markets. China remains number one in the ranking, followed by India, Malaysia and Kazakhstan.

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  • Indonesia's Ranking in A Selection of International Indexes

    How does Indonesia rank internationally in terms of happiness, human development, global innovation, and global competitiveness? Below we present a number of global rankings. Generally, Indonesia is ranked among the lower-medium segment, implying the nation has a long way to go before becoming an advanced economy.

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  • Steel Industry Indonesia: Infrastructure Projects & China Production Cuts

    After a three-year slowdown, the steel industry of Indonesia is showing some positive developments supported by government-led infrastructure projects in Indonesia and the rising global steel price. The price for (benchmark) hot rolled coil has surged 47 percent since the start of 2016 to USD $485 per ton (May 2016 delivery). In late 2015 the price of hot rolled coil was as low as USD $265 per ton. Moreover, the mandatory usage of locally-manufactured steel for the infrastructure projects will have a positive impact on Indonesia's steel industry.

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  • Japan & Indonesia to Partner for Construction of Patimban Seaport

    Japanese Prime Minister Shinzo Abe informed Indonesian President Joko Widodo that Japan is eager to be involved in the USD $3 billion Patimban deep seaport in Subang (West Java). This seaport is envisaged to become an international seaport with a 7.5 million twenty-foot equivalent units (TEU) capacity. President Widodo is in Japan for a two-day visit (26-27 May). On the sidelines of the Group of Seven summit, Widodo and Abe discussed several projects: the Patimban seaport, the revitalization of the northern Java railway, and the Batang power plant.

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  • Weak Infrastructure Blocks Investment in Indonesia's Cold Storage Industry

    The cold storage industry of Indonesia needs IDR 12 trillion (approx. USD $902 million) of additional investment in order to raise installed capacity to a sufficient level. Currently, Indonesia still has to cope with a deficit in terms of the availability of cold storage facilities. This causes a problem for the preserving as well as the transportation of (processed) seafood, chicken meat, fruits and vegetables. At the start of 2016 the Indonesian government announced it would open the cold storage industry to foreign investment for the full 100 percent. However, investment realization has been limited.

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  • No Investment Grade Yet but S&P Positive about Indonesia

    Global credit rating agency Standard & Poor's (S&P) appreciates the policy reforms that have been conducted by the Indonesian government because these changes lead to more openness as well as to enhanced competitiveness. Apart from cutting costly energy subsidies (and redirecting a large chunk of available funds to infrastructure development) the government also unveiled 12 economic policy packages since September 2015 (while more packages are in the pipeline) that include matters such as tax incentives and deregulation (aimed at boosting investment).

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  • Some Thoughts on the Performance of Indonesia's Stock Market in 2016

    The stock performance of Indonesian companies listed on the Indonesia Stock Exchange (IDX) in 2016 is expected to be better than last year's performance. One of the factors that supports this assumption is Indonesia's accelerating economic growth. Most - if not all - analysts expect GDP growth to rebound from its six-year low of 4.79 percent (y/y) in 2015. Indonesia's Q4-2015 GDP growth at 5.04 percent (y/y) was already promising (supported by government spending). In 2016 a growth pace in the range of 5.0 - 5.2 percent (y/y) should be possible. Although the link is not perfect, there is a correlation between a nation's stock market and its GDP growth.

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  • Toll Road Development Indonesia: State-Owned Companies Take Over

    Two of Indonesia's state-controlled companies will acquire at least 11 toll road concessions (with a total length of 525.7 kilometers and combined value of IDR 53.5 trillion or approx. USD $4.1 billion) from the private sector in the next two years. Toll road operator Jasa Marga is expected to acquire four toll road projects with a total length of 262.3 kilometers, estimated to be worth IDR 18.4 trillion (approx. USD $1.4 billion). Meanwhile construction firm Waskita Karya plans to acquire seven toll road projects (with a combined length of 263.4 kilometers), take-overs estimated to require IDR 35.1 trillion (approx. USD $2.7 billion) of investment.

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Latest Columns Infrastructure

  • Infrastructure Update Indonesia: Balikpapan-Samarinda Toll Road

    One of the toll roads that is high on the Indonesian government's priority list is the Balikpapan-Samarinda toll road in East Kalimantan. The project is part of the government's quest to boost infrastructure development, thus reduce the nation's high logistics costs and make local businesses more competitive. However, as with every big infrastructure project in Southeast Asia's largest economy, there are bottlenecks that have caused a significant delay.

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  • Funding Indonesia's Infrastructure Push; Eyeing Foreign Pension Funds

    From Hamburg (Germany) where he visited the G-20 summit, Indonesian President Joko Widodo instructed his cabinet to increase efforts to attract investment into Indonesia. Now Indonesia recently obtained the investment grade status from all important global credit rating agencies, it should make Indonesia a more attractive investment destination for foreigners, including institutional investors such as pension funds.

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  • Investment Projects on Offer in Indonesia: Airport Development & Management

    Angkasa Pura I, the state-owned firm that provides airport management services in the central and eastern region of Indonesia, offers foreign and domestic private investors the opportunity to operate and develop several airports (in cooperation with Angkasa Pura I) across Indonesia: the Sultan Aji Muhammad Sulaiman Airport in Sepinggan (Balikpapan, Kalimantan), Lombok Praya Airport on Lombok, and - in the pipeline - Kulon Progo Airport in Yogyakarta (Java).

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  • Indonesia Seeks to Develop More Special Economic Zones

    Six new 'special economic zones' (in Indonesian: kawasan ekonomi khusus, or KEK) should become operational in Indonesia soon. These six KEKs are: (1) Bitung, (2) Palu, (3) Tanjung Api-Api, (4) Mandalika, (5) Morotai, and (6) Maloy Batuta Trans Kalimantan. Indonesia's special economic zones are designated areas that offer both foreign and local investors preferential regulatory and tax regimes, as well as - in theory - the availability of key physical infrastructure such as harbors and power plants that should attract foreign investment in these zones.

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  • Fierce Battle for Market Share in Indonesia's Cement Sector

    For Indonesian cement producers it is vital to maintain their market share amid ongoing difficult times. With Indonesia's total installed annual cement production capacity now being around 100 million tons, while domestic demand is only expected to reach 65 million in 2017, cement players are facing weak prices amid a big oversupply, while foreign demand for Indonesian cement is yet to grow. Meanwhile, due to the arrival of various new cement players in Indonesia in recent years, competition for market share has become increasingly fierce.

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  • Infrastructure Update Indonesia: LRT, Energy, Airports & Toll Road

    The controversial Batang power plant in Central Java is expected to be completed in 2020 now all land acquisition disputes have been resolved. This USD $4.2 billion power plant experienced a long delay as about a dozen of local farmers were reluctant to sell their land to the developers of the project. In February 2016 Indonesia's Supreme Court ruled in favor of the project developers. Indonesian President Joko Widodo is a supporter of this project.

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  • Toll Road Development in Indonesia Disappointing in 2016

    Approaching the end of 2016 it is interesting to take a look whether the Indonesian government achieved its target in terms of infrastructure development. In this column we zoom in on toll road construction. Before 2016 started the central government - under the leadership of President Joko Widodo - targeted to see the construction of 136 kilometers of new toll roads this year. However, two weeks before the end of 2016 only 44 kilometers of new toll roads have been developed this year, achieving only 32 percent of the target.

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  • Infrastructure Development: the Tough Road Ahead for Indonesia

    Infrastructure is the artery of the economy. Blocked arteries are life threatening. Similarly, when there is a lack of adequate infrastructure within the economy (whether in terms of quality or quantity) the economy will run in a highly inefficient manner due to high logistics costs, uncompetitive businesses (as the costs of doing business rise significantly), as well as social injustice when, for example, it is difficult for part of the population to reach healthcare facilities, or, for children to reach a school.

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  • Tourism in Indonesia: Labuan Bajo (Flores), the 'New Bali'?

    Labuan Bajo, a small harbor town on the island of Flores in Indonesia's Nusa Tenggara region, is considered the "new Bali" due to its huge tourism potential. Blessed with beautiful and idyllic natural scenery (including beaches and offshore islands), foreign and domestic tourists will surely have a great experience. Although there are already about a dozen of high-class hotels (4 or 5 stars) and it is fairly well connected to other parts of Indonesia (through its Komodo Airport and port), the small fishing town remains underdeveloped for now.

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  • Construction Sector of Indonesia: State-Controlled Firms to Thrive?

    Construction companies in Indonesia are expected to grow strongly, supported by the availability of many new construction contracts, in the second half of 2016. Particularly state-controlled construction firms are expected to benefit from the government's push for infrastructure development. The central government's budget for infrastructure development has risen significantly in recent years (see table below), while the government also tries to direct part of the funds that are generated through the tax amnesty program toward infrastructure development.

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