Tuesday, 19 January 2016


White snapper would be one alternative commodity of mariculture. The Directorate General of Aquaculture (DJPB) through the Mariculture Center (BPBL) Batam has mastered the technology of white snapper hatchery and breeding, the technology will be disseminated to the public so that white snapper aquaculture business will be more efficient and profitable. Currently, white snapper selling price in the market is also quite competitive, around IDR 60,000 – 70,000 per kilogram. With cultivation period of about 6 months from size of stocking seed of up to 500 gram or two heads per kilogram.

The Ministry of Maritime Affairs and Fisheries (MMAF) is optimistic that aquacultured snapper production target of 590,000 tons for 2019 can be achieved through the development of hatchery technology. Slamet Soebjakto, Director General of Aquaculture of MMAF in Jakarta, Friday (September 25), said that MMAF set a target of 17% growth in snapper production per year until 2019. If the target for this year is 312,500 tons, then in 2019 production is expected to reach 590,000 tons.

MMAF, said Slamet, is to boost snapper production with diversification and mariculture commodity technology. Meanwhile, one type of snapper that became the mainstay is white snapper. To that end, MMAF has developed Demonstration Farm (Demfarm) of white snapper farming with floating fish net (KJA) in Belawan waters, North Sumatra. Demfarm is performed involving Putra Jala Senastri Aquaculture Group and conducted in 36 holes of KJA.

According to him, white snapper being chosen as one alternative crop of mariculture is based on many factors. Because white snapper seeding and enlargement technology has been mastered by DJPB through BPBL Batam and because the resale value is promising. BPBL Batam will continue to be prepared to disseminate the technology by Demfarm system so that the cultivation of white snapper can be done efficiently and profitably.

Exports of white snapper are increasingly promising as exports of groups were disrupted due to the weakening of Indonesian import demand. White snapper was increasingly promising because the needs of the local market is very huge and its exports can increase to many countries. The results of survey overseas, he revealed that white snapper market can be to many countries, namely Australia, the Middle East, Europe and the United States.

Slamet admitted the potential of mariculture area which is located in different areas in the country, only 2% that has been utilized. Therefore, there has to be a maximum role to optimize utilization. Currently the potential of Indonesian mariculture area reached 4.58 million hectare. In fact, there are many prospects for the development of aquaculture business, which can be done from the coastline area to Indonesian offshore area. He also reminded that the development of aquaculture is line with the vision and mission of the Working Cabinet to boost the sea to become a source of national economy in the future and making Indonesia the World Maritime Axis.

To that end, Slamet said, MMAF will develop some leading commodities, such as seaweed, which in the future will be developed for the coastline area of up to 4 miles. As for the area above 4 miles, marine aquaculture can be developed by using floating fish net (JKA) with commodities adapted to the conditions of each region. He explained that example of aquaculture which can be developed in each of these regions are, among others, snapper, grouper, star pomfret, abalone or tuna. In addition, mariculture commodity is an export commodity which is greatly demanded by foreign markets which are still wide open. (E)

Business New - September 30, 2015


Although the dry season this year is long than in previous years, the beverage industry sales turnover this year is not higher than the previous year. In addition to the decline in consumer purchasing power, there are some of the beverage industry raw materials that have to be imported. Therefore, the soaring currency exchange rates, including the US dollar, against the rupiah lately caused the growth of the beverage industry to be slower than the previous year.

“Compared to last year, where growth reached 9 percent, this year the beverage industry is estimated to grow between 6 to 7 percent. In addition, the turnover of a number of industries was reportedly not so good this year compared to the previous years, “Director of Beverage and Tobacco Industry of the Ministry of Industry, Faiz Ahmad, told Business News

Of a number of beverage industries, the biggest growth was supported by high growth of the diary industry and bottled water industry. But, it is not so far investment growth. For the food and beverage industry, Faiz explained, both new investment and investment expansion continued to show improvement. Even, investment expansion or new investment is greater than the previous year.

“Like Fonterra dairy products which obtained tax allowance and there is also bottled water industry which will expand its investment, he said. Previously it was reported that PT Fonterra Brands Manufactureing Indonesia (Fonterra Brands) a company that processes milk powder and condensed milk made an investment of USD 29.60 million in Bekasi, West Java. The expansion is intended for the production of various types of milk, Indonesia is still considered to be a magnet for global businesses to invest and for investment. One of the businesses that remain ‘glorious’ is the food and beverage business. In addition to being sustained by total population of 250 million people, it is also because the national business climate is conducive and friendly to investors.

Some time ago, Minister of Industry, Saleh lines of Coca-Cola Amatil Indonesia (CCAI) in Cikedokan, Bekasi, which is also location of the new factory in MM 2100 Industrial Area. Currently, the plant which is located on an area of 10 ha has five production lines for carbonated beverages, juices, and isotonic drinks. Saleh said that the company has committed to increase its investment in stages up to an equivalent of USD 500 million in the next few years.

Until 2014 CCAI investment value has reached USD 90 million, with soft drink production capacity of 67.7 million liters/year. Direct labor absorption is 12,000 people, not including indirect labor, such as agents and retailers. Director General of Agro Industry of the Ministry of Industry, Panggah Susanto, added that with the addition of this new line, it is estimated that there will be an additional production of 200 million liters for the production of bottled carbonated beverages, ready to drink tea, bottled water and fruit drinks. The addition of the new line absorbs 180 new workers.

Meanwhile, PT Oasis Waters International, which is located in Tanah Abang, Jakarta has recently stated to add investment up to IDR 1.4 trillion. The details are in 2011 - 2015 investment value is worth IDR 1.1 trillion, and in 2016 is ready to pour another IDR 300 billion investment fund.

According to Industry Minister, Saleh Husin, the company will build another factory owned by Oasis located in Semarang, Central Java, and be ready to operate in 2016. The company also uses other funds partly to strengthen the distribution chain to the consumer level. The company targeted to become the second largest producer of bottled water next year, with the ambition of increasing market share from the previous 13 percent to 20 percent, said Oasis Chairman, Alfi Gunawan. Efforts are made through the addition of networks and markets to all regions. Until now, 80 per cent of Oasis production distribution is still focused in Java.

Besides being engaged in the drinking water industry, the company is also considering to develop drinking water business other than bottled water business. According to Director of Oasis Waters International, Nathaniel Gunawan, the company is exploring product diversification that will generate tea of coffee drinks. The managers of the company are also determined to make Oasis a national brand.

Currently, we establish factories in Bali, Surabaya and Palembang. Next year we want to strengthen position in Semarang. After that we started to increase our share and brand outside Java. With the strength of the five plants to be operating in the future, it is expected that Oasis could produce many variants of bottled water products with a total capacity of 1.5 billion liters per year, “he explained. ()

Business New - September 30, 2015


Forest Stewardship Council (FSC) was a nonprofit organization which promote responsible management of product certification was already used all over the world, the only one acknowledged by Green Peace and WWF.

Today FSC Standardization was already applied to promote responsible forest management and was already applied on 184 million hectares of forest all over the world involving 29,000 companies. “Meaning 29,000 companies had produced green wood and paper, appreciated people’s right and checked the origin of raw materials,” said Hartono Prabowo, FSC Representative in Indonesia.

Today in Indonesia there were only 200 companies and 2 million ha of forestry already FSC Certified. Therefore measures had been taken to increase the number, among others by approaching the consumers to induce awareness and encourage them to demand companies to be FSC certified. In Indonesia the products already certified were Tetra Pak, the Kotak and Tessa tissue.

Separately Bambang Hendroyono, Secretary General of the Ministry of Environmental Affairs and Forestry stated in Indonesia the mandatory certificate was SVLK for products using wood as raw meterials, while it was compulsory to manage forest conservation.

Certification by foreign NGO like FSC Indonesia was welcome but it should only be voluntary. “The government do not insist producers to certify their products, but they whish to do it for marketing purpose, by all means, do it. Without SVLK certification the wood products are not marketable” he said.

Whatever was being done by NGO, as long as it was not against the Law, was not forbidden; but if it was beyond the limit Like Indonesia Pledge on Palm Oil where forest already cleared by the Government was regarded as destruction to the environment, it was not acceptable. “The country is ruled by the Government, not by NGO” (SS) 

Business New - September 30, 2015


The Ministry of Industry stated they planned to revise Permenperin No.15/MM-IND/PER/3/2014 by simplifying procedure of recommendation-giving for registered exporters by on line. Recommendation from the Ministry of Industry was needed by the Ministry of Trade to meet the procedures as required b the Regulation.

Permenperin No.15/M-IND/PER/3/2014 on Recommendation-giving by Registered Exporters of Processed and Purified Minery Products was related to Permendag No.04/M-DAG/PER/I/2014 on Rules for Export of Processed and Purified Minery Products. Hence simplification of the procedure would ease export activities of minery products. In this case it was not necessary for companies registered at the Ministry’s database to apply for export recommendation the manual way.

In response to Government’s plan, The Association of Indonesian Mineral Processors and Purifier stated that export recommendation by on line would cut long bureaucracy chain. Jonathan Handojo, chairman of the association stated in Jakarta on Friday (25/9) that the way it had been, to obtain such recommendation producers must apply for it the Ministry of Industry to be further passed on to the Ministry of Trade.

Through integrated database, processors and purifier companies with the status of Industrial Permit registered at the Ministry of Industry could automatically export their products. In many cases Processors or Purifier companies of IUI status were not permitted to export products if they did not have Mining Permit (IUP), while permit application must be through the Ministry of Energy and Mineral Resources. Jonathan said that this month there were two smelter companies who started to produce pig iron (NPI) they were: PT Bintang Timur Steel and PT Fajar Bhakti Lintas Nusantara. Hence of 21 association members, 13 companies had now started to produce.

In that same opportunity Jonathan urged the Government to cancel relaxation plan for export of raw minerals. He said that relaxation for bauxite and nickel exporting could injure smelters now operating in Indonesia. So far production activities in Smelters were hindrance due to scarcity of raw materials among IUP owners while many smelters in Indonesia had no mine because they only had IUI. If export valve for raw minerals were open, smelter companies would crumble.

He said that rules relaxation for exporting raw minerals in order to jack up export and increase natural forex reserves would destroy industry downstreaming process and spoil Indonesia’s credibility among foreign investors. The point was that smelter companies operating Indonesia were joint venture companies between Indonesia and South Korea, the Middle East countries, and China etc.

Therefore companies urged the Government to obey Law No. 4/2009 on Minery and Coal and Law No.3/2014 on Industry. Smelter operators, he said, also urged the Government to revise Govt. regulation PP No. 17.1986 on Authority, Regulation, Counseling and Developing Industry as implementation on Law No. 5/1984 on industry which had been cancelled and replaced by Law No. 3/2014. (SS)

Business New - September 30, 2015


Players of the moneymarket, global and domestic alike, were waiting for definite increase of FFR by the FED. The latest news was that Janet Yellen signaled there would be increase of interest by the Fed this year end provided inflation was stable and economy was strong enough to jack up employment.

Yellen, who spoke one week after suspension of FFR increase saw that development of global economy would not govern the Fed’s policy significantly. The statement included mentioning that weakening of inflation in the USA was only temporary and might shock investors. They rated that the Fed’s last week’s decision as signal that tight policy was not an urgent matter and would probably be executed next year.

According to Yellen, for the most part price downturn was due to particular reason such as strengthening of USD and declining of oil price which would soon end. Such might cause inflation to increase above the targeted 2% or above the average global inflation. In the other part of her statement Janet predicted that America would be able to maximize employment and stabilize prices.

The result was that USD would go on a rally as Yellen stated she predicted the Fed might increase FFR this year end. Yellen in the speech delivered at the University of Masachussettes, Amherst stated that US economic betterment “might need initial increase this year end followed by progressive monetary policy thereafter.”

Yellen’s statement was made one week after the Fed maintained FFR at near zero percent up to 0,25% in a two-day meeting September 16 – 17 last which was effective since 2006. Yellen stated that decision makers were monitoring development abroad “but never expect that weakening of economy in China or other places would cancel the Fed’s plan to increase FFR.”

Yellen’s statement was noteworthy in that they were progressing toward increasing FFR this year. Yellen had a strong argument that FFR should be increased this year. Previously the Fed sent varied messages to stockmarket. Last week for example, Yellen showed anxiety over weakening global economy. Yellen said: “A bearish global situation must be watched on.”

The statement could be interpreted as the Fed being “dovish” about timing of FFR increase. However, a few days later contradictory statement was made by other Presidents of the Fed who tend to be “hawkish”.

Spontaneously, investors of the stockmarket were trying hard to understand The Fed not to increase FFR on September 17 last and always predict timing of FFR increase. As known on September 17 last Yellen announced The Fed would not increase FFR.

Although The Fed was optimistic about US economy, Yellen referred to global economic slowdown as reason to suspend increase of FFR. Anxiety over China’s economic slowdown and the emerging markets caused wild movement of the financial market.

Furthermore on September 19, two days after Yellen’s speech, President of the Fed of San Fransisco John Williams said that the decision to increase FFR was getting near. Such was contradictory to the Fed official statement, which showed that 9 out of 10 members of the Fed refused increase of FFR.

The only one who agreed was Jeffrey Lacker, President of the Fed Richmond, who wished that the Fed would uplift FFR. Williams was of opinion that US economic performance was not guaranteed by bank economic performance was not guaranteed by bank interest close to zero percent. According to Williams, US economy policy was applied.

Furthermore on September 21, it turned out that Williams was not the only President who made statement contradictory to Yellen’s statement. President of the Fed St. Louis Bullard also agreed to increase FFR. He believed that there was a big obstacles today to increasing FFR. On the same day, President of the Fed Atlanta Andrew Lockhart said that most probably FFR would be increase this year as long as the stock market was peaceful.

Back to the statement made by Yellen, the more certain FFR was increase the better it would be to the global and domestic market.

The Money Market

So far pressures on Rupiah was continuing, Rupiah even touched Rp.14,600 per USD last week. BI’s mid rate showed Rupiah was at Rp.14,623 Per USD – lower than last week’s position at Rp.14,463. Per USD or lower than the latest position last week at Rp.14,463 and yet only last month (3/8) Rupiah was still at the position of Rp.13,492 per USD.

When many circles urged BI to lower BI rate to energize domestic economy, the Governor of BI Agus Martowardjo confirmed BI would not change benchmark rate until positive data comes into view.

If the existing data showed betterment, BI could analyze them, especially data which showed inflation was under control, deficit in current account was minimized, and global sentiments were relaxed.

Data of JISDOR showed that by Wednesday (23/9) last Rupiah settled at Rp.14,623 per USD, a downturn against the previous position of Rp.14,486. The Governor of BI said that Rupiah weakening was due to external turbulence. The world was afraid that economic slowdown in China might affect countries whose export was still relying in natural goods. Under the circumstances BI would always be in the market and run prudent policy to tame inflation.

In tune with the Governor of BI, the Coordinating Minister of Economy Darmin Nasution admitted Rupiah would soar through Rp.14,623 per USD as marketplayers were speculating on China’s future. Commodity prices was down as market speculated about China’s economy. Darmin did not see domestic factor influencing Rupiah slump.

Indisputably Rupiah that weakened to as low Rp.14,700 per USD was on account of external and internal sentiments, i.e. the Fed who suspended increase of FFR, weakening China’s economy and Indonesia’s weak fundamental economy.

Other sentiments that made Rupiah slump was revised projection of Indonesia’s economic growth by ADB from 5.4% to 4.9% this year refuted in negative market’s perception and Rupiah deeper sinking.

Beside there was released economic data like export which was not high enough and projected domestic economic growth which failed to reach above 5% - all posed as negative sentiment to Rupiah.

If Rupiah weakening was due to external sentiment, the Government must respond to it by uplifting market trust. It was right indeed for the Government to issue Chapter II of Economic Policy Package which was expected to affect Rupiah positively.

However it must be borne in mind the Government’s strategy alone would not automatically rescue Rupiah, sound action was still needed before any tangible result could be seen. The Government must constantly encourage businesspeople to build solid foundation so the strategy could bear quick result.

In the draft of Economic Policy Package Chapter II which was still being dissected, the objective of strategy was focused on Industry and Agriculture. The Policy Package would consist of rules and deregulations, mainly aimed at promoting export.

As told, President Joko Widodo had released Economic Policy Package Chapter I on September 9, 2015 in which 134 rules had been deregulated; the 134 Regulations were extracted from the previous 154 Regulations.

Of the above regulations some plans were to be underscored, i.e. acceleration of industrial estate development projects as mandated in the National Middle Term Development Plan (RPJMN). Directly or indirectly the impact would be seen in the Rupiah stabilization process.

The effort to build domestic economy foundation was important in building market trust in Indonesia’s economic prospect amidst rumors of the Fed increasing FFR this year. The Fed suspended increase of FFR at the FOMC meeting two weeks ago because the US manufacturing sector was not performing well. Unimpressive performance of the US Purchasing Index (PMI) which only inch up from 53.0 to 53.1 in August.

The Government of RI was also preparing an instrument to jack up national forex reserves whereby USD could be expected to stay longer in Indonesia.

Last week the Ministry of Finance Bambang Brodjosumantri attended meeting on increasing forex reserves at the Vice President’s office. The meeting which was chaired by Vice President Jusuf Kalla was also attended by Governor of BI Agus Martowardojo. The point of discussion was how to increase forex reserves by jacking up export.

The Government claimed they needed vast amount of forex reserves to prevent capital outflow due to global economic turbulence as soon as export was increased, the next step was to drive forex-from-export into the domestic banking system.

At the moment Indonesia’s forex reserves was still at safe level, at lease overseas debt. Still it was very urgent for the Government to increase forex. Governor of BI Agus Martowardojo reported that the position of national forex reserves on Monday (21/9) came to USD 103 billion, which was les than that of August 2015 at USD 105,3 billion.

Statement of the Governor of BI was in line with revised assumption of Rupiah value in RAPBN Budget 2016 which at the moment the basement level was increased to Rp.13.700 – Rp.13,900 per USD against the previous Rp.13,400 – Rp.13,900 per USD. The Governor of BI estimated pressures in Rupiah would still continue till Q I/2016.

Speculations of global economy over FFR increase by the Fed, devaluation of Yuan and lowered commodity prices would slow down capital inflow or even drive capital out of the country. By calendar year, by September 18, 2015 last, foreign capital market and government’s bonds was down to only around Rp.39 trillion against the same period in 2014 amounting to Rp.170 trillion.

Although there was still widening deficit in financial transaction, generally speaking DTB end of 2015 could be downsized to 2.2% of GDP. The amount was still close to around 3% of GDP.

Meanwhile BI estimated growth of Indonesia’s economy at around 5.2% - 5.6% in 2016. The Government lowered growth assumptions 5.3% against 5.5% in 2016.

From the above review Rupiah position in 25/9 was still volatile in the range of Rp.14,000 – Rp.14.600 per USD. This week Rupiah was projected to be in the range of Rp.14.400 – Rp.14,500 per USD because there was overshoot in Rupiah collection so chances for strengthening was still open.

The Capital Market

Index of IHSG was closed to weaken quite significantly at 2.29% (99.61 points) by end of session on Wednesday (13/9) last. IHSG dropped to the level of 4,144.427. Index of LQ 45 was also down by 3.02% to 707.864. IHSG’s lowest position was at 4,239.135.

IHSG nose dived as the global market was again worried about China’s economy. China’s manufacturing data dropped to the lowest level in the last 6.5 years. Jakarta Islamic index (JII) also dropped by 2.53% to 367,99 points. Index of Sri KEHATI dropped by -3.09% to 240.92 points. Net sell by foreign investors was worth Rp.689 billion while transaction value was Rp.4,896 trillion with trade volume of 7.016 billion shares.

Meanwhile index at Asian stockmarket weakened during closing session last Wednesday (23/9). China’s Manufacturing data dropped to 47.0% in September, the lowest in 6,5 years. The data flared up anxiety once more about China’s economic growth.

Negative sentiment was still lurking although China’s President Xi Jin Ping made his defensive statement that China’s economy remained at growth and remained stable. President Jiiping delivered his first speech during his state visit to the USA.

All in all Index of Hang Seng dropped by 2.26% (493.67 points) to the level of 21,302.91 points. Index of Shanghai also weakened by 2.19% (69.73%) to the level of 3,115.89 points. The same was with Straits Times Singapore which weakened by 0.56% (15.96 points) to 2,852,51 points. Meanwhile index of shares in Europe’s market strengthened in fluctuative trading amidst axiety China’s economy.

Benchmark index of Europe’s stockmarket inched up by 0.3%. Index FTSE 100 England rose by 0.37% to the level of  5.957.77 points. Index of DAX 30 Germany rose by 0.20% to the level of 9.589.70 points. Index of CAC 540 France inched down by 0,02% to the level of 4,427.79 points. The notable thing was that Weall Street was closed negative in the past 3 days since Tuesday till Thursday last week.

Uncertainty of FFR increase by the Fed and global economic slowdown accounted  for low stockmarket. Beside there was pressure To sell on Caterpillar, the biggest producer of mining and construction in The world fell by 6.3% to USD 65.8 because the company planned to dismiss 10,000 workers due to low economic condition with effect on mining and energy sector. STOP AT 03.35

Index of Dow Jones fell by 78.57 points (0.48%) to 16,201.32. Index of S&P 500 dropped by 6.52 points (0.34%) to 1,932.24. meanwhile index of nasdaq fell by 18.27 points (0.38%). There were around 7.7 lots being transacted above daily average numbering 7,5 billion shares.

Caterpillar shares dropped by 6.3% after announcing axing of cost in anticipating energy and minery crisis. Caterpillar could dismiss more than 10.000 workers and 20 facilities until 2018. Other industrial giants were also weakening including member of Dow General Electric and Honeywell International, both slumped by 15 points.

Governor of the Fed Janet Yellen said that she was expecting FFR could be increased this year. The stockmarket feared global economic slowdown as Yellen made the statement.

As the Fed decided to increase FFR respond came from players of the stockmarket from all over the world especially developing countries like Indonesia. All in all IHSG remained to be under pressure.

In fact the Fed’s decision to maintain FFR at low level in the past few years could mean positive signal to IHSG.

As Yellen signaled that the Fed might probably increase FFR, it could mean opportunity to players of the stockmarket to be more aggressive in buying cheap shares. Moreover there was news that realization of state’s expenditure by August 31, 2015 had reached Rp.1,054.2 trillion or 53.1% of total ceiling of expenditure in APBN-P 2015.

Meanwhile realization of state’s income had reached Rp.867.5 trillion or 49.2% of target in APBN-P 2015. Marketplayers were expecting budget absorption could be the catalyst of Indonesia’s improved economy in Semester 2 this year which would strengthen IHSG.

Development of the infra-structure sector including construction, energy, food including agro product and maritime business including tourism could be the catalysts for domestic stockmarket performance.

So it was advisable for the Monitory authorities in Indonesia to scheme up a strategy to keep capital from flowing out by accelerating executing of Economy Package policy Chapter I and to make chapter II come sooner. Hence the position of IHSG last week end moved in the range of 4,250 – 4,300 and to continue this week in the range of 4,300 – 4.350 as local investors returned after correction on IHSG and sectoral index which was too sharp in the weeks before. (SS)

Business New - September 30, 2015