MARKETING OF BIODIESEL HINDRANCED

This year some of Indonesia’s premium export commodities and rubber were posting price downturn due to low global economic condition. Price of farm in 2014 went down by 2.8% against 2013. The down turning trend was predicted to continue till end of this year.

Some buyer countries like India and China were having economic slowdown so demand from the 2 countries dropped. One of the solutions was to increase absorption of palm at home to be processed in bio diesel.

The problem was according to Togar Sitanggang, Chairman of Indonesia’s Oliochemicals Indonesia, The government seemed not serious about tackling bio diesel problem “Pricing of bio-diesel by Pertamina for bio-diesel mix was not condusive to producers so they were reluctant to process CPO into vegetable fuel.” He said.

Pertamina with Government’s approval stipulated price of diesel based on Mean Oil Plats Singapore (MOPS) which was said to be most appropriate for Indonesia. Pricing caused producers to lost USD 200/tons.

“The Government must not sit on their laurels. Unless actions were taken the bio industry at home would die,” he said. Today the government was evaluating production of bio-diesel for the next tender. Togar was expecting that the MOPS formula be eliminated, to be replaced by other formula which was more profitable. Or else the Government’s target to use bio-diesel with 20% mix would be delayed.

Tony L. apalm researcher predicted that the condition of low CPO price might last long. The Government could no longer rely on CPO as source of income.

Many things could be produced of palm wastage to increase income. From the liquid pool for example with methane capture technology electricity could be produced. PLN would take any amount of power at profitable price.

Besides, improved processing technology might increase yields today from wastage which contained 5% oil. To some European state such was extremely high because their rape seed had only 1.5% yield. So even palm wastage still contained more oil.

Wastage like empty plume could be used as bio energy. This was necessary because this year production cost might increase just as CPO price. Without other source of income, plantation growers would have difficulty. (SS)

Business News - February 13, 2015

INDONESIA PROMOTE EXPORT OF FOOD AND CLOTHING THROUGH PREFERENTIAL TRADE AGREEMENT

In the effort to increase trade volume, the Ministry of Trade was enhancing collaborations, such as with Pakistan with whom Indonesia booked surplus of Rp.1.8 billion. “We believe that Pakistan could serve as business entry gate to Central Asia,” this was disclosed by the Dir Gen of PEN Nus Nuzullia Iskak in Jakarta on Tuesday (10/2). The statement was made after receiving Representative of the Karachi Chamber of Commerce and Industry (KCCI) and Pakistan Rice Exporter Association (REAP). The delegate was led by Senior Vice President of KCCI and REAP. The delegation was led by Ibrahim Kasumbi.

The meeting which was held by collaboration of the Director General of PEN in Karachi; showed that Karachi had strong desire to be engaged in business with Indonesia. “The momentum must be grabbed by Indonesian businesspeople. Moreover, we already had Preferential Trade Agreement with Pakistan.” She said. Karachi was a busy business center in Pakistan. Various commodities entering Central Asia started with the Karachi Harbor. Karachi would be highly potential to Indonesia.” He said.

In the past Karachi was one the capital city of Pakistan where the main harbors were located. Karachi was also the center of industry in Pakistan and Karachi airport was one of the busiest airport in Asia. Beside increase of trading in Karachi enabled Indonesia to aim at 23,7 million target of Karachi population and 183 million people which was the 6^th largest population in the world Karachi could also serve as entry gate for Indonesia’s export to South Asia including other land locked countries in Asia like Iran and Afghanistan.

In that opportunity the Karachi Delegation invited Indonesia to participate in the “My Karachi Oasis of Harmony” expo to be held in April 10-12-2015. Through this expo, the Karachi delegation expected Indonesia businesspeople to foster closer trade relationship with businesspeople in Karachi. Today trading trend grew positively by around 25.36%.

In 2013 total Indonesia – Pakistan trade volume was posted at USD 1.584 consisting of non oil gas trading USD 1,583 billion and oil gas trading USD 450 thousand while export of Indonesia’s non oil gas commodities to Pakistan was posted at USD 1,414 billion and from Pakistan to Indonesia USD 168 million.

Accumulatively through January-November 2014 total of Indonesia – Pakistan non oil gas trading was posted at USD 2.076 billion broken down as: Indonesia’s mon non-oil gas export USD 1.938 billion and import USD 137 million. Hence Indonesia still posted surplus of USD 1,801 or increasing by 65.19% against same period of 2013.

Indonesia’s export to Pakistan through January-November 2014 was: Palm oil and it’s by products, non-chemically modified (HS 1511); nuts nesoi, fresh or dried (HS 0802), coal briquettes, avoids etc mfr from coal (HS 2701); Yarn (new sew thread); synthetic staple fibres, not retail (HS 5509); and artificial stable fibres, not carded, combed etc: Riuce (HS 1006); citrus fruit; fresh or dried (HS 0805); leather of animal nessoy; no hair nessoy (HS 4107); and fish, frozen (no fish fillets or fish meat) (HS 0303). (SS)

Business News - February 13, 2015

APHINDO : THE DOWNSTREAM PLASTIC MARKET STILL HIGHLY PROSPECTIVE

The Aphindo Association reported that domestic plastic consumption in Indonesia was still low compared to that in other Asean countries so there was wider market opportunities for the downstream plastic industry. Tjokro Gunawan, President of Aphindo stated on Monday (9/2). Thailand’s need was 50kg per year per capita, while Indonesia only 10kg. It proves Indonesia’s high potential because Indonesia’s population was equal to 60% of Asean population.

In line with the expansion in the upstream sector in this case the petro chemical industry dependency on import could be reduced. That was what being done by the petro chemical industry, they expanded and build new factories with investments worth billions of dollars till 2019. Tjokro disclosed that the capital investments originated from PT Pertamina (Persero) and PTT Global Chemical, PT Chandra Asri Petro Chemical Industry Tbk and PT PolytamaPropindo.

Pertamina partnership with a Thailand company to build an integrated petro chemical industry complex was worth USD 8 billion. Chandra Asri injected USD 1.3 billion at home to build a Styriene Butadinee Rubber (SBR) and increase capacity of Naptha Cracker plant. Meanwhile Polytrama would build an imported Propylene Receiver Terminal worth USD 10 billion.

Tjokro stated that Aphindo had proposed lowered income tax to the Ministry of Industry and the Association was asked to make detailed calculation. He had asked the Government to lower import tax for plastic raw materials to 5%. He said that the percentage was inclusive of business continuity on the upstream as well as downstream. Today the effective import tax was 10% which was regulated in the Regulation of the Ministry of Finance (PMK) No. 19.2009 on import tax of certain products.

The import tax as applicable today was rated as not hospitable to industry. The percentage was too high so price of imported raw materials was less competitive. The 10% import tax made importers refuse to import from Asean countries of ACFTA. Imported raw materials was not ignorable as supply from the domestic side was still not sufficient. Business expansion in the upstream sector needed time so the downstream industry must import to fulfill need. Import of PP this year was estimated at 700,000 tons while PE was around 500,000 tons while tye need for PP came to 1.5 million tons and 1.3 million tons for Pollitilena.

Tjokro felt that production cost was not advantaged by lowered world’s oil price that was happening in Thailand due to Rupiah depreciation factor.

Under the circumstances, business people at the downstream line were making adjustment of selling price up to 5%. The cause was not only Rupiah depreciation and import tax but also wages increase and inflation. The need for plastic at national scale this year was predicted at 3 to 4 million tons. The highest demand was still plastic bags and plastic bottles. Supposedly plastic material was replaceable by glassware, wood or metal. (SS)

Business News - February 13, 2015

THE MINISTER OF MARITIME AFFAIRS : SAFEGUARD OUR OUTER REMOTE ISLANDS

The coordinating Ministry of Maritime Affairs assessed that their prioritized mission was to safeguard Indonesia’s outer remote islands. The case of Indonesia-Malaysia dispute over Sempadan-Ligitan islands which ended up in mediation by the International Supreme Court in Den Haag Holland who decided Malaysia as winner of the dispute.

Dispute over islands by the two countries has been going on for decades. The Sempadan-Ligitan island despute brought Indonesia and Malaysia on an agreement in 1969. In that truce it was agreed that Indonesia and Malaysia would put status quo on the island which was located in East Kalimantan.

In 1997 Malaysia and Indonesia agreed to bring the case to International court. Both countries persisted to claim the island as theirs. “In the past we were unaware of what was going on. We were supposed to have 17,000 islands but lost 2 islands, we were shocked. By the time the case surfaced in 1969, neither Malaysia not Indonesia was sure who owned the islands” the coordinating Minister of Maritime Affairs Indroyono Soesilo told Business News (10/2).

At that time indonesia’s second President Suhato ended confrontation against Malaysia. President Soeharto met with Malaysia’s Prime Minister Tun Abdul Razak (successor to PM Tengku Abdul Rahman). The two countries agreed to suspend negotiation over Sipadan Ligitan. In the perspective of history, the Netherlands claimed one island as part of their Kingdom while Britain claimed another island as their. Over 32 years Malaysia had gradually developed the island into a resort. We have been off guard, but we decided to bring the case to the international Supreme Court in Den Haag.”

The judges in the Supreme Court in Den Haag viewed the case on very fundamental principle: did Indonesia and Malaysia have any proof to support their claim? Finally the judges referred to the principle of the island were treated as children and asked to answer the question: “who is your mother who raised you ?” and they would answer “Malaysia.”

Now might as well Indonesia comply to international Law, but in the future there should be no more case of island dispute like there Simpadan Ligitan. “To protect our remote islands, we would build infra structure, inter-insular connectivity and set up coast guard.”

On the other hand the Government of RI had enlisted (Toponim) Indonesian islands at the United nations. Indonesia was the worlds biggest archipelago with 17,504 islands scattered from Aceh to Papua. 92 small islands bordered on with neighboring countries. 13,466 islands were certified or enlisted at the united Nation’s Toponim. Many of the anonymous islands were not occupied by Indonesian citizens. (SS)

Business News - February 13, 2015