AFTER CHINA, PERTAMINA LUBES TO ENTER VIETNAM SOON

            Pertamina was making expansive marketing of their lubrication oil by probing on Vietnam. The effort was now at the stage of market survey. Pertamina was expecting that this expansive marketing measures could strengthen and broaden market base of Pertamina lubes in Asia. At the World Petroleum Congress 2011 in Doha, Qatar, Pertamina had also probed on market expansion to the Asia Pacific region an Africa.

            Pertamina was optimistic about the prospect of lube’s marketing abroad. By November 2011 Pertamina posted realization of overseas marketing at 193 thousand kilo liter. This sales record was above target of overseas marketing at 156 thousand kilo liters. Vietnam was the most highly potential market for Pertamina lubs. Vietnam had been shoeing positive economic growth with total population of around 89 million people, Vietnam’s GDP was showing significant growth at seven to eight percent per annum with GDP posted at above USD 100 billions.

            In overseas markets, Pertamina had posted sales of lubes at an average of 80 thousand kilo per annum since 2007. Previously on September 14, 2011 Pertamina had exported lubs to Bangla Desh, Sudi Arabia, Myanmar, Singapore, Taiwan, the Philipippines, Timor Leste, Malaysia, Nepal, Australia, Japan, Thailand, Korea, China, Pakistan and Uni Arab Emirates.

            Appreciation for Pertamina’s lubricant products had been evident by increasing demand world-wide where sales had surpassed target by 23% and not to mention the number of awards won. Some were awards for Pertamina’s product quality and service. Pertamina lubes was awarded Top Brand Award 2010 from Frontier Consulting Group. Prima XP for four wheel vehicles lubes and Mesran for motorcycles. The awards won by Pertamina were proof of the company’s success in commanding over the domestic market while launching aggressive marketing campaigns overseas. In addition to that Mesran brand also was awarded Best Brand of The Decade by Mark Plus and Indonesia Original Brand.    

MINISRY FOR PUBLIC HOUSING IS ATTEMPTING TO REMOVE COST OF LICENSING FOR LOW-COST HOUSING

            Exemption of licensing cost is continuously attempted to accelerate provision of housing affordable to low-licensing cost is continuously attempted to accelerate provision of housing affordable to low-income society. The Ministry for Public Housing promised to discuss this matter with the regional government.

            Minister for Public Housing, Djan Faridz, said that cost of license for house construction could reach 30% of total expenditure spent by developers. This makes price of houses continue to increase and unaffordable to the society. Therefore, by reducing licensing cost, house prices will be cheaper and more affordable to the society. In addition to licensing problem, he also encourages so that low-income housing could be exempted from cost of electricity and water.

            Removal of licensing cost and cost of electricity and water installation is done in an attempt to reduce deficit in housing demand of last year at 13 million units.

            In connection to the removal of cost of license for building construction (IMB), Ombudsman of the Republic of Indonesia (ORI) asked the regional government to optimize coordination with the National Land Agency (BPN).

            Member of ORI, Khoirul Anwar, is in the opinion that the process of granting of IMB to the society has so far been very slow. Therefore, the regional government must optimize coordination with BPN. Meanwhile, the regional government should have valid data concerning grant of IMB.

            Head of Public Relations and Administration Bureau of the National Development Planning Board (Bappenas), Maruhun Batubara, stated that Bill on Land Provision for Development which has not been passed into law is the factor that hampers acceleration of construction of low-cost housing. Without the law, Law No. 1/2011 on Housing and Residential Areas passed early this year and Law No. 20/2011 on Low-Cost Apartment Units passed in October will become less effective.

MARKET POTENTIAL OF DOMESTIC AIRLINE SRILL HIGH

         The prospect of national airline business was today still high, where the number of passenger continued to grow with the increasing middle class people thanks to national economic growth. The growth was felt by two airline which managed to transport more passengers than other airlines. PT Garuda Indonesia Tbk the national airline posted growth of 15%. In quarter ll of 2011 Garuda posted growth up to 39% for the domestic market or an increase of 5% against same period of 2010, although still surpassed by Lion Air whose market share reached 50%.

         In view of the number of number of passengers carried by national airlines, in reality domestic routes were dominated by Lion Air, the national airline. In semester l 2011 the number of domestic passengers carried by PT Lion Air was 11,815,540 passengers while Garuda Tbk carried 6,380,700 passengers. As with international routes most of the passengers were carried by Garuda, i.e. 1,477,372 passengers while Lion air carried only 423,526 passengers.

           In case of international airline business, the market segment served by Garuda showed an increase of 32% or above other airline which were only 10%. In spite of slowdown of the global economic growth, i.e only 3.7% in the present condition, national airline were continuing to expand their fleet through 2011. Additional aircrafts had no correlation with slowdown of growth of international airline business because fleet expansion was accompanied by increasing number of passengers in the domestic route. In spite of the global crisis, local airline carried on with their plan to add more airplanes, regardless of crisis.

          Some aircrafts which were to be used to expand fleet of airlines like Lion Air, Sriwijaya Air and Garuda were wide-body and medium type aircrafts like Boeing 737-800NG, Airbus 330-200 and Airbus A 320. PT Garuda Indonesia Tbk still planned to operate seven 737-800NG 737-800NG by 2011 3 units of which were medium size aircrafts which were to serve domestic and regional routes like Singapore, Bangkok, Hong Kong and China. Furthermore 1 unit of Airbus A320 which soon would be used by Citilink, a subsidiary airline of Garuda.

           PT Garuda Indonesia Tbk now sets target to operate 154 units of aircrafts in 2015 with average life span of 5 years. Today the number aircrafts in operation numbered 89 units which were 7 to 8 years old and the condition were better than 2008 which were 12 years old on the average. The aircrafts purchased in 2011 were new aircrafts and there would be no more used aircrafts.

INDONESIA ENGADE AMERICA AND SOUTH KOREA IN FOOD RESILIENCE PROJECTS

       The Government of RI and the USA planned to foster technology-based collaboration to realize strong commitment of both nations to build strategic partnership especially in maritime industry and fishery. The effort to build food resiliency was parallel with mitigation effort of climate change. “Indonesia and the USA shared a long history in bilateral relationship, especially in maritime and fishery so it is most important to underscore America’s support in developing sea explorations, tapping of coastline resources and management of sustainable fishery in building food resiliency due to climate change”. The Ministry of Maritime and Fishery Sharif C Sutardjo told Business News (4/11).

          America’s support was also needed in the effort to crackdown on illegal fishing. Beside that, the eco-system approach on fishery management in Indonesia was also the concern of both nations. Collaboration in the execution of Port State Measure, empowerment of small fishermen, and steps toward meeting quality standard of products had been stipulated by America. Indonesia-America collaboration started in 2003 through the Mitra Bahari program and strengthened with signing of Memorandum of Understanding on collaboration in science, technology and application of maritime and fishery techniques in 2007.

         Meanwhile Prime Ambassador of the Republic of Korea to Indonesia. HE Kim Young Soon also stated his desire to promote bilateral relations between the two nations in the maritime and fishery sectors. To Indonesia, Korea was an important partner state after Presidents of both countries signed joint Declaration on Strategic Partnership in December 2006 last in Jakarta; bilateral relationship between Indonesia and Korea had been practically running well without hindrances.

          In the maritime and fishery sector, declaration by both countries was followed up by Meeting of the Working Level of Task Force in Bali mid of May 2011 last. Outcome of the meeting in Bali was that the Ministry of Maritime and Fishery of Maritime and Fishery of RI and the Ministry of Food, Agriculture, Forestry and Fishery of Korea agreed to foster collaboration in the Maritime and Fishery Sector. “The Governments of Indonesia and Korea agreed to expand area of collaboration including natural conservation, transfer of fishery wharf development technology and exchange of information in fish rearing and nursery” Sharif disclosed to Business News (4/11).

         At the same place, Kim Young Soon conveyed his gratitude for Indonesia’s participation and support in the Busan International Seafood and Fishery Expo 2011. The forum was a momentum for exchange of information on the global condition of fish market and promotion of Indonesian fishery products. “The two countries continuously strengthen their commitment at the Multilateral Asia Europe Meeting (ASEM) which would also be conducted simultaneously in Busan on 16 – 19 November next. The Yeosu Expo 2012 could also serve as a momentum to foster cooperation between Korea and Indonesia” Kim Young Soon Concluded.       

UNI EUROPE EXTEND GRANT FOR PROMOTING INVSTMENT IN INDONESIA

            Uni Europe extended grant to Indonesia amounting to € 22.5 million for developing capacity to related ministries/institutions in promoting trade and investment.

            The Directorate General of Debt Management, Ministry of Finance Rahmat Walutanto stated that The Trade Cooperation Facility (TCF) would support all Government efforts to promote trading and investment and to manage critical issues related to trade relationship and investment between Uni Europe and Indonesia.

            Rahmat expressed his highest appreciation to Uni Europe for their continued support to development programs of the Government of RI. This program would strengthen capacity of Government institutions to continue development in selected areas toward promoting trade and investments.

            The program, which was a strategic part of comprehensive collaboration aimed at just and sustainable economic growth in Indonesia complemented common initiative such as TSP II which promoted export development which enhanced export and support for reformation of public financial management and promotion of local communities as well as the active grant program which helped Indonesian business associations to increase their capacity.

            Moreover, the program also responded positively to the commitment of both parties to execute the Comprehensive Partnership and Cooperation Agreement (PCA) which included cooperation in developing trading capacity and facility. This was disclosed by Rachmat after signing of grant presentation contract with Uni-Europe-Indonesia TCF in Jakarta on Friday (4/11) while saying also that the project included trading area and investment policy, facilitation of investment and intellectual wealth, energy planning and technology innovations.

            The ministries and institutions who would receive this grant were those related to the program like Bappenas, Ministry of R & D, Coordinating Board of Management, Board of Technological Development BPPT. The Ministry of Energy and Mineral Resources, and the Ministry of Trade.

            Since 2001 total grant from uni Europe came to € 186.5 million consisting of 24 grant agreements. Today their were still six grant agreements which still in the process of offering.  

SMALL BUSINESS NEED GUIDANCE TO BE BANKABLE

          Micro, Small and Medium Business (UMKM) had proven their strength. Crisis blow did not make them surrender. Their resolution and ability to survive enabled them to stay tough. UMKM had the potential to contribute more national economic development so they must be nurtured in the proper way. Assistance from the banking sector for UMKM would make them develop and grow even bigger.

           

            The objective of nurturing was to step up managerial capability of UMKM businesspeople in handling the managerial aspects of business which were more complex with the capability to launch broader marketing campaigns and manage logistics and distribution more effectively, to expand business, to finance long term financing, to manage human resources and appraise performances. UMKM must also be more bankable, well organized, visionary, self reliant and has the potential to grow.

           

            The Secretary General of the Association of Indonesian Small Business Empowerment (IPKINDO) Andy Saputra Stated that he would be more focused on management training efforts and motivation for UMKM to enable them to access the banking system. Andy stated that promoting UMKM must be focused on enhancing motivation and management whereby to increase their capability that they be more business worthy and deserved bank’s assistance. “Our endeavor was just to nurture UMKM that they be more bankable” Andy was quoted as saying.

           

            According to Andy that they might survive, UMKM must be adaptive to environmental change. The change, he said, must be anticipate and handled well, because they were the key to business success, i.e. to keep abreast with changes, to be responsible to environmental change, market developments, consumers’ preferences etc.

           

            It was expected that UMKM development efforts would be sustainable, so that one day they might grow and elevate to higher class to be bankable. He further explained that bankable could be defined as a healthy company and pass as bank’s partner. That business might grow, the key word was will power, including the spirit to struggle hard.

           

            UMKM were true entrepreneurs beyond compare. For that matter, UMKM needed to step up product’s quality, income level, and to foster closeness to consumers, increase consumer’s satisfaction, and build strong branding. The primary thing, according to Andy, was how to enable UMKM to access credit for people’s business (KUR) and to ensure legality of their business premises which was one of the prerequirements for credit application.

            Andy stated that it was about time for the banking sector to give greater attention to continuity of UMKM. Financing for he linkages system was one of the efforts to revitalize the UMKM sector. The UMKM was today constantly growing, so the banks needs to facilitate them that they might expanse. The business prospect of UMKM was good. He was optimistic that the business potential of UMKM products was bright, it could even penetrate the global market. “So never fear that you would miss a market share” Andy remarked.

BANKS ASKED TO ANNOUCE MAXIMUM INTEREAST RATE

        Last week the Head Executive of Deposit Insurance Division Djaelani urged all insurance banks (LPS) to announce maximum and reasonable interest rate. As know LPS recently stipulated to lower maximum interest rate for Rupiah deposit from 7.25% to 7.00% (at retail l banks) and from 10.25% to 10.00% (at Bank Perkreditan Rakyat/BPR) and for forex deposit from 2.25% to 2.00% per year. The stipulation was effective as per October 12, 2011 until January 14, 2012. Firdaus added that LPS did not insure deposit whose interest rate exceeded reasonable level.

            According to Business News observation, most of the retail banks in Jakarta were reluctant to announce their natural interest rate applicable today; they only paste a notice at the entry door stating that the bank was a member of IPS deposit insurance bank.