Vice President Says Hardship Means Business


Vice President Jusuf Kalla expressed his optimism that the economy in Indonesia would improve in the next two to three years and encouraged entrepreneurs to invest now.

Bandung – Vice President Jusuf Kalla expressed his optimism that the economy in Indonesia would improve in the next two to three years and encouraged entrepreneurs to invest now. “The current conditions are quite difficult and it may continue on like this through next year. However, I am convinced that conditions will show improvement in the next two to three years,” said Kalla in his keynote address at the inauguration of the 7th Indonesian Chamber of Commerce and Industry (Kadin) national congress in Bandung on Monday. Investing during a less favorable time, he added, would be beneficial and dynamic entrepreneurs should see the situation as an opportunity. “Now is the time to invest as everything is cheaper. Building a factory now would definitely be cheaper compared to building in the next two or three years,” said Kalla. The government, continued Kalla, are very supportive of entrepreneurs willing to develop the manufacturing industry as this relates to urbanization, a shift in people from rural to urban areas in search of work. “The manufacturing industry could provide bigger job opportunities,” said Kalla before a crowd of 1,000 Kadin members. Based on Central Statistics Agency (BPS) data, slow economic growth would take place during the initial stage of the Joko “Jokowi” Widodo-Jusuf Kalla administration. BPS released economic growth figures for the second quarter of this year, shown at 4.67 percent, slightly lower when compared to the first quarter figure of 4.7 percent. In the third quarter, the economic growth was recorded at 4.73 percent, a slight increase compared to the second quarter. However, according to BPS, the figure was lower compared to the corresponding period last year, which stood at 4.92 percent. Based on BPS data, the numbers of underprivileged people in Indonesia have increased. In March this year, BPS recorded 28.59 million underprivileged people, 11.22 percent of the entire population. Kadin vice chair Shinta Kamdani said that if the government wished entrepreneurs to invest in the manufacturing industry, they would need to provide incentives. “This could be in the form of tax allowance and tax holiday,” said Shinta.

Since September, the government has released six economic stimulus packages as part of its efforts to revive the economy amid global economic downturn, which include fiscal incentives and the streamlining of licensing procedures for a wide range of industries. Meanwhile, outgoing Kadin chairman Suryo Bambang Sulisto said there needs to be synergy between the business world and the government so as to realize businesspeople’s expectations. The interest rate policy is currently regarded by entrepreneurs as being too high. Suryo cited Bank Indonesia’s interest rate of 7.5 percent as the highest and should be lowered. The government can also help entrepreneurs by not setting high interest rates for banks. “Kadin has proposed for the government to spearhead the move and not to ask for bank interest rates that are too high,” he explained. The 7th Kadin national congress, taking place from Monday to Tuesday, is the highest decision-making forum in the organization, in which participants will pick the chairman for the 2015-2020 period. Two contenders, former trade minister Rachmat Gobel and Kadin vice chairman for banking and financial affairs Rosan P. Roeslani, have expressed an interest in the top post. Both of them will run head-to-head, each looking to obtain a total of 132 votes.

Source: The Jakarta Post, November 24 2015

Rl-China Joint Venture to Build Smelter in South Sulawesi
Friday, 11 December 2015
By : The Jakarta Post - hits : 1083

Nickel miner PT Huadi Nickel Alloy Indonesia plans to kick off operation of a smelter in Bantaeng, South Sulawesi, which is slated to be the area’s first nickel processing facility.

Nickel miner PT Huadi Nickel Alloy Indonesia plans to kick off operation of a smelter in Bantaeng, South Sulawesi, which is slated to be the area’s first nickel processing facility.

The smelter, which may cost a total US$130 million by the final phase of development, will initially produce 50,000 tons of ferronickel each year, according to Huadi Nickel director Jos Stefan Hideky.


“To support our operation, we will source the raw material nickel ore from our own mine in Southeast Sulawesi,” he told The Jakarta Post on Wednesday after signing a power purchase agreement with power firm PT Bantaeng Sigma Energi on Wednesday.


The smelter’s output would be sent to the firm’s affiliate in China, Jos revealed.


Huadi Nickel is a joint venture between Shanghai Huadi Industrial Co. of China and local firm PT Duta Nikel Sulawesi. Huadi’s Chinese affiliate supplies stainless steel for multinationals like aircraft maker Boeing and automobile producer General Motors.


The advance phase of the smelter’s development will be continued in 2017 and 2019 until the facility reaches its full production capacity, according to the firm’s plan.


Huadi’s smelter is part of overall investment totaling up to Rp40 trillion ($3.17 billion) that Bantaeng Regency will receive in the next few years for nickel processing facilities and supporting infrastructure, such as power plants, seaports and water treatment installations, according to Bantaeng regent Nurdin Abdullah.


The smelter is set to occupy an area of 1,000 hectares in a 3,000-hectare plot provided by the local administration for the establishment of Bantaeng Industrial Park, planned to become Indonesia’s first integrated iron and steel industrial estate.


Indonesia, a major supplier of minerals including nickel and bauxite, has benefited from the government’s outright ban on exports of mineral ore and requirement for miners to process domestically since the beginning of 2014, seeing inflows of billions of dollars into mineral processing facilities.


In the agreement signed on Tuesday, PT Bantaeng Sigma Energi will provide electricity for smelters to four firms PT Huadi Nickel, PT Titan Mineral Utama, PT Zhongning Mining Metallurgy and PT Mitra Tambang Selaras, as well as energy resource supplier PT Mitra Selaras Sukses Sejahtera. The firm is constructing a 2x300 megawatt coal fired plant in the new industrial center.


Following Huadi’s step, another firm Chinese firm Zhongning Mining said that it would in the near future commence construction of a smelter in the same area.


“We have already cleared the land and may start very soon. The equipment will be installed by the end of the year,” said Zhongning Mining director Emir Yusuf.


The planned smelter would annually produce 120,000 tons of nickel pig iron at the initial stage of operation before reaching 600,000 tons when, after a few years, development was complete, he added.


The firm will obtain the raw material from a number of mines in Southeast Sulawesi, while the smelter’s output will be exported to buyers in China.

Source : The Jakarta Post, 17 January 2015

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