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Tag: Indonesia

  • BNI plans to set up subsidiary in Malaysia

    BNI plans to set up subsidiary in Malaysia

    State lender Bank Negara Indonesia (BNI) plans to set up a subsidiary in Malaysia this year after the two countries signed an agreement on reciprocity-based banking business.

    BNI is waiting for the holding company of state-owned companies in the banking sector to issue a policy, which is currently under process, BNI Director for Treasury and International Affairs Panji Irawan said at the Indonesia Stock Exchange here on Thursday.

    To set up the subsidiary, BNI is considering involving other state lenders, including Bank Mandiri and Bank Rakyat Indonesia, to shore up its business capacity and efficiency, he added.

    “Whoever is interested in it, can cooperate with us. We cannot do it alone,” he noted.

    In view of its financial capacity, BNI is likely to set up a subsidiary rather than establishing a branch office in the neighboring country, he revealed.

    “The subsidiary will not serve as a branch. It will be locally incorporated and must have a board of directors,” he explained.

    Under the Malaysian law, BNI must have a paid-up capital of US$66 million to US$75 million to set up the subsidiary, he informed.

    BNI President Director Achmad Baiquni wanted the bank to strengthen its network in the neighboring country in the first half of this year.

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  • XL Axiata swings back to profit in FY16

    XL Axiata swings back to profit in FY16

    Indonesia’s XL Axiata swung back to a 376 billion rupiah ($28.1 million) profit in 2016, as the company benefited from its $250 million tower sale and a stronger rupiah.

    The sale of 2,500 telecoms towers to local tower operator Protelindo, announced in March, helped the operator recover from a 25 billion rupiah loss the year before.

    But service revenue declined 4% to 19.19 billion rupiah due to the ongoing shift from legacy services to data. As a result of this rebalancing, data grew to account for 53% of the operator’s service revenue as of the fourth quarter, up from 35% a year earlier.

    Data traffic also surged to 515,304 terabytes, up from 196,341 terabytes a year earlier. The surge was driven by a 21 percentage point increase in smartphone penetration among XL’s subscribers to 63%, totalling 29 million customers at the end of FY16.

    During the fourth quarter, service revenue grew for a second consecutive quarter, albeit a slim 1% sequentially.

    XL Axiata’s results show that the company rolled out over 25,000 new base stations during the year, taking its total to 84,484 by the end of the year. Of these, 8,204 are 4G e-Node base stations, 38,731 are 3G node base stations and 37,549 are 2G sites.

  • Telkom Indonesia to launch third satellite this month

    Telkom Indonesia to launch third satellite this month

    Telkom Indonesia plans to launch a third satellite in less than two weeks as part of efforts to reduce its dependence on foreign satellites.

    The state-owned operator will launch the Telkom 3S from the Guiana Space Center on February 14. The satellite was constructed by Thales Alenia Space and will be launched abord Arianespace Europe’s Ariane 5 rocket.

    Once operational the Telkom 3S will carry 24 C band, 8 extended C band and 10 Ku band transponders. The satellite will substitute for the Telkom 3, which failed to reach orbit in 2012, and will take the orbital slot of the current Telkom 2.

    In turn the Telkom 2 will be moved to another orbit, and is expected to remain operational until 2021.

    The Telkom 1 and Telkom 2 satellites have a combined 140 transponders, but according to the report, Telkom said at least 300 transponders are needed to serve the operator’s consumer and business customers. The new Telkom 3S will cut down on the satellite capacity the company needs to source from foreign satellites.

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  • Japanese leasing firm expands in Indonesia

    Japanese leasing firm expands in Indonesia

    Mitsubishi UFJ Lease & Finance Company Limited (MUL) has announced its subsidiary in Indonesia, MULI, has opened a branch in Bandung, in a bid to capture new business as the country’s economy improves.

    The Bandung Branch is MULI’s second branch in Indonesia following the opening of its Surabaya Branch in October 2014. Since establishing a subsidiary in Jakarta in 1995, MUL has provided financing services focusing on mechanical equipment leasing and other activities for over 20 years.

    MUL says it aims to tap into growing demand in Indonesia, which is experiencing high economic growth in the ASEAN region, and expand the business opportunities. To this end, MUL is actively working to develop its business through such measures as acquiring an auto lease company, diversifying funding sources with the issuance of Indonesian rupiah-denominated notes, and providing asset management services that attract strong demand in Indonesia.

    Located about 150 km southeast of the capital Jakarta, Bandung, site of the latest branch, is the third largest city in Indonesia where the manufacturing and fiber/sewing industries are thriving. As a growing number of domestic and foreign companies are setting up their business there, growth is expected in the region. Through the establishment of the Bandung Branch, MULI will expand business bases in the West Java area and provide tailor-made services to meet the diverse needs of companies in Bandung and the surrounding areas.

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  • Southeast Asian ride-hailing firm Grab hires former Indonesian police chief

    Southeast Asian ride-hailing firm Grab hires former Indonesian police chief

    Southeast Asian ride-hailing firm Grab said on Monday (Jan 30) it has appointed Indonesia’s former national police chief to oversee corporate governance and long-term plans for its biggest market.

    Grab said it plans to expand to more cities in Indonesia, grow its transport services and invest in a mobile payments platform.

    Badrodin Haiti, who was Indonesia’s chief of the National Police from April 2015 to July 2016, “brings extensive experience working with government stakeholders and ensuring aligned interests among different stakeholders,” the company said in a statement.

    Grab and its competitors, Uber of the United States and homegrown company Go-Jek, have faced regulatory obstacles in Indonesia.

    The government has ordered ride-hailing service providers to pass vehicle safety tests and get local partners, among other conditions.

    “As the technology and ride-hailing sectors evolve in Indonesia, Mr. Haiti will play a guiding role to ensure Grab contributes constructively to the implementation of new transport regulations and safety guidelines,” Grab said.

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  • Indonesian govt to embrace IoT

    Indonesian govt to embrace IoT

    By 2019, 20% of local and regional governments in Indonesia will use IoT devices to turn infrastructure like roads, street lights, and traffic signals into assets instead of liabilities, IDC predicts.

    This year, however, it said 90% of Indonesian cities will fail to take full advantage of smart city data and digital assets due to a lack of process, project management, and change management skills.

    “In Indonesia, digital transformation is still not adequately represented within the enterprise, and this disparity in leadership will lead towards a delayed response towards market changes that will adversely impact business,” IDC Indonesia country manager Sudev Bangah said.

    Timing is critical, and archaic thinking of riding out trying economic times is no longer relevant and should be addressed with process-led innovation.”

    These insights are among the top technology predictions announced recently by IDC Indonesia at the IDC FutureScape Media Briefing.

    The research firm highlighted that digital transformation will attain macroeconomic scale over the next two to three years in the country, changing the way enterprises operate and reshaping the global economy. IDC calls this as the dawn of the “DX Economy.”

    “As digital transformation reaches macroeconomic levels, a DX economy will emerge and will become the core of what industry leaders do and operate,” IDC Indonesia research manager for consulting Mevira Munindra said.

    “Essentially, to succeed, Indonesian enterprises must begin to think of the relevancy of their business in 10 years, and how they should react in the face of disruptive forces.”

    In the enterprise sector, IDC’s predictions are as follows:

    1. By 2019, 50% of IT organizations will create new customer-facing and ecosystem-facing services to meet the business DX needs.
    2. By 2018, lack of vision, credibility, or ability to influence will keep 80% of IT executives from attaining leadership roles in enterprise DX.
    3. By 2020, Indonesian firms will use open innovation to allocate expertise to 15% of new projects, aiming to increase their new product introduction success rates by over 50%.
    4. By 2020, nearly 20 percent of operational processes will be self-healing and self-learning — minimizing the need for human intervention or adjustments.
    5. By 2018, online brand ambassadors and social media influencers will have more marketing power than traditional digital advertising, yet this will subside through 2019 and beyond.
    6. By 2019, digital transformation investments will double, drawing funds away from store capital and profoundly changing the retail industry.
    7. By 2019, only 30% of manufacturers investing in digital transformation will be able to maximize the outcome; the rest will be held back by outdated business models and technology.
    8. By 2019, cloud adoption will reduce infrastructure spend by 25% among top-tier banks.
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  • China interested in establishing direct flight to West-Java

    China interested in establishing direct flight to West-Java

    The Executive Director of PT Bandara Internasional Jawa Barat, Virda Dimas Ekaputra, said that the Chengdu administration of China has stated its interest in establishing direct flight to Kertajati Airport of West Java Province.

    “They were excited when they knew that the West Java administration was to build a new international airport in Kertajati of Majalengka District,” Ekaputra said here on Tuesday.

    According to the director, the Chengdu administration has proposed the direct flight to Soekarno-Hatta Airport of Tangerang City.

    However, Soekarno-Hatta Airport could not accept their proposal due to the flight slot being full.

    Ekaputra stated that all ASEAN countries, except Indonesia, have maintained connection of their cities with Chengdu.

    He hoped that the establishment of the airport in West Java Province could develop the tourism sector in the area.

    Thus, the company will cooperate with West Java Cultural and Tourism Service to promote tourism in the region.

    “West Java would be one of the tourism destinations. The development would contribute to achieve 20 million foreign tourists,” Ekaputra added.

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  • BRI posts net profit of Rp25.8 trillion

    BRI posts net profit of Rp25.8 trillion

    State-owned lender Bank Rakyat Indonesia (BRI) last year posted a net profit of Rp25.8 trillion, up 2.18 percent from a year earlier.

    The profit growth was attributable to the banks prudential efforts as indicated by a rise in the ratio of reserves to non-performing loans to 170.53 percent in 2016 from 151 percent in 2015.

    The 2016 income was mostly contributed by fee-based income which grew 25.2 percent to Rp9.2 trillion, BRI President Director Asmawi Syam said in a press conference here on Tuesday.

    Meanwhile, net interest income increased 16.2 percent to Rp65.7 trillion, he added.

    “The interest income was fueled by credit growth which reached 13.8 percent or Rp635.3 trillion,” he said.

    BRI Vice President Director Sunarso said the banks net profit grew only 2.18 percent as it adopted prudential principles amidst economic downturn and an upward trend of the banking industrys non-performing loans.

    “The profit did not fall short of target. It continued to grow positively,” he said.

    By adopting the prudential principles, the bank managed to keep down its non-performing loan ratio in 2016 to 2.03 percent from 2.02 percent (gross), while its reserve ratio rose to 170 percent from 151.5 percent.

    He said the banks loan-to-deposit (LDR) ratio reached 87.7 percent and its capital adequacy ratio (CAR) stood at 22.9 percent.

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  • Indonesia Eximbank to boost SME exports

    Indonesia Eximbank to boost SME exports

    State-owned Indonesia Eximbank will play a pivotal role in boosting small and medium enterprise (SME) exports through export based people’s business credit (Kurbe) and an incubator program.

    Indonesia Eximbank acting president director Suswijono Moegiarso said it already disbursed Rp 1 trillion (US$74.95 million) Kurbe in 2016, a cross subsidy between big debtors and SMEs.

    For 2017, the Financial Service Authority (OJK) has recommended the bank to the Economic Coordinating Ministry for channeling government’s Kurbe, he said.

    “The Kurbe will help boost SMEs exports this year, we are really thankful to OJK for the recommendation,” Suswijono said during the Export Purposed Import Facility (KITE) event in Tumang Village, Boyolali, Central Java, on Monday.

    There are five SMEs that already have Kurbe from the Eximbank with a total value of Rp 13.3 billion, namely UD Daffi Art,  CV Inducomp, CV Yudhistira, PT Banyan International and PT Bali Tangi.

    Those five SMEs also have a KITE import facility from the customs office.

    The bank would also provide mentoring and an incubation program for the export oriented SMEs called coaching programs for new exporters (CPNE).

    Indonesia Eximbank managing director Indra Wijaya Supriadi said that in 2016 the program already created five export oriented SMEs. “These SMEs successfully exported modified cassava flour (mocaf), broomsticks, room insulators, catfish fillets and frozen beef,” Indra said.

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  • Garuda Indonesia to operate Boeing B-737-800 to serve Sorong-Jakarta route

    Garuda Indonesia to operate Boeing B-737-800 to serve Sorong-Jakarta route

    Garuda Indonesia will operate Boeing 737-800 to serve Sorong-Jakarta route, in order to increase its service to the people in Papua.

    The state-owned airline company’s Sorong sales manager Radhitya Prastanika said here on Monday that the service is scheduled to begin early in April.

    He stated that Garuda Indonesia wished to support the government in opening an easier access to Raja Ampat tourist destination by operating the wide-body aircraft.

    “We are now waiting for an official letter from the security authorities of Sorongs Domine Eduard Osok airport regarding the safety of the airport for the landing of the aircraft,” he remarked.

    He noted that Boeing 737-800 has 162 seats, consisting of 150 seats in the economy and 12 seats in the business class.

    “Garuda Indonesia wishes to provide comfort to people in Sorong by providing a Boeing aircraft and adequate facilities,” he added.

    He said Garuda Indonesia plans to increase the number of planes and new routes to Papua and West Papua provinces this year.

  • Bank Indonesia warns illegal money changers to apply for license

    Bank Indonesia warns illegal money changers to apply for license

    Bank Indonesia (BI) has warned unlicensed non-bank money changers to apply for a license during the ongoing transition period as a requirement to operate legally.

    The central bank has imposed the transition period since Oct. 6 last year when it issued a regulation and circular concerning the licensing requirement. The unlicensed money changers were given until April 7 to submit applications.

    BI will work together with the National Police, the Financial Transaction Reports and Analysis Centre (PPATK) and the National Narcotics Agency (BNN) to crack down on illegal money changers that fail to comply with the regulation after the transition period ends.

    “Applicants need only to submit a written application attached with several documents to Bank Indonesia. It is free of charge,” said BI executive director of payment system policy and supervision Eni V. Panggabean in a press briefing on Monday.

    Money changers, formally called non-bank foreign currency exchange businesses, comprise transactional activities related to currency exchange through a trading mechanism of foreign currency banknotes as well as the purchase of traveler’s checks.

    “One of the requirements for non-bank money changers to apply for a license is to become a limited company that should be fully owned by Indonesian citizens,” Eni said.

    The central bank’s warning came following findings by the National Police, the PPATK and the BNN regarding the rising trend of money laundering activities involving illegal money changers, which were used for transactions related to graft, narcotics and terrorism.

  • Garuda Indonesia Focused on Contract Renegotiation, GCG

    Garuda Indonesia Focused on Contract Renegotiation, GCG

    The national flag carrier Garuda Indonesia Airlines has continued to focus on renegotiating contracts and implementing Good Corporate Governance (GCG), despite an alleged involvement of the airline’s ex-president Emirsyah Satar in aircraft engine purchase graft case. “It doesn’t interfere because Garuda had been focusing on GCG, contract renegotiation and cost efficiency since the last two years,” President and CEO of PT Garuda Indonesia Tbk Arif Wibowo said here on Tuesday.

    The airline had conducted major renegotiation of contracts, including the contract on airplane procurement from 2004 to 2014, a period during which Satar ran the enterprise, Wibowo added. “If the graft case is proven, it would be a good lesson for the management,” he noted.

    The contract renegotiation has resulted in a major cost efficiency for the company, he pointed out, adding that Garuda has redesigned its fleet plan every 10 years.

    “Now we are focused on how the three cost components, namely leasing cost, insurance cost and maintenance cost could be renegotiated,” Wibowo remarked. Minister of State-owned Enterprises expected Garuda Indonesia to have high integrity and good corporate governance in its operation.

    “These have become our foundations in running the enterprise,” he added. Earlier, the Corruption Eradication Commission (KPK) had named Satar as a suspect in the graft case.

    Satar had allegedly received 1.2 million euros and US $180,000, or a total of Rp20 billion, in bribes. He also received goods worth $2 million in Singapore and Indonesia from the UK-based manufacturing giant Rolls Royce for the purchase of 50 Airbus SAS aircraft engines during the period from 2005 to 2014 for PT Garuda Indonesia Tbk.

  • Indonesia eyeing slice of Singapore’s market

    Indonesia eyeing slice of Singapore’s market

    The government and state owned enterprises have sent a strong signal that they will strengthen the role of Tanjung Priok Port as an international trade hub, taking over a slice of the transshipment market currently dominated by Singapore.

    Transportation Ministry Director General for Sea Transportation Antonius Tonny Budiono said the government and state-owned port firms, Pelindo I, II, III and IV, were discussing the so-called Indonesia Integrated Chain Port plan, which would consolidate the export of cargoes from various domestic ports nationwide, including Bitung Port in North Sulawesi and Sorong Port in West Papua, with the country’s busiest port.

    Such consolidation is aimed at making the transshipment more efficient and “attractive” for both local and global shipping lines.

    “The transshipment sector has long been dominated by Singapore. But If the commodities originate in our country, why can’t we handle them?” he said over the phone on Tuesday.

    Tonny said the ministry would prepare technical and regulatory matters for the system, while also laying out the business plans with the State-Owned Enterprises (SOE) Ministry.

    The system, including IT management, is set to become effective in the second half of this year.

    “It’s already settled. The only remaining concern is the business plans of each Pelindo,” Tonny said, claiming that infrastructure-wise, Tanjung Priok was ready to play a bigger role as an international hub.

    The ministry sparked controversy when it recently revised the national ports plan (RIPN) through Transportation Ministerial Decision No. KP 901/2016 and introduced Tanjung Priok as the country’s new international port hub in Indonesia.

    Deep-sea Patimban Port in West Java, construction of which is being carried out jointly by an Indonesia-Japan consortium, is set to complement the future hub.

    Tanjung Priok Port has long been Indonesia’s largest container port, handling more than half the country’s externally traded goods.

    It received an annual 1.5 million total equivalent unit (TEU) capacity boost for imports and exports with the operation of the New Priok Container Terminal 1 ( NPCT1 ) last September, from the previous 7 million TEU capacity.

    Its container traffic rose to 5.4 million TEUs last year from 5.2 million TEUs in 2015.

    Of that figure, international traffic represented 3.8 million TEUs in 2016, up from 3.7 million TEUs in the previous year.

    The Transportation Ministry has anticipated a 11.1 percent surge in freight traffic in the country’s ports to 929.8 million tons annually by 2020, from 836.5 million tons annually in 2015. The figure is expected to jump to 1.1 billion tons each year by 2030.

    However, Port of Singapore is the one to beat as its container terminal handled 30.59 million TEUs of containers in the past year alone. The port, also dubbed the world’s busiest transshipment hub, currently accounts for almost one seventh of the world’s total container transshipment throughput.

    The maritime industry also currently contributes about 7 percent to Singapore’s GDP.

    Pelindo II president director Elvyn G. Masassya said the operational details would be discussed next week.

    “We aim for it to be efficient, productive and competitive,” he said.

    Pelindo II published data that forecast a Rp 1.5 million (US$112.59) cost-saving for transshipment from Boom Baru Port in Palembang, South Sumatra, via Tanjung Priok, and even Rp 1.6 million from Trisakti Port in Banjarmasin, South Kalimantan, compared to via Singapore.

    In response to the plan, publicly listed shipping line Samudera Indonesia managing director Bani M. Mulia expressed his pessimism, citing the geographical location of Jakarta.

    “As shippers we’d be happy if Jakarta could be a hub, but just be realistic. How much time deviation will containers have if they must pass through Jakarta first before going to Europe or China? It just doesn’t make sense,” he stressed.

    Bani said the government should focus on increasing Tanjung Priok capacity for export and import activities as well as enhancing its efficiency amid existing problems like labor costs.

  • Mercedes-Benz begins local assembly of CKD E-Class

    Mercedes-Benz begins local assembly of CKD E-Class

    Mercedes-Benz Distribution Indonesia (MDI), the local distribution arm of German car manufacturer Daimler AG, launched on Tuesday the fifth generation of its mid-size luxury sedan E-Class.

    The sedan is assembled from the completely knocked-down (CKD) version in its Wanaherang plant, following an earlier move to introduce the completely built-up (CBU) version last August.

    MDI president director Roelof Lamberts said the local production of the E-Class was expected to help boost sales of the model in Indonesia.

    “The E-Class contributed to a quarter of our sales last year. We hope with the new generation, this contribution can be increased to a third of total sales this year,” he said during the launch ceremony.

    MDI last year saw its sales rise slightly by 3 percent to 3,371 vehicles.

    The pricing of the new model will be listed at the upcoming auto show in April, Lamberts added.

    Currently, the CBU version of the E-Class is sold for Rp 1.3 billion (US$97,600) per vehicle.

    There are two types of CKD E-Class vehicles that will be introduced into the domestic market, namely the luxury E-250 Avantgarde and the sportier E-300.

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  • Trump’s 6-Star Bali Hotel Project Meets Resistance

    Trump’s 6-Star Bali Hotel Project Meets Resistance

    The lands and waters we now know as Indonesia used to be under the influence of Hindu empires (prior to the expansion of Islam in the Archipelago after the 1200s). However, on most Indonesian islands this Hindu chapter has been erased, either by time or conquest, from the Archipelago’s history. The only exception being the island of Bali. Until today most inhabitants on this resort island (known as ‘island of the Gods’) practice Balinese Hinduism (and its rituals and art also form reasons for foreign tourists to visit this island).

    In Balinese Hinduism the worshiping of gods plays a central role. Not only the traditional Hindu gods (Brahma, Vishnu and Shiva) are worshiped but also a range of other deities. These gods need to be respected fully (like in monotheistic religions). One of the local rules is that buildings are not allowed to be taller than the highest (nearby) coconut tree. If this rule is ignored, then it would anger the gods. This is one of the key issues surrounding the Trump Organization’s new 6-star hotel project in Bali’s Tabanan regency.

    The Trump Organization and its Indonesian partner business tycoon (MNC Group founder) Hary Tanoesoedibjo acquired an existing hotel (the 20-year-old Pan Pacific Nirwana Bali Resort) about two years ago. This resort is located nearby the Pura Tanah Lot temple. The structure of the existing property is, in line with local beliefs, not taller than the surrounding coconut trees. However, the Trump Organization “thinks big” and wants to expand the existing structure by building a tower with ocean view and an upgraded golf course.

    Besides the height, another issue is the additional land that is required. The MNC Group said the project requires about 34 hectares of additional land. Surrounding the existing property there is only farmland, implying local farmers need to sell it to the developers. However, based on information in local media few farmers want to sell their land. Moreover, according to local beliefs land nearby temples cannot be used for the purpose of leisure (such as a golf course). On the eastern side of the existing golf course there stands a small temple and therefore local people do not want to see an upgraded (expanded) golf course.

    Land acquisition is always a costly and time-consuming affair in Indonesia. The property, which will be named the Trump International Hotel and Tower Bali, would become the most luxurious resort on Bali. Construction is planned to start in early 2018.

    Meanwhile, I Gusti Ngurah Sudiana, Chief of Parisada Hindu Dharma Indonesia (Indonesia’s largest Hindu organization), is against any property development that would impact on the 16th century Hindu pilgrimage temple Pura Tanah Lot, a UNESCO-listed World Heritage Site.

    Hary Tanoesoedibjo’s MNC Group, however, said the height of the planned property on Bali is not yet determined.

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