2018 EXPLORING NEW SOURCES OF GROWTH IN SOUTHERN PART OF WEST IN ORDER TO ENHANCING INVESTMENT AND ECONOMIC GROWTH

40

Area : 35.377,76 km2 Coordinates : 6o45’S 107o30’E Topography : Lowlands, Mountains, & Coasts

Populations : 48,037,83 (2017) Density : 1,358 people per sq km (2017) Productive age : 32.67 million (age 15-64) -2017 Min. Wage Rate : USD 120.24 – USD 301.56 (2019)

Governor : Moch. Ridwan Kamil Vice Governor : Uu Ruzhanul Ulum Capital City : City Regencies/Cities : 18 Regencies and 9 Cities

48,03 M 24% 13,09% 19% 12,9% Economic Growth of All Provinces in Java National and West Java Economic Growth (yoy) 8.0 West Java National 5.50 6.0

4.0 5.18

2.0

0.0 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 2013 2014 2015 2016 2017 2018 Top Sectors with Highest Contribution to GRDP (as of Q4-2018) AGRICULTURE MANUFACTURING 7% 43% In Q4-2018, West Java economic growth slightly 13.49 declined to 5,50% (yoy). However, such growth was 7.24 6.55 6.84 5.40 still stronger than national performance at -0.54 -0.16 -0.34 Q1-2018 Q2-2018 Q3-2018 Q4-2018 5,18% (yoy). West Java growth in Q4-2018 was Q1-2018 Q2-2018 Q3-2018 Q4-2018 supported by sharp growth of over 10% in TRADE & RETAIL CONSTRUCTION agriculture, robust construction growth as well as 15% 9% consistent performance in manufacturing industry 5.06 4.92 9.28 3.85 3.03 6.81 6.91 7.13 and trade & retail.

Q1-2018 Q2-2018 Q3-2018 Q4-2018 Q1-2018 Q2-2018 Q3-2018 Q4-2018 In February 2019, West Java CPI recorded a deflation at 0,05% (mtm), increased compared to infation in the month earlier of 0,33% (mtm). Consequently, on annual basis, CPI inflation stood at 2,61% (yoy), still within the national target corridor of 3,5±1% (yoy). CPI inflation remained controlled within the target as supported by deflation in administered prices and also volatile food. Inflation of All Provinces in Java Core inflation in February 2019 remained under control at a low level, both monthly and annually which was recorded at 0,26% (mtm) and 3,46% (yoy) accordingly.

Administered prices in February 2019 experienced deflation of 0,05% (mtm), increased from deflation in the previous month of 0,51% (mtm). In annual terms, AP inflation was recorded at 2,31% (yoy).

Volatile food in February 2019 was recorded a deflation at 1,05% (mtm). In National and West Java Inflation annual terms, the VF inflation was % (yoy) West Java National recorded very low at 0,13% (yoy), 8.0 significantly decreased from 1,66% (yoy) in the month earlier. 6.0

4.0 Inflation in February 2019 was supported by commodities in core inflation that 2.0 2.57 include residential rental and train cost. 0.0 While the deflation was boosted by food 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 commodities, including egg, shallot, and 2015 2016 2017 2018 2019 red chili. • Since 2013, West Java keeps an outstanding record of positive net exports over the years. Up until the end of 2018, West Java foreign trade balance continues to record positive net exports, supported by the strong export growth and decreasing import growth. • West Java exports were supported by 5 (five) main sectors which are: Manufacturing, Textile, Electronics, Rubber and Plastics as well as Automotive. Growth in Exports of Goods % (yoy) % (yoy) USD billion USD billion Positive Net Exports over the Years 200% Manufacturing (rhs) Textile 40% 4.67 5.0 Electronics Rubber & Plastics 8.0 30% 4.5 150% Automotive 7.0 4.0 7.51 20% 6.0 3.5 100% 5.0 3.0 7.0% 10% 4.0 2.5 50% 2.84 2.0 0% 3.0 1.5 2.0 0% -10% 1.0 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II 1.0 0.5 -50% 2012 2013 2014 2015 2016 2017 2018 -20% 0.0 0.0 %60 (yoy) I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV Total Export USA 2013 2014 2015 2016 2017 2018 40 Europe ASEAN Surplus/Deficit (rhs) Export Import 20 • West Java export in Q4-2018 decreased by 6,8% (yoy). Its import 3.85 was also in downward trend by 4,9% (yoy). These events led to 0 slightly decreasing growth in West Java net export by 7,9% (yoy). -0.69 -20 • Based on country of destination, exports to most of major trading I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV partners were in downward trend, except USA. 2013 2014 2015 2016 2017 2018 The average minimum wage in West Java for the periodof 2019 of 2019 is around2.731.081,49 Rp.2.731.081 (USD (USD 194.52) 194,52) per permonth. month. has the highest wage with Rp.4.234.0104.234.010,27 (USD (USD 301.56) 301,57) per per month month.. Banjar City has the lowest wage withrate withRp. 1.688.217,52 Rp.1.688.217 (USD (USD 120,24) 120,24) per permonth. month .

Minimum Wage Rate per Month City/Regency In IDR In USD* 4.234.010 301,57 City 4.229.756 301,26 4.146.126 295,31 City 3.872.551 275,82 City 3.842.785 273,70 3.763.405 268,05 Regency 3.722.299 265,12 Bandung City 3.339.580 237,86 Industrial zones & West 2.898.744 206,46 Regency 2.893.074 206,06 big cities have the Bandung Regency 2.893.074 206,06 highest wage rate City 2.893.074 206,06 Regency 2.791.016 198,79 2.732.899 194,65 2.336.004 166,38 Sukabumi City 2.331.752 166,08 Regency 2.117.713 150,83 City 2.086.529 148,61 2.075.189 147,81 City 2.045.422 145,69 2.024.160 144,17 1.807.285 128,72 Regency 1.791.693 127,61 Regency 1.734.994 123,58 1.733.162 123,44 1.714.673 122,13 Banjar City 1.688.217 120,24 *) USD/IDR Exchange Rate per March 1st , 2019: USD 1 = Rp.14.040.00 Data as of December 2017 Bekasi City HDI : 80,30% WEST JAVA Population : 2,85 million Bandung City Depok City Eco growth : 6,63% HDI : 70,69% HDI : 80,31% Population : 48,03 million HDI : 79,83% Population : 3,65 million Population : 2,25 million Eco growth : 7,79% Eco growth : 5,29% Eco growth : 7,28%

Cirebon City HDI : 74% Population : 313.330 Eco growth : 5,95%

Bogor City HDI : 75,16% Sukabumi City Population : 1,01 million HDI : 73,03% Eco growth : 6,13% Population : 323.790 Tasikmalaya City Eco growth : 5,3% HDI : 71,51% Population : 661.400 Eco growth : 5,99% Resume of Banking Indicators – Conventional Commercial Banks in West Java By the end of 2018, West Java Loan-to-Deposit Ratio increased to 95,2% (yoy) while its credit growth slightly decreased to 12,1% (yoy). Furthermore, the NPL growth declined to 2,34% (yoy), accompanied by strong asset growth at 7,5% (yoy). Sectors with biggest credit share in West Java are Trade and Retail as well as Manufacturing industry. Rp trillion Asset Growth Rp trillion NPL Growth 5,358 12000 9,953.620% 6000 4% 9000 15% 3% 4000 7.5% 6000 10% 2.34%2% 2000 3000 5% 1%

0 0% 0 0% I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 Total Asset Growth (rhs) Loan (by Location) NPL (rhs) Credit Share by Sector 30% LDR Development 100% 95.2% Trade & Retail 27.7% 95% Manufacturing 23.1% 20% Business Services 14.9% 12.1%90% Agriculture 9.4% 10% Construction 8.1% 85% Transportation &… 6.5% 5.6% 0% 80% Electricity, Gas, and Water 4.4% I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV Mining & Quarrying 3.6% Social Services 3.1% 2013 2014 2015 2016 2017 2018 0% 5% 10% 15% 20% 25% 30% Loan to Deposit Ratio (rhs) Credit Growth TPF Growth Resume of Banking Indicators – Sharia Commercial Banks in West Java By the end of 2018, West Java asset growth slightly increased to 8,2% (yoy), accompanied by significantly declining NPF to 2,35% (yoy). Furthermore, West Java Finance-to-Deposit Ratio decreased to 89,55% while its SME Share to Total Finance is relatively stable at around 21,7%. Rp trillion Rp trillion NPF Development (%) 60 Asset Growth 50% 49.99 40 34.37 8 50 40% 30 6 40 30% 30 20 4 20% 20 8.2% 10 2 10 10% 2.35 0 0% 0 0 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 Total Asset Growth (rhs) Finance (by Location) NPF (rhs)

Rp trillion Rp trillion (%) SME Development 60 FDR Development 120 40 34.3740% 89.55 90 30 30% 40 38.38 21.7% 60 20 20% 34.37 20 30 10 10% 11.33 0 0 0 0% I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 Finance to Deposit Ratio (rhs) Total Finance Total Deposit SME Share (rhs) Total Finance SME Finance West Java economic growth in 2018 was 5,5%, West Java inflation in 2018 was 3,54% (yoy), which which was in line with Bank projection. was still within the national target of 3,5±1%. In 2019, West Java economic growth is estimated Moreover, West Java inflation in 2019 is expected to will be in the range of 5,3% - 5,7%. This projection is be maintained within the 2019 inflation target of in line with the increase in investment and 3,5±1%, supported by strong policy coordination household consumption as well as fiscal stimuli between Bank Indonesia and the central as well as from the central Government. provincial governments.

5,35.7 – 5,7* 3.63 3,5 ± 1 5.5 3.54 5.29 3.5

2017 2018 2019 2017 2018 2019

*) Bank Indonesia projection

National Foreign Direct Investment Realization (January – December 2018)

Investment West Java No Location Project 19.02% (USD Million) Special Territory 1 West Java 5.573,5 4.713 of 42.12% 2 Special Territory of Jakarta 4.857,7 6.499 3 Banten 2.827,3 1.895 16.57% 4 Central Java 2.372,7 801 East Java 5 East Java 1.333,4 1.441 9.65% 6 Others 12.343,3 6.623 8.10% Others TOTAL 29.307,9 21.972 4.55%

National Domestic Direct Investment Realization ( January – December 2018)

Special Territory Investment of Jakarta No Location Project 14.94% (IDR Billion) West Java 1 Special Territory of Jakarta 49.097,4 666 East Java 45.79% 12.87% 2 West Java 42.278,2 1.661 Central Java 3 East Java 33.333,1 1.679 10.14% 4 Central Java 27.474,9 1.478 East Kalimantan 5 East Kalimantan 25.942,0 309 8.36% 19 7.89% Others 6 Others 150.479,3 5.022 TOTAL 328.604,9 10.815 18 No. of Labor Absorption Investment Value No. Location Projects (people) (USD) 1 Bekasi Regency 3.622 16.485 2.914.675.000 TOP 5 LOCATIONS 2 Karawang Regency 1.178 7.797 868.322.200 3 419 1.773 434.966.000 BASED ON FDI VALUE 4 Bogor Regency 734 3.025 369.755.300 5 Cirebon Regency 125 1.047 286.642.900 Cirebon 6 Bekasi City 446 935 275.948.300 Others Regency 7 56 3.797 91.095.600 12% Bekasi 5% 8 Subang Regency 118 11.317 76.510.700 Bogor Regency 9 71 235 57.453.400 Regency 52% 10 198 16.428 45.842.700 7% 11 Depok City 120 947 34.550.100 12 Bandung Regency 179 743 28.165.200 13 Bogor City 68 43 20.336.500 14 Bandung City 198 1.585 20.079.100 Purwakarta 15 Garut Regency 46 16 12.724.500 Regency 16 27 200 8.632.000 8% 17 83 3.316 8.047.400 18 Tasikmalaya Regency 28 0 5.512.400 Karawang 19 28 136 5.116.100 Regency 20 Cianjur Regency 56 291 3.058.600 16% 21 Cirebon City 23 494 2.900.600 22 Cimahi City 46 68 2.202.700 23 Pangandaran Regency 3 9 900.000 24 Sukabumi City 6 5 69.400 25 Ciamis Regency 5 17 13.400 20 26 Banjar City 5 0 0 27 Tasikmalaya City 5 0 0 Source: DPMPTSP of West Java Province Total 7.893 70.709 5.573.520.100 No. of Labor Absorption Investment Value Top 5 Sectors based on No. Sector Projects (people) (USD) 1 Residences, Industrial Area, and Offices 420 1.275 1.243.749.000 Foreign Direct Investment Value 2 Metal, Machine, and Electronic Industries 1.371 7.706 1.030.908.800 3 Automotive and Other Transportations 1.059 12.795 862.827.600 Residences, Industrial Area 4 Warehouse and Communication 142 370 400.883.200 & Offices 5 Electricity, Gas, and Water 54 209 351.733.700 6 Chemical and Pharmaceutical Industries 550 946 318.110.400 22,32% 7 Non-metal Mineral Indusries 148 1.667 225.433.700 Metal, Machine & 8 Paper and Printing Industries 152 1.180 209.267.400 Electronic 9 Food Industries 406 2.761 202.884.700 2124 10 Rubber and Plastic Industries 531 4.034 194.308.600 18,50% 11 Textile Industries 642 17.170 140.398.200 12 Other Services 338 427 111.031.300 Automotive & Other 13 Trading and Repairs 1.174 1.069 70.030.100 Transportation 14 Leather Goods and Footwear Industries 113 16.252 69.929.900 15 Other Industries 202 946 69.735.600 15,48% 16 Farming 97 441 35.211.900 17 Hotel and Restaurant 314 703 12.360.700 Warehouse & 18 Wood Industries 38 122 8.904.200 Communication 19 Construction 52 122 6.779.200 20 Agriculture and Plantations 14 14 3.816.300 7,19% Medical Instruments and Watches 21 12 5 2.296.300 Industries Electricity, Gas & Water 22 Mining 34 2 1.577.900 23 Fisheries 14 483 1.220.700 6,31% 24 Forestry 16 10 120.700 Total 7.893 70.709 5.573.520.100 Source: DPMPTSP of West Java Province 4 Netherlands USD 334.6 million 3 South Korea USD 863.9 million

1 Japan USD 1.75 billion

2 Singapore Malaysia USD 1.53 billion 5 USD 205 million

Others 15.9% Total Investment Value Malaysia 3.7% USD 5.57 billion (IDR 74.69 trillion) Netherlands 6.0% South Korea 15.5% Number of Projects 22 Singapore 27.5% 7,893 projects Japan 31.4% Labor Absorption 0.0% 10.0% 20.0% 30.0% 40.0% 70,709 people No. of Labor Absorption Investment Value No. Location Projects (people) (IDR) TOP 5 LOCATIONS 1 Bekasi Regency 816 7.953 15.000.981.300.000 2 Majalengka Regency 15 6.006 4.326.832.000.000 BASED ON DDI VALUE 3 Bogor Regency 416 10.466 3.733.241.000.000 4 2.716 Karawang Regency 245 3.199.799.800.000 Bekasi 5 2.201 Bogor City 136 2.830.906.300.000 Others Regency 6 8.997 Bandung Regency 243 2.757.558.500.000 31% 35% 7 Bekasi City 138 7.953 2.674.864.900.000 8 Bandung City 169 623 2.128.593.100.000 9 Depok City 50 886 1.264.321.800.000 10 Sumedang Regency 30 5.655 998.334.900.000 11 Cirebon Regency 35 268 971.675.100.000 12 Cirebon City 31 2.669 523.080.500.000 13 Subang Regency 23 588 519.039.800.000 Bogor 14 Sukabumi Regency 58 900 351.704.700.000 City 15 Purwakarta Regency 77 911 344.236.500.000 7% Majalengka 16 Cimahi City 63 642 144.719.500.000 Karawang Bogor Regency 17 Cianjur Regency 9 79 143.341.100.000 Regency Regency 10% 18 Garut Regency 20 927 116.482.700.000 8% 9% 19 Indramayu Regency 12 82 110.867.400.000 20 West Bandung Regency 35 212 43.738.100.000 21 Tasikmalaya Regency 18 0 43.585.300.000 22 Kuningan Regency 7 84 34.738.700.000 23 Pangandaran Regency 1 86 15.500.000.000 24 Ciamis Regency 1 2 70.000.000 25 Sukabumi City 6 0 0 2320 26 Tasikmalaya Regency 2 0 0 27 0 Banjar City 0 0 Source: DPMPTSP of West Java Province Total 2.656 54.478 42.278.213.000.000 No. Sector No. of Labor Absorption Investment Value Top 5 Sectors based on Projects (people) (IDR) 1 Construction 63 1.948 10.191.006.000.000 Domestic Direct Investment Value 2 Warehouse and Communication 86 703 7.785.853.800.000 3 Electricity, Gas, and Water 59 1.494 5.139.291.300.000 4 Food Industries 318 19.885 4.573.682.700.000 Construction Chemical and Pharmaceutical 5 329 2.926 3.820.372.400.000 Industries 24,10% Residences, Industrial Area, and 6 155 682 3.763.136.600.000 Offices Metal, Machine, and Electronic 7 342 3.631 2.501.970.100.000 Warehouse & Industries Communication 8 Textile Industries 273 8.178 866.559.500.000 9 Other Services 123 2.285 744.626.400.000 10 Non-metal Mineral Indusries 69 1.628 613.477.200.000 18,42% 11 Trading and Repairs 193 1.785 496.102.800.000 12 Rubber and Plastic Industries 192 2.204 489.747.800.000 Electricity, Gas & Water 13 Hotel and Restaurant 139 279 260.993.000.000 14 Paper and Printing Industries 113 1.466 252.848.600.000 Automotive and Other 12,16% 15 70 2.375 237.441.000.000 Transportations 16 Other Industries 61 1.266 164.145.500.000 17 Mining 11 124 146.913.600.000 Food Industries 18 Farming 30 137 145.202.000.000 Leather Goods and Footwear 47.490.600.000 19 12 601 Industries 10,82% 20 Wood Industries 8 819 27.738.300.000 21 Fisheries 3 21 5.191.700.000 Chemical & 22 Agriculture and Plantations 5 32 3.301.000.000 Medical Instruments and Pharmaceutical 23 2 9 1.121.100.000 Watches Industries 24 24 Forestry 0 0 0 9,04% Total 2.656 54.478 42.278.213.000.000 Source: DPMPTSP of West Java Province 25 26 27 28 29 30 31 Location Kertajati, Majalengka, West Java Investment Value 1.500 million USD / 22 trillion Rupiah Total Area / Land 3.480 Hectare Status

Strategic Partner/Financing/Shareholder Mode of Offer

Project Owner PT BIJB Aerocity Development Factory Capacity -

Opportunity: 1) Investor 2) Cluster Developer Project Status Business Scheme: 1) Joint Venture Co. as Cluster Management AEROCITY OF 2) Joint Venture Co. as Tenant WEST JAVA INTERNATIONAL Project Description • Attached to West Java International Airport as the new hub in the region equipped with 3 runways: 3500m x 60m, AIRPORT 3000 x 60 m, 3000 x 60 m • Directly connected with Cipali Toll Road, Cisumdawu Toll Road (2019), Proposed Bocimi & Cigatas Toll Road, and Planned Tanjungsari – Kertajati – Arjawinangun/ Cirebon Railway • Center of business, financial, and ICT institution to support all the industries within the area • Renewable resources of sustainable energy to support the industries • Center of multimodal logistics and distribution center • Center of aviation industry with access to Runway • Exclusive residential township with Green Living Concept • Center of excellence of high technology industries with R&D center and advance manufacturing • Center of Hospitality, Commercial and Tourism

Name : Andi Syaputra Deni Rusyana Occupation : Business Development Head of Promotion and Cooperation Section 36 Mobile : (+62) 815-720-780-99 +62-812 2037 6275 Email : [email protected] [email protected] NUSAWIRU AIRPORT

35 Nagreg District, Bandung Location Regency

Investment USD 265 Million Value

Total Area / 82 Ha Land Status

Mode of Offer Public Private Partnership

West Java Environmental Office Project Owner (Provincial Government)

Waste Handling Capacity : Factory 2018 – 2024 : 1800 ton/day Capacity 2025 – 2030 : 2000 ton/day

LEGOK NANGKA Project Status Ready for Construction SOLID WASTE Project Description TREATMENT Legok Nangka Solid Waste Treatment and Disposal is located in Nagreg District, Bandung Regency, this site is approximately 40 km from the center of Bandung. Legok Nangka Solid Waste Treatment and Dispocial has several facilities that continue to be developed in stages, ranging from the development of regions, access road, operation road, sanitary landfill, leachate treatment, and common building. The development of Legok Nangka Solid Waste Treatment and Dispocial is balanced by the renewal of an integrated processing system with the latest technology systems, with the aim of creating advanced, modern, and organized regional development.

Name : Lufiandi Deni Rusyana Occupation : West Java Environmental Agency Head of Promotion and Cooperation Section36 Mobile : (+62) 81214527174 +62-812 2037 6275 Email : - [email protected] 34 Location Sukabumi

Inv. Value IDR 190 Billion

Total Area 7,5 Ha has secured

Acquisition (maximum share of 49%) or Mode of Offer Financing

Project Owner PT Metaphora Andalan Utama

6.3 MW (3x2.1 MW) 1. Number of Units : 3 Unit Factory Capacity 2. Capacity : 1.7 MW 3. Capacity Total : 5.10 MW 4. Annual Production : 30.343 MWH

License and FS are all done. Project Status Land acquisition and DED are done. Land clearing and grubbing have been carried MINI HYDRO out on site. POWER PLANT Project Description • The Project site is approximately 191 km from Jakarta or 131 km from Bandung; • Objective of this project is to develop, construct, and operate mini hydro power plant; • The Commercial Operation Date (COD) is expected in 2020; • The Power Purchased Agreement (PPA) signed by PLN for 20 years; • The Distribution line will be connected to Kebun Randu Feeder and will be tapped with 20 kV existing distribution line in Sukabumi (approximately 150 metres).

Name : Ibrahim Prawirajaya Deni Rusyana Occupation : Construction & Operasional Manager Head of Promotion and Cooperation Section36 Mobile : (+62) 818 0942 7488 +62-812 2037 6275 Email : - [email protected]