Newsletter CONSULATE GENERAL of the REPUBLIC of INDONESIA, MUMBAI, INDIA VOLUME 10/ OCTOBER 2004 MONTHLY NEW PRESIDENT and VICE PRESIDENT of the REPUBLIC of INDONESIA

IndonesiaIndonesiaIndonesia Newsletter CONSULATE GENERAL OF THE REPUBLIC OF INDONESIA, MUMBAI, INDIA VOLUME 10/ OCTOBER 2004 MONTHLY NEW PRESIDENT AND VICE PRESIDENT OF THE REPUBLIC OF INDONESIA

PRESIDENT VICE PRESIDENT H. Susilo Bambang Yudhoyono H. Muhammad Jusuf Kalla Susilo Bambang Yudhoyono was sworn in as Indonesias sixth president and the first to be directly elected, replacing Megawati Soekarnoputri on October 20, 2004. Susilo, a retired Army General, took an oath before the plenary session of the Peoples Consultative Assembly (MPR). Also sworn in was Jusuf Kalla as the Vice President. Both Susilo and Jusuf Kalla were former coordinating ministers during Megawati Soekarnoputris administration. The ceremony was attended by five heads of state : Bruneis Sultan Hassanal Bolkiah, Australian Prime Minister John Howard, East Timor Prime Minister Mari Alkatiri, Malaysian Prime Minister Abdullah Badawi and Singapore Prime Minister Lee Hsien Loong. Also present were foreign diplomats, MPR members and several former ministers and state officials. President, Susilo Bambang Yudhoyono in his speech, which he delivered at the State Palace after his inauguration at the Peoples Consultative Assembly said that the new government will stimulate the economy in order to achieve higher economic growth, which can absorb more employment and help alleviate poverty. The new government will continue to adopt and implement open economic policies, in order to integrate the economy with regional and international economies. In doing so, the government will focus on short- and medium-term agendas in enhancing productivity and competitiveness. Encouragement will be given by the new government for investors to build infrastructure. To combat corruption, anticorruption program will be launched. The new government will prioritize and improve the policies on the education and health sectors. President Susilo added that his government will continue to uphold the free and active principle of foreign policy, and Indonesia is determined to become a voice that promotes peace, increases prosperity and defends justice. Indonesia will continue to grow as a democratic, open, modern, pluralistic and tolerant nation. President Susilo Bambang assured that the new government will work hard to keep the trust of all Indonesian people and the whole nation, in order to meet constitutional requirements within the next five years. PRESIDENT SUSILO BAMBANG YUDHOYONO FORMS UNITED INDONESIA CABINET Indonesian President H.E. Mr. Susilo Bambang Yudhoyono swore in his Cabinet Ministers at the State Palace on Thursday, October 21, 2004. The cabinet called United Indonesia Cabinet consists of coordinating ministers, ministers, state ministers, minister/state secretary, Cabinet Secretary, chairperson of national Development Planning Board and Attorney General. Mentioned below is the United Indonesia Cabinet line up : NEW INDONESIAN CABINET : 2004 - 2009 UNITED INDONESIA CABINET (KABINET INDONESIA BERSATU) President : Susilo Bambang Yudhoyono Vice President : Jusuf Kalla COORDINATING MINISTERS 1). Coordinating Minister for Political, Legal and Security Affairs: Adm. (ret). Widoso A.S. 2). Coordinating Minister for the Economy : Aburizal Bakrie 3). Coordinating Minister for Peoples Welfare : Alwi Shihab DEPARTMENTAL MINISTERS 4). Minister of Home Affairs : Lt. Gen. (ret) Moh. Maruf 5). Minister of Foreign Affairs : Hassan Wirajuda 6). Minister of Defense : Juwono Sudarsono 7). Minister of Justice and Human Rights : Hamid Awaluddin 8). Minister of Finance : Jusuf Anwar 9). Minister of Energy and Natural Resources : Purnomo Yusgiantoro 10). Minister of Industry : Andung Nitimiharja 11). Minister of Trade : Marie E. Pangestu 12). Minister of Agriculture : Anton Apriyantono 13). Minister of Forestry : M.S. Kaban 14). Minister of Transportation : Hatta Rajasa 15). Minister of Maritime Affairs and Fisheries : Freddy Numberi 16). Minister of Manpower and Transmigration : Fahmi Idris 17). Minister of Public Works : Djoko Kirmanto 18). Minister of Health : Siti Fadilah Supari 19). Minister of Education : Bambang Sudibyo 20). Minister of Social Services : Bachtiar Chamsyah 21). Minister of Religious Affairs : M. Maftuh Basyuni STATE MINISTERS 22). State Minister of Culture and Tourism : Jero Wacjik 23). State Minister of Cooperatives, Small and Medium Enterprises : Sugiharto 24). State Minister for Research and Technology : Kusmayanto Kadiman 25). State Minister for Cooperatives and Small and Medum Enterprises : Suryadharma Ali 26). State Minister of Environment : Rachmat Witoelar 27). State Minister for Women Empowerment : Meutia Hatta 28). State Minister for Administrative Reform : Taufik Effendi 29). State Minister for Acceleration of Development in Bakwards Regions : Syaifulah Yusuf 30). State Minister for Information and Communication : Sofyan A. Djalil 31). State Minister for Public Housing : M. Yusuf Asyari 32). State Minister for Youth and Sports Affairs : Adhyaksa Dault STATES OFFICIAL IN A LEVEL OF MINISTERS 33). Minister/State Secretary : Yusril Ihza Mahendra 34). Cabinet Secretary : Sudi Silalahi 35). Chairperson of the National Development Planning Agency (Bappenas) : Sri Mulyani Indrawati 36). Attorney General : Abdul Rachman Saleh Indonesia Newsletter (October 2004) 2 BRIEF PROFILE OF INDONESIAN PRESIDENT & VICE PRESIDENT

President : Gen. (ret). Susilo Bambang Yudhoyono Place and Date of Birth : Pacitan - East Java, Indonesia. 9 September 1949 Wife : Kristiani Herawati Children : Two Career : 1. Graduated from National Military Academy, and Head of platoon Yonif Linud 330 (1974) 2. Head of platoon Yonif 330 (1996) 3. Officer operation of Army Head Quarter 4. Chief Ministry of Military Observer at Bosnia-Herzegovnia (1996) 5. Assistant Politics of Army Head Staff Politics (1997) 6. Minister of Energy and Mineral Resources (1999) 7. Coordinating Minister for Political, Social and Security Affairs (2001).

Vice President : Muhammad Jusuf Kalla Place and Date of Birth : Bone - Southern Sulawesi, Indonesia. 15 May 1942 Wife : Mufidah Jusuf Kalla Children : Five Career : 1. Director, N.V.H. Kalla, Makassar (1969-present) 2. Director, P.T. Bumi Karsa, Makassar (1969-present) 3. Commissioner, PT. Bukaka Teknik Utama, Jakarta (1988- present) 4. Commissioner, PT. Bukaka Singtel Intern Jakarta (1995- present) 5. Member of Peoples Consultative Assembly of the Republic of Indonesia from regional representative (1998) 6. Minister of Industry and Trade (1999) 7. Coordinating Minister for the Peoples Welfare (2001).

INDIAN PRESIDENT CONGRATULATES NEW INDONESIAN Purnomo added that the new government will also accelerate the PRESIDENT : The Indian Embassy in Jakarta said in a statement bidding process of 15 new oil and gas exploration contracts, which that Indian President APJ Abdul Kalam sent a congratulatory message will bring in a total US $160 million in new investment and will to Indonesian President Susilo Bambang Yudhoyono. In his salutatory create new jobs. message, Kalam expressed confidence that India-Indonesia bilateral relations would continue to diversify and strengthen to the mutual INDONESIA TO ANNOUCE NEW ENERGY POLICY : Indonesias benefit of the two countries and their peoples. Coordinating Minister for Economy, Aburizal Bakrie, said the new government will soon issue an energy policy to reduce the INDONESIAN NEW TRADE MINISTRY TO BOOST EXPORTS : governments subsidy on oil fuel gradually. Bakrie said that coal and Indonesias new Minister for Trade, Marie Elka Pangestu said the gas, for which the country has large reserves, will be used for new government aims to boost the countrys export performance in domestic consumption and that oil, reserves of which have been a bid to help accelerate economic growth. Marie added that in order dwindling fast, will be exported. If oil could be replaced with gas to push exports, improving the productivity and efficiency of the fuel, the country would save 80% of the subsidy. The government countrys manufacturing sector was must. Meanwhile, Indonesias would encourage the use of gas or fuel as fuels for households, new president Susilo Bambang Yudhoyono said that in his top factories, cars, etc. Bakrie acknowledged that the program would economic priorities were to improve economic growth to beyond 6 need large investment such as in gas pipelines. percent from the estimated 4.8 percent this year and create more jobs. Marie said that she would continue some of the work of her RESOURCE INDONESIA 2004 RECORDS US $107.70M TRADE predecessor Rini MS Soewandi in negotiating at the World Trade : The recently held 19th national export exhibition, which was Organization, and working on plans to create the ASEAN economic officially closed on sunday, october 18, 2004 recorded a total sales community, and the ASEAN-China Free Trade Area. transaction of US $107.70 million, a 12.7 percent increase from the previous year. Diah Maulida, Head of the National Agency for Export INDONESIA NEW GOVERNMENT TO BOOST OIL OUTPUT : Development (NAFED) which organized the expo, attributed the boost Indonesias Mines and Energy Minister, Purnomo Yustiantoro has in sales to the increasing number of participants. The five-day expo said that Indonesias new government will strive to boost the at the Jakarta Fairground complex in Kemayoran, Central Jakarta, countrys crude oil output to more than 1 million barrels a day within was participated in by 1,254 companies and drew at least 3,000 the next three months. In september, the countrys crude oil output buyers from 65 countries. The top three most traded commodities stood at 966,465 b/d, far below its Organization of Petroleum were furniture, handicrafts and building materials. Products displayed Exporting countries quota of 1.3 million b/d. Purnomo, who has at the exhibition included textiles and garments, footwear, automotive retained his job in the new government under President Susilo components, electronics, cosmetics, food products and mining Bambang Yudhoyono, said accelerating the competition of an offshore commodities.The main buyers in term of value of goods bought came crude oil production facility in Belanak Field is one of his ministrys from Spain with deals valued at US $39.4 million, followed by U.S. priorities in helping boost oil production. The field, which is located buyers. in the West Natuna sea, is operated by U.S. based ConocoPhillips. Indonesia Newsletter (October 2004) 3 FOREIGN & DOMESTIC INVESTMENT FOR THE PERIOD JANUARY-SEPTEMBER 2004 : The total projects of Foreign Investment Approvals during January-September 30, 2004 were 862 projects with the investment value of US $7,993.7 million. There were also 189 projects approvals for expansion of existing foreign companies with the investment value of US $2,093.6 million. During the period of January-September 2004 the popular sectors where investors interested in, were Trade & Repair = 318 projects, Other Services = 149 projects, Metal, Machinery & Electronic Industry = 65 projects, Hotel and Restaurant = 54 projects and Transport, Storage and Communication = 36 projects. The leading foreign investment value during the period were : Chemical and Pharmaceutical Industry = US $3,336.0 million, Metal, Machinery & Electronic Industry = US $833.2 million, Construction = US $743.7 million, Food Industry = US $546.6 million, and Hotel & Restaurant = US $546.3 million. The location where the most foreign investors interested in were Central Java = US $3,335.3 million (10 projects), West Java = US $1,307.7 million (141 projects), Special Territory of Jakarta = US $1,213.4 million (415 projects), Banten = US $396.7 million (58 projects) and Bali = US $296.9 million (86 projects). The leading country of origin of foreign direct investment were Arab Saudi = US $3,017.9 (3 projects), Japan = US $1,234.3 million (50 projects), United Kingdom = US $945.3 million (59 projects), Australia = US $478.7 million (30 projects), and Malaysia = US $419.9 million (77 projects). The potential export value was assumed of US $6,610.7 million with the number of projects were 227 projects. The plan of manpower absorbing during this period were, Indonesia = 126,594 persons and expatriate = 3,762 persons. On the other the total projects of Domestic investment approvals during January = September 30, 2004 were 128 projects with the investment value of Rp. 25,134.2 billion (US $2.76 billion). There were also 69 projects approvals for expansion of existing domestic companies with the investment value of Rp. 5,257.4 billion. During the period of Jan-Sep 2004 the popular sectors for domestic investors were Food Industry = 28 projects, Transport, Storage & Communication = 18 projects, Metal, Machinery & Electronic Industry = 10 projects, Rubber and Plastic Industry = 8 projects. The leading investment value for domestic investment during this period were : Food Industry = Rp. 7,803.5 billion, Eletricity, Gas & Water Supply = Rp. 7,771.0 billion, Transport, Storage & Communication = Rp. 1,574.3 billion, and Rubber & Plastic Industry = Rp. 1,176.8 billion. The location where the most domestic investors interested in were Central Java = Rp. 5,979.5 billion (4 projects), North Sumatra = Rp. 3,453.9 billion (9 projects), Special Territory of Jakarta = Rp. 2,460.3 billion (30 projects), Riau = Rp. 2,395.6 billion (5 projects), and West Java = Rp. 1,925.2 billion (20 projects). The potential export value from domestic investment was assumed of US $1,272.7 million with the number of projects were 48 projects. The plan of manpower absorbing during this period were, Indonesian = 57,216 persons and expatriate = 385 persons. FOREIGN INVESTMENT APPROVAL PER MONTH BY COUNTRY OF ORIGIN (INDIA) January 1 September 30, 2004

Country Jan Feb Mar Apr May Jun Jul Aug Sep

P I P I P I P I P I P I P I P I P I INDIA 3 2.5 3 19.9 5 0.9 1 2.0 2 1.1 1 0.1 1 0.1 5 29.6 1 0.1

Source : Indonesian Investment Coordinating Board (BKPM) Note : 1. Excluding of Oil & Gas, Banking, Non Bank Financial Instititution, Insurance and Leasing, Mining in Terms of Contracts of Work, Coal Mining in Terms of Agreement of Work, Investment which licenses issued by technical/sectoral agency, Portfolio as well as household investment. 2. P : Number of Projects = New Project + Change of Status 3. I : Value of Investment in US $ Million = New Project + Expansion + Change of Status 4. Tentative data, including approvals issued by regions received by BKPM until September 30, 2004. were medical equipment, furniture, machinery, food and beverage, RIS EXPORTS RISE BY 5.75 PERCENT FOR FIRST EIGHT wooden products, building material, textile and garment, medicine MONTHS : The Indonesian Central Bureau of Statistics (BPS) herbs, agricultural products, cosmetics, handicrafts, automotive and reported that Indonesias exports in the first eight months of this spare parts, ceramic ware, toiletries, and electronic equipment, toys year rose by 5.75 percent to US $43.09 billion from the same period and games, apparel and accessories, and fashion accessories. Among last year. For August, the exports went up by 4.15 percent to US the trade visitors with whom Indonesian companies conducted large $5.91 billion from a month earlier or by 17.7 percent from August business transactions during the show, most were from UAE, Bahrain, 2003. Non-oil/non-gas exports in August stood at US $4.6 billion, Yemen, Saudi Arabia, Qatar, Kuwait, Jordan, Turkey, South Africa, up by 3.42 percent from a month ago. The value of Augusts non- Ukraine, Morrocco, Nigeria, Pakistan and India. Total transaction with oil/non-gas exports was mostly fueled by iron ore, iron slag and UAE amounted to US $ 1,775,860. Encouraged by the overwhelming metal powder value at US $117.1 million, however wood exports fell response received during the event, organisers recently announced to US $77.7 million. Overall, non-oil/non-gas exports in January- dates for the third edition of the event. The 3rd Indonesia Solo August period of 2004 moved up by 5.1 percent compared to a Exhibition will he held at Expo Centre Sharjah from September 19- corresponding period last year. United States was the biggest market 23, 2005. The ISE is an annual trade event and is jointly organized for Indonesias non-oil/non-gas exports in August, buying US $709.8 by the Indonesian National Agency for Export Development (NAFED), million worth of commodities, Japan came in second with US $633.5 a unit of the Indonesian Ministry of Industry and Trade, and Expo million, followed by Singapore ( US $355.07 million ) and China ( US Centre Sharjah, with the support of the Sharjah Chamber of $295.12 million). Indonesias non-oil/non-gas exports to the four Commerce and Industry. countries accounted for 43.37 percent of the total export value. Meanwhile, the countrys imports in the first eight months of 2004 RI TO EXPORT 1.3 MLN TONS OF NATURAL RUBBER IN 2004 jumped by 36.47 percent to US $29.1 billion from the same period : Indonesian Association of Rubber companies (Gapkindo) stated last year. that Indonesia is expected to export 1.3 billion tons of natural rubber with about US $2 billion this year. Indonesia exports natural rubber INDONESIAN SOLO EXHIBITION (ISE) SHOW A MAJOR mainly to the United States, China and Europe. The United States SUCCESS : The second Indonesia Solo Exhibition (ISE), which remain the largest buyer, accounting for 60 percent, followed by concluded at Expo Centre Sharjah on September 17, 2004, generated Europe and China respectively accounting for 20 percent. Gapkindo busines worth US $14, 134,290 and attracted over 5,500 trade Chairman, Asril Sutan Amir said that the association plans to expand visitors. Of the trade visitors to the 5-day event, a large majority sales to Eastern European countries. were from the UAE followed by Bahrain, Kuwait, Qatar, Saudi Arabia and Oman. Some of the other countries from which a substantial INVESTMENT IN RIS GAS PRODUCTION PREDICTED TO number of trade visitors attended the exhibition were India, Iran, REACH US $3.9 BLN : Investment in gas production in Indonesia Iraq, Jordan, Lebanon, Pakistan, UK, USA, Sudan, Somalia, and this year is predicted to reach US $3.9 billion, more than 50 percent Yemen among others. This year 390 companies displayed their of an estimated US $7.5 billion being spent in the entire oil and gas products at ISE, with better representation from across a wide range sector.The report issued by the energy and mineral resources ministry of exporters/manufacturers in Indonesia. Some of the products that said that US $2.1 billion of the investment will be used for gas field generated the maximam business at the 2nd Indonesia Solo Show development. The report said that the total investment of US $7.5 Indonesia Newsletter (October 2004) 4 billion in the oil and gas sector was well above the US $3.9 billion in be about 28 million cellular subscribers by the end of the year. The 2000 and US $5.3 billion in 2003. Next year the country is predicted figure if projected to skyrocket to about 40 million next year, mainly to produce 10 billion cubic feet per day (BCFD) of gas, up from an spurred by the wider availability of cellular services and lower rates. estimated 8.8 BCFD this year and 7.3 BCFD in 2003. Indonesia has a known reserve of 178.13 trillion cubic feet (TCF) in 2004, up from INVESTMENT OPPORTUNITIES IN NORTH SULAWESIS 123.6 TCF in 2003. The countrys production is expected to increase TOURISM PROJECTS : The Government of Indonesias North in the following years to follow development of new gas fields in Sulawesi province invites investors to invest in several tourism East Java, South Sumatra and Jambi. projects in the province. According to Noldy Tuerah, Head of the North Sulawesi Integrated Development Board, the region is offering NEW SEAPORT IN NORTH SULAWESI : Indonesian ex-president, investment in Bukit Kasih Integrated Tourism Development, Likupang Megawati Soekarnoputri recently officiated the Bitung seaport in Resort Extension, and Manado Tourism Harbor. For the development North Sulawesi, which is considered to have a big potential in of Bukit Kasih, which is near to Tonggano Lake, the government improving the local economy. The construction of the seaport was requires investment amount as much as US $50-100 million. Further, financed via loans from the Japan Bank for International Cooperation the investment amount needed for extending the Likupang resort is (JBIC), which provided a total of 5.25 billion for the construction of around US $10-50 million under joint-venture cooperation. The the Bitung seaport and another seaport in Kupang, East Nusa construction of Manado Tourism Harbour infact needs bigger fund, Tenggara, which was inaugurated in December last year. The newly the regional government in that case wil reconstruct the Manados completed seaport is expected to be able to accomodate rising old harbor so that it will have big seaport (52,580.97 sqm) and a demand for cargo and container shipping activities by foreign ships parking area with capacity of 481 cars. Besides tourism sector, the to and from Bitung area. The spot where the seaport lies is frequently regional government also offers investment opportunities in passed through by fishermen from Japan, Taiwan, Korea, or by those transportation infrastructure, such as building of Manado-Bitung toll regularly going to the Philippines. road, North Sulawesis International Hub Port, Bitung Terminal Amurang, and the expansion of Sam Ratulangi Airport. RI TO OPEN MORE ITPCS ABROAD : Indonesian National Agency for Export Development (NAFED)s market analysis chief, Syaiful said MALAYSIA TO BUILD POWER PLANT IN NORTH SUMATRA : that the Indonesian government will open more Indonesian trade Malaysias Asahan Power Corporation Limited will built a 2x160 MW promotion centres (ITPC) abroad. From 2000-2004 Indonesia has gas-fired power plant in the regency of Asahan in Indonesias North opened trade promotion centres in six cities of various countries, Sumatra. Further, the companys director, Wahid Al Bin Kassim Ali and another ITPC is scheduled for opening in Mexico City before the said that the power in North Sumatra was in short supply, so there end of 2004. Indonesia six ITPCs are located in Osaka (Japan), Dubai is bright prospect for the investment. The Asahan regent has offered (United Arab Emirates), Los Angeles (US), Budapest (Hungary), Sao the project to Asahan Power Corp with signing of memorandum of Paulo (Brazil), and Johannesburg (South Africa), these ITPCs are understanding between Asahan Power Corp and Indonesian State- expected to play a concrete role in the dissemination of information owned gas company PGN for gas supply. Asahan Power corp has to businesspeople in Indonesia on market opportunities in the sought cooperation with the Islamic Bank Malaysia in the financing countries where they are based, which may eventually boost the project. A German firm will begin construction of the plan in Indonesias non-oil/gas exports. These trade promotion centres, will 2005 and the project is expected to be completed and operational also help small and medium businesses establish trade relations, by the end of 2006. facilitating them in promotion and marketing activities abroad. MALAYSIAS PPB TO EXPAND ITS PALM OIL PLANTATIONS RIS YOGYAKARTA GOVERNMENT WILL DEVELOP BUSINESS IN INDONESIA : Malaysias PBB Oil Palms Bhd plans to expand its NETraders CENTRE : The Government of Yogyakarta Special palm oil plantations in Indonesia. PPB Oil is in the final stages of Territory will be signing an MoU with World Trade Center (WTC) talks to buy 45,000 hectares of land in Central Kalimantan, Indonesia, Jakarta about the development of Business NETraders Center. The which if achieved will give it total acreage of 123,602 hectares. The trading center will provide wide opportunities for Yogyakartas company would plant between 10,000 and 20,000 hectares per year. businessmen to develop their competitive power and penetrate to The company is also investing 30-35 million ringgit (US $7.9 million- global market.The Head of Representative Office of Yogyakartas US $9.2 million) in a palm oil at Sampit in Kalimantan with maximum Government, Prijo Mustiko said that it was the time for products capacity of 120 tons. Golsta Synergy Bhd, a company involved in the produced by Yogyakartas businessmen to expand their market design, fabrication, installation and maintenance of specialized coverage and go international, further the Yogyakartas businessmen machinery and equipment, will also venture into oil palm cultivation will have access to the global market as long as they have the in Indonesia. Goldsta added that its unit Gothisc Assets Sdn Bhd has password to enter the network area. entered into a Memorandum of Understanding (MOU) with Indonesias Karimun district to participate in the cultivation of oil HUGE INVESTMENT IN RIS CELLULAR INDUSTRY : palm seeds and seedlings in Buru and Kundur island in Karimun. Investment in countrys cellular industry is estimated to reach more than US $1 billion in 2005, as operators move to capitalize on growing RI , SINGAPORE SET UP INSTANT BEVERAGE BUSINESS : market demand due to the relatively low penetration of fixed-line The International Food and Beverage company, Empire Holdings , telephones. The two largest industry players, PT Telekomunikasi has established a company, PT ABC Future Indonesia, to distribute Seluler (Telkomsel) and PT Indonesian Satellite Corporation (Indosat) instant beverages in Indonesia. ABC Future will be involved in the are set to invest millions of dollars, mainly to build and upgrage marketing and distribution of instant beverages in Indonesia under their infrastructure. Telkomsel, which has about 50 percent of the the brand name of Real Express, which is developed and total market share, expected to invest some Rp 5 trillion ( US $548.84 manufactured in Singapore by Food Empire Holdings. The new million) this year and for the next year the figure will likely be up to company was formed between FEHs wholly-owned subsidiary Future Rp 6 trillion, and most of that will be spent on infrastructure. As of Enterprises Pte Ltd (FEPL) and Indonesian manufacturing and food August Telkomsel had some 13 milion subscribers, with 3.4 milion distribution company PT Anugerahtama Bina Citra. FEPL has a 49 new subscribers registered since the begining of the year. On the percent stake in ABC future while its Jakarta based partner holds other hand Indosat also plans to expand its infrastructure and the remaining 51 percent. facilities next year, with an estimated total investment of US $500 million. Indosat, with 7.5 million subscribers as of end of August, BLUESCOPE TO INCREASE CAPACITY IN INDONESIA : has revised upward its full-year target of subscribers from 8.5 million BlueScope Steel Ltd, Australias biggest steelmaker, plans to increase to 9.5 million. In Indonesia there are at least 25 million cellular capacity at a steel metallic coating and painting factory in Indonesia telephone susbscribers nationwide, a figure that is partly boosted for a second time this year to meet residential demand. In March it by the low availability of fixed-line telephones. Only about nine million invested A$7.94 million (US $5.7 million) at the plant in Cilegon, of the countrys 220 million people have access of fixed-line phones. Banten province, 100 kilometers (62 miles) west of Jakarta, to According to the Indonesian Cellular Telephone Operators, there will increase capacity to 55,000 tons a year from 25,000 tons. Demand Indonesia Newsletter (October 2004) 5 for Bluescope products for use in homes has increased about 10 to pave the way for the plan. Further, Kadin-Bangka-Belitung is also percent this year, these include color-bonded steel sheets used in planning to team up with the Chambers of commerce of other roofing and trussesin place of timber in housing. The factory has European countries in future. two lines one to coat steel with zinc aluminium; and a second to paint the product with a material that makes it more resistant to CEMENT CONSUMPTION UP : The Indonesian Cement Association heat and rain, with a reflective capability to reduce heat transfer to (ASI) reported that Indonesias cement consumption in August the interior. BlueScope plans to boost capacity of the coating line by reached 2.87 millio tons, up 13.6% year-on-year, while exports, 25 percent by 2007 to 125,000 tons a year. It will raise capacity of fell 1.9% to 386,598 tons. Over the first eight months of the year, the painting line 10 percent by increasing its speed to 70 meters a domestic consumption has risen 8.6% to 19.36 million tons while minute. The company has been in Indonesia for 31 years. It employs exports fell 13.3% to 2.01 million over the same period. Meanwhile 450 workers. the countrys largest cement manufacturer, PT. Semen Gresik, said its sales in August rose 9.9% on-year to 1.48 million tons. In the KOREAS KEPCO SIGNS MOU TO BUILD POWER PLANT IN eight months of August, sales totaled 10.16 million tons, up 13.1% JAVA : Indonesian Electricity Company, PLN stated that Korea from the same period last year. Electric Power Corp. (Kepco) will implement its US $350 million investment project to build a 740-gas fired power plant in Cilegon, DEMAND FOR RIS HEAVY EQUIPMENT : Demand for heavy West Java.The power plant will be built at the location of a liquefied equipment have been strong from various sectors pushing up natural gas (LNG) terminal to be built by PLN in Cilegon. A Komatsu Indonesias sales of products of heavy equipment. In memorandum of understanding has been signed with Kepco to build september sales of Komatsu heavy equipment totaled 121 units and the power plant, to be finished by 2009. PLN plans to build the LNG its sales of components reached 936 tons. The sales in September receiving terminal to facilitate the supply of gas to feed power plants brought its total sales to 695 units of heavy equipment in the first in Java. The terminal is expected to be operational in 2007. PLN is half of fiscal year ending March 31, up from 424 units in the same set to replace or modify its diesel oil powered electricity generation period a year before. Company spokesman Petra Ho said that the plants to use gas or coal as fuel with soaring oil price. strong demand had been recorded for heavy equipment from the mining, agro industry and construction sector. CHILE INTERESTED IN BUYING GAS FROM INDONESIA : Chile has expressed interest in buying gas from Indonesia, and plans NEW VEHICLES SALES RISE BY 17% IN SEPTEMBER 2004 : to send a delegation to Jakarta later this year to discuss the matter Indonesian Automotive company, Astra International citing the data further. Chile plans to hold a tender in March or April next year, with from the National Car Assemblers Association, Gaikindo reported Indonesia likely to be bidding against Algeria and Malaysia. Chile is that new vehicle sales in Indonesia rose 17% to 45,371 units in seeking to reduce its energy dependency on neighboring Argentina. September from 38,695 in August. Gaikindo reported that the domestic new vehicle sales in the first nine-months of the year totaled COAL EXPLORATION BEGINS IN KALIMANTAN : The Head of 348,738 units, up 28% on year. Indonesian Market leader Astra the Provincial Mines and Energy office, Asran has stated that five International (ASII.JK) sold 18,324 new vehicles in the local market mining companies have begun coal exploration in Indonesias North in September, up 25% from 14,606 in August. Barito district of Central Kalimantan. PT. Bharinto Ekatama, which is managed by the Thai-based mining company BANPU, is exploring RIS ASTRA AUTOPARTS COMMISSIONS TWO NEW 22,000 hectares in the North Barito and West Kutai districts and is FACTORIES : Component producer, PT Astra Otoparts has expected to start production in early 2006. Meanwhile, PT Suprabari commissioned two new factories producing automotive components Mapanindo Mineral has obtained a license to explore 71,060 hectares with a total investment of Rp67 billion (US $1.2 billion. One of the of mining area in the Central Teweh district. facilities produces components from plastic and another components from rubber. The subsidiary of Astra International, the countrys CENTRAL KALIMANTANS MURA DISTRICT HAS THE BEST largest automotive company, was prompted to build the factories COALS IN THE WORLD : The district of Murung Raya (Mura), in by growing demand for components both for cars and motorcycles. Central Kalimantan, is believed to have potential mining area for Kokas Coking coals, the type that has the best coal calorie level in INDIAS MAHINDRA & MAHINDRA TO BUILD CAR PLANT the world. The Coal mining location that has the Kokas Coking type IN INDONESIA : Indian automotive company Mahindra & Mahindra lies in the area belonged to PT Maruwei Coal in Maruwei Village, Ltd will establish a joint venture with Indonesias PT Timor Putra Laung Tuhup Sub-district. The company is under the BHP-Billition Nasional (TPN). Indonesias Metal, Machine and Electronic director Group. The areas width is 25,240 ha. This type of coals is only general, Subagyo said that Mahindra will use TPNs facility to found in Maruwei mine area and not anywhere else. Other coal mining assemble motor vehicles in Indonesia. Subagyo said that the joint activities carried out in areas close to the sea are considered to venture company is expected to start operation next year producing produce coals only for evaporation or of Thermal type, whose quality sport utility vehicles (SUV). is below the Kokas Coking coal type. PT. Maruwei Coal is a company RIS ASTRA AGRO JAN-SEP CPO OUTPUT UP 30.6% : holding a contract agreement for coal mining project (PKP2B), which Indonesias PT Astra Agro Lestari reported that its crude palm oil now has reached the feasibility study phase. They planned to start output rose 30.6% in the first nine months of 2004 from the same the production in 2005. The area is estimated to have coal reserves period last year due to a higher yield per fresh fruit bunch. The for more than 50 years. It came from an integrated development of company said that CPO output in the period of January-September the coal concave in Maruwei, Central Kalimantan; part of it also totaled 574,816 metric tons, up from 440,208 tons in the same belongs to East Kalimantan area. period last year. Fresh fruit bunches harvested in the first nine months rose 29.9% to 2.30 million tons from 1.77 million tons a year earlier. S.KOREA IMPORTS OF COAL FROM INDONESIA TO The company is targetting output of 750,000 million tons of CPO INCREASE : South Koreas imports of Indonesian coal may increase this year. 67 percent this year as generators try to meet rising power demand. Korean power producers may import 13.5 million tons of Indonesian RIS TAM TO EXPORT TOYOTA INNOVA TO MIDDLE EAST : coal this year, up from 8.1 million tons in 2003. PT. Toyota Astra Motor (TAM) recently stated that it will export its new product of multipurpose vehicle (MTV) Kijang Innova to Middle KADIN TO TEAM UP WITH GERMAN CHAMBER OF East next year. The President of PT TAM, Johny Darmawan said that COMMERCE : Indonesian Chamber of Commerce & Industry his company plans to expand market to 10 countries in Middle East, (KADIN) branch in Bangka-Belitung will explore ways to team up including Qatar, the United Arab Emirates, Saudi Arabia, Bahrain, with its German counterpart to boost trade and economic growth in and Kuwait. TAM also plans to export Toyota Innova to Thailand. the province. The Chairman of Kadin-Bangka-Belitung, Zulbachri Zakir Exports to Thailand will start next month. TAM has spent around US said that some 18 Indonesian Businessmen from the province recently $360 million to build Toyota production line including for Toyota met with the German Chamber of Commerce leader, Andreas Goeche, Innova. Indonesia Newsletter (October 2004) 6 INDORAMA TO BUILD NEW COAL-FIRED POWER PLANT IN completed, INCOs production will reach 200 milion pounds. INCOs WEST JAVA : Indonesian Polyester maker PT Indorama Synthetics nickel output target this year is 160 million pounds. INCOs first plans to build a US $64 million coal-fired power plant at its factory two hydro-power plants have a capacity of 165MW and 110MW. in Purwakarta, West Java, in efforts to reduce energy costs. The International Finance Corporation (IFC) will provide loans worth PC SALES INCREASE BY 50% JAN-SEP : The Indonesian US $48 million to fund the project, and the remainder would come Association of Computer Producers (Apkomindo) recently reported from internal cash flow. Indorama currently spends around US $25 that the domestic personal computer sales in the first nine months million a year on power, and the companys own plant would allow of 2004 jumped nearly 50 percent to 750,000 units from 500,000 the cost to be cut by 35-40%. The companys secretary, V.S. Baldwa units in a corresponding period last year. The Chairman of said that the purwakarta plant was running at capacity of 240,000 Apkomindo, Hidayat Tjokrodjojo said that nearly 60 percent of metric tons. Sales are tipped to rise to US $400 million this year 750,000 computers were locally assembled, and the rest was built from US $356.2 million in 2003. up. Chairman of Apkomindo expressed optimism computer sales would reach a record high of 1 million units this year. The association RIS SAWIT MAS SIGNS US $1.8 BLN CONTRACT : Indonesias has projected personal computer sales in 2005 at 1,250,000 units. Sawit Mas Group has signed with Procter & Gamble Chemicals a US $ 1.8 billion oleochemical sales contract, the second between the BALI CHOSEN AS FAVORITE HOLIDAY DESTINATION : A two sides after one valued at US $200 million signed in January this survey by international magazine TIME has disclosed that Indonesias year. Signing contract made Sawit Mass Group one of the largest resort island of Bali has been choosen as the most favorite holiday suppliers of oloechemicals of the worlds largest consumer of natural destination in Asia for four consecutive years.The 2004 TIME Readers olechemicals. Sawit Mas Chairman Susanto Lim further added that Travel Choice, which drew almost 2,500 responses from its readers the two sides have also agreed to sign a third contract valued at in Asia, also named Singapore as the most favorite business city, around US $50 million US $600 million. Lim added that the Singapore Airlines as the most favorite airline, and Changi as the cooperation with P&G will make Sawit Mas the largest oleochemical most favorite airport in the region. TIME Asia associate publisher center in the world especially with the support of its oil palm Ivy Choil said that the results highlighted the appreciation toward plantations the largest of a single company in the world. Sawits Asias brands in the travel sector. olechemical complex is located in Kuala Tanjung in North Sumatra r producing Fatty acid and Fatty alcohol with 330,000 hectares of oil TIME 2004 BOOKS US $13 MLN IN TRANSACTION : The 2004 palm plantation. Tourism Indonesia Mart and Expo (TIME) held in Yogyakarta from September 26 to 29, 2004 has secured transaction worth US $13 HONG KONG INVESTOR TO BUILD LUXURY ESTATE : Hong million, higher than last years US $10 million. The transactions Kong Investor PT Gazelle Worldwide Inc is developing an exclusive were obtained from the 147 sellers collected by the committee. housing complex at Bukit Sentul near Bogor, south of the capital The number of sellers who took part in Time 2004 reached 147 Jakarta. PT Gazzelle Indonesia director, Suwondo said that the with 102 buyers from 28 countries. Beverly Hill Side Resort Residence, built on 70 hectares of land, will be the first exclusive housing complex in the country. The project GARUDA INDONESIA TRANSPORTS 4.6 MILLION is expected to be completed by September next year. Suwondo added PASSENGERS IN FIRST SIX MONTHS : Garuda Indonesia that the prospects in Indonesias property business were reported that it has transported about 4.6 million passengers during encouraging. the first semester this year. The airline also reported that total domestic passengers carried were 3.5 million people, much higher INCO TO BUILD HYDRO PLANT : South Sulawesi-based nickel than international passengers which were only 1.1 people. Further, miner PT International Nickel Indonesia (INCO) will invest US $125 in term of cargo volume, Garuda had transported a total of 66.7 million to build a third hydro-power plant. The hydro-power plant, million tons, comprising 39.8 million tons of domestic cargo and which will raise nickel output to 200 million pounds from 155 million 26.9 million tons of international cargo. last year, will have a capacity of 90 megawatts. Once the project is BANK INTERNASIONAL INDONESIA - UPDATE - Promising Half Yearly Results: BII has posted net profit of Rupiah 425.08 billion ($46.6 million) for the first six months of the current financial year. This profit is nearly triple the Rupiah 145.75 billion of the corresponding period last year. In 2003, the bank had posted a net profit of Rupiah 309.10 billion, more than double the 2002 result. The bank is optimistic that the full year net profit would double the first half figure.

Ratings show, BII Growing Stronger:The International Agency - FITCH has recently upgraded BII's ratings of long- term Foreign Currency to B+ from B, Individual D from D/E, National Long Term to BBB from BBB- and Support from 4 to 5. The upgrades follow a majority state acquisition by Sorak Financial Holdings which is 50% owned by the Singapore government's major investment arm, Temasek Holdings and BII's return to financial soundness and profitability. Fitch Ratings has also upgraded the rating of Bank Internasional Indonesia Receivables Trust's future flow credit card receivable securitisation to 'B+' from 'B' in view of a healthy debt service coverage ratio.

A Giant Leap in Consumer Automotive Financing Market:In line with the focus on fast-growing consumer loans market, especially automotive financing, BII has recently signed an agreement to buy a 75 percent stake in PT Wahana Ottomitra Multiartha (WOM), which is Indonesia's third-largest motorcycle financing company. In Indonesia, motorcycle sales grew by 23 percent last year and expanded by 29 percent year-on-year in the first seven months of 2004.

BII has targeted to achieve a market share above 8% by 2008 in SME/commercial and targeted consumer segment.

BII- Mumbai Branch: Amerchand Mansion, Madame Cama Road, Colaba, Mumbai-400 039, Tel: (91 22) 2288 6834- 40 Fax: (91 22) 2288 5851/2288 5964. Email your enquiries related to various banking requirements to: Trade Finance/ Services Products: [email protected] & [email protected] Loans/Advances: [email protected] Deposits: [email protected] Indonesia Newsletter (October 2004) 7 IndonesiaIndonesiaIndonesia Newsletter Exhibitions in December 2004 at Jakarta International Expo, Kemayoran, Jakarta - Indonesia organized by PT. Pamerindo Buana Abadi Deutsche Bank Building, 13th Floor, Jl. Imam Bonjol No.80, Jakarta 10310, Indonesia Tel. :(62-21)316 2001, Fax. : (62-21)316 1981 Email : [email protected] Website : www.pamerindo.com MANUFACTURING INDONESIA 2004 The 15th International Manufacturing Machinery, Equipment, Materials and Services Exhibition 8-11 December 2004 including: MACHINE TOOL INDONESIA 2004 : The 18th International Machine Tool, Metalworking and Allied Industries Exhibition Incorporating Welding Indonesia ENVIRONMENT TECHNOLOGY 2004 : The 12th International Exhibition on Equipment and Systems for Pollution Control and Environmental Improvement Incorporating Watertech Indonesia. AUTOMATION TECHNOLOGY INDONESIA 2004 : The 7th International Industrial Control and Automation Technology Exhibition CHEMICAL INSTRUMENT LABORATORY INDONESIA 2004 : The 11th International Exhibition of Chemical and Process Engineering, Instrumentation and Laboratory Equipment. VEHICLE MANUFACTURING & AUTOMOTIVE TECHNOLOGY INDONESIA 2004 : The 4th International Vehicle Manufacturing Machinery, Components, Spares, Maintenance and Forecourt Equipment Exhibition Materials Handling Indonesia 2004 : The 6th International Exhibition for Materials Handling and Storage Equipment and Technology. PROPAK INDONESIA 2004 The 17th International Series of Exhibitions for the Processing & Packaging Industries 8-11 December 2004 incorporating : FOODPROPAK INDONESIA 2004 : The 17th International Exhibition of Processing & Packaging Machinery, Equipment and Materials for the Food & Beverage Industries PHARMAPROPAK INDONESIA : The 17th International Exhibition of Processing & Packaging Machinery, Equipment & Materials for the Pharmaceuticals, Healthcare and Cosmetics Industries. PLASTICS & RUBBER INDONESIA 2004 8-11 December 2004 The 17th International Plastics and Rubber Machinery, Processing and Materials Exhibition incorporating Mould & Die Indonesia PRINTING INDONESIA 2004 8-11 December 2004 The 10th International Printing Machinery, Equipment & Supplies Exhibition.

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