[Kabar-indonesia] 21 RI Biz/Econ Reports: US$777m Budget May Go Unspent; Inflation [+JSX Down 2%]

[JoyoNews at aol.com]

21 RI Biz/Econ Reports: 

- Indonesia Min: IDR7T (US$777million) 
  In '06 Fiscal Spending May Go Unspent
- Bank Indonesia: May "Further 
  Aggressively" Cut Rates In Sept
- Indonesia sees yearend inflation rate 
  settling at 7-8 pct - economic minister
- JP: Credit-card defaults rise by 2.5% 
  but expected to go down, GE says 
- JP: First RI corporate credit card launched 
- Indonesia Shares End 2% Lower; Medco, 
  Apexindo Lead Falls
- Indonesia Rupiah Ends Up On Dollar's 
  Weak Regional Tone
- Indonesian banks post 138% in
  net profit
- Bank Rakyat Indonesia says it can 
  achieve 20 pct growth this year
- Indonesia's ten largest banks dominate
  credit card market
- Indonesia's WOM Finance get 25 mln usd
  5-yr loan from Germany's DGE
- Indonesian govt to set up investment
  policy committee
- Japanese investors in W. Java
  focus on oil/gas sectors
- Indonesian official visits US to study
  monetary system
- update: Indonesia July car sales hit 
  seven-month low 
- Stock Alert - Indonesia's Astra Intl
  higher on demand recovery hopes
- Indonesia still assessing Adhi Karya
  600 bln rupiah rights issue plan
- Indonesia's Bakrie Bros to build new
  steel factory
- Indonesia's Sumalindo to raise US$17 mln
  from rights issue
- Indonesian tire exports tipped to reach
  US$600 mln in 2006
- JP: Cathay adds flights on 
  Denpasar-HK route 

Indonesia Min: IDR7T (US$777million)  
In '06 Fiscal Spending May Go Unspent

JAKARTA, August 10 (Dow Jones)--A total of IDR6 trillion-IDR7 
trillion (US$777million)  in planned fiscal spending for 2006 will 
likely go unspent, Minister of National Development Planning 
Paskah Suzeta said Thursday.

The unspent funds reflect "a revision in the provision of goods and
services in an effort to make spending more transparent," Suzeta 
told reporters, without elaborating.

Suzeta said the government will steer the funds to help reduce 
the 2006 budget deficit and to assist the completion of "already
established" infrastructure projects, without providing details.

The government is seeking approval from Parliament to raise the 
budget deficit this year to 1.2% of gross domestic product from 
its original target of 0.7% after two earthquakes devastated central 
and western parts of Java recently.

Private investors and analysts say President Susilo Bambang
Yudhoyono's high-profile anti-corruption campaign has created
slowdowns in fiscal spending by bureaucrats concerned about 
possible graft allegations.

Coordinating Minister for the Economy Boediono in April blamed
bureaucratic impediments to planned fiscal spending for slowing 
the pace of economic growth in the first quarter of 2006.

-----------------------------------------------------------

Bk Indonesia: May "Further Aggressively" Cut Rates In Sep

JAKARTA, August 10 (Dow Jones)--Bank Indonesia may "further
aggressively" cut its benchmark one-month interest rate in September
depending on macroeconomic conditions, a central bank official said
Thursday.

"We see that room to further ease monetary policy is still open if the
macroeconomy runs as healthily as it is now," Bank Indonesia Senior
Deputy Governor Miranda Gultom told reporters, without providing any
specific rate forecasts.

Bank Indonesia cut its benchmark one-month rate by 50 basis points to
11.75% on Tuesday in an acceleration of its monetary policy easing
aimed at jump-starting faltering economic growth. [ 10-08-06 0526GMT ]

Indonesia has cut its benchmark interest rates three times since May,
bucking a global trend in monetary tightening, in an effort to reverse
the impact of high rates and high inflation.

The economy likely expanded 4.59% on year in the first six months of
2006, Minister of Finance Sri Mulyani Indrawati said last month. That
would mark a slowdown from the 6.30% growth in the same period in
2005.

Indonesia's Central Statistics Agency will issue second-quarter gross
domestic product data Aug. 15

Analysts expect the Bank Indonesia rate to ease to around 11% by the
end of 2006 in line with a slowdown in on-year inflation to 7% to 8%
in the same period.

"We see that inflation by the end of the year will be 8.0%, plus or
minus (one percentage point)," Gultom said.

"This could be very achievable and maybe better than expectations."

----------------------------------------------------

Indonesia sees yearend inflation rate settling at 7-8 pct - economic minister

JAKARTA, August 10 (AFX) - The government sees the yearend inflation
rate likely settling at 7-8 pct, Coordinating Minister for Economic
Affairs Budiono said.

'I expect inflation this year to stay at 7-8 pct,' he told reporters.

The July consumer price index (CPI) rose 0.45 pct from the previous
month and was up 15.15 pct year-on-year, while year-to-date inflation
rate in July stood at 3.33 pct.

Budiono said he expects CPI growth in the remainder of this year
adding 3-4 pct to that figure, hence for the full year CPI is expected
to settle at 7-8 pct.

He expects the interest rate to continue to decline in line with the
trending down of inflation, but added that 'I cannot comment on the

level of interest rates because that falls under the authority of Bank
Indonesia.'

-----------------------------------

The Jakarta Post
August 10, 2006

Credit-card defaults rise by 2.5% 
but expected to go down, GE says 

The Jakarta Post, Jakarta

Credit-card defaults in Indonesia increased to 9.5 percent as of the end of 
June from 7 percent at the end of 2005, according to an industry player.

The president director and country manager of the newly renamed GE Finance 
Indonesia, Harry Sasongko, said Wednesday that the increase was due mainly to 
last year's fuel hikes and high interest rates, which had left many customers 
unable to pay their credit-card bills. 

However, he added that with Tuesday's BI rate cut to 11.75 percent, it was 
hoped that the default rate would decline. 

Harry did not give the default rate for GE Finance Indonesia, which changed 
its named Wednesday to GE Money Indonesia. 

The company, a unit of the Connecticut-based GE Finance, has about one 
million customers in Indonesia and an around 15 percent market share. It is hoping 
for a 15 to 20 percent increase in the number of its customers by the end of 
2006. 

GE Money Indonesia, which provides Master Card and Visa credit-card services, 
has total assets of Rp 2 trillion (some US$218 million) in Indonesia out of a 
total of $6.5 billion in Asia. 

The new name is already being used in 30 of the 53 nations in which the 
company operates, and will be adopted in the other 23 by the end of the year. 

Harry said he expected that the name change would further increase GE's 
market share due to its greater recognizability. 

Meanwhile, when asked about when GE Money would be ready to issue smart cards 
that complied with international standards as required by the central bank, 
Harry said the firm would only be able to issue such cards by the end of 2007. 

Given the problems connected with magnetic-strip cards, BI is requiring all 
card issuers in Indonesia to gradually replace their customers' cards with 
smart cards that comply with the international Europay MasterCard Visa (EMV) 
standard. 

Such cards have embedded data encrypting microprocessors, ensuring more 
secure transfer of data. 

"However, if it were possible, by 2008 would be even better," said Harry. 

-----------------------------------

The Jakarta Post
August 10, 2006

First RI corporate credit card launched 

Andi Haswidi, The Jakarta Post, Jakarta

In an effort to get a jump on its competitors in the local credit card 
market, Bank Niaga, in collaboration with MasterCard Worldwide, launched the 
country's first dedicated corporate credit card in Jakarta on Wednesday.

The bank's head of sales and services, Yos Badilangoe, said that the Niaga 
Corporate Card was the first credit card that fully reflected the principles 
underlying corporate cards, with the company being given the freedom to choose 
credit limits, including those of the main company account and the sub-accounts 
of corporate divisions and employees. 

"This is a quality product for our premium customers. The Niaga corporate 
credit card is designed to support the businesses of our corporate customers," 
Yos said at the launch of the new card. 

Yos explained that being a Niaga Corporate Card customer would allow a 
company to easily control day-to-day activities, especially as regards travel and 
expenses, and render cash payments redundant. 

"The card will also provide additional prestige for the company as its name 
will be printed on the face of the card," he explained. 

Helmi said that in addition to travel-insurance coverage and quick-cash 
facilities, the new card would also provide a systematic charging system that would 
help companies administer their budgets more efficiently. 

He explained that the technology currently used by MasterCard, called Smart 
Data On Line (SDOL), was an Internet-based reporting and expense management 
solution designed to accommodate the needs of companies in monitoring and 
controlling expenses within the shortest time possible. 

He also said that credit limits would be set based on the request of the 
company, which would also be able to decide the credit limits for its 
sub-accounts. 

MasterCard International Indonesia country manager Vadyo Munaan explained 
that one of the benefits of the SDOL system was that corporate managers could 
monitor expenses through the Internet at any time and that the information at 
hand would be real-time data. 

"Managers need only a log-in identification and a password. No need to 
install any software," Vadyo said. 

In terms of assets, Niaga Bank is the seventh largest bank in the country 
with 65.5 percent of its shares owned by Bumiputra-Commerce Holding Berhad. 

The competition in the country's credit card business is heating up this year 
as banks try to boost their fee-based earnings to compensate for the decline 
in their interest income resulting from lower-than-expected lending growth. 

------------------------------------

Indonesia Shares End Lower; Medco, Apexindo Lead Falls

JAKARTA, August 10 (Dow Jones)--Indonesia shares closed sharply lower
Thursday led by selling in gas and oil producer Medco Energi and its
unit Apexindo Pratama Duta after Medco canceled its plan to sell a
stake in Apexindo, dealers said.

They said overall sentiment was weak as many investors consolidated
their positions after a recent rally ahead of a decision Tuesday by
the central bank to cut interest rate by 50 basis points to 11.75%,
dealers said.

"It's a fair correction after the main index rose about 8% in the
previous 12 sessions," said a trader with Paramitra Securities.

The Jakarta Stock Exchange Composite index ended down 28.244 points,
or 2.0%, at 1384.856, off an intraday high of 1419.224.

Trade volume was 1.95 billion shares valued at IDR1.9 trillion,
compared with 1.42 billion shares valued at IDR1.45 trillion
Wednesday.

Dealers said falls in most Asian markets also spurred selling, but the
firmer rupiah against the U.S. dollar limited losses.

At 0915 GMT, the dollar was trading lower at IDR9,048, compared with
its Wednesday's close at IDR9,090.

Medco lost 5.9% to IDR3,575 and its drilling unit Apexindo fell 11% to
IDR1,560 after Medco's President Hilmi Panigoro told Dow Jones
Newswires that, "the drilling company is too strategic for our
business now, so we decided to cancel the stake sale plan,"

Dealers said renewed worries over stiffer competition in the
telecommunications industry in the wake of the entry of new players
from Hong Kong and Singapore spurred selling in telecommunication blue
chips.

Bellwether Telkom dropped 2.5% to IDR7,750 and rival Indosat ended
down 3.4% to IDR4,275.

On the upside, nickel miner Inco rose 2.2% to IDR20,850 on
expectations of solid 2006 earnings amid higher commodity prices.

Looking ahead, dealers said they expect shares to trade lower Friday
on further prices correction in most blue chips.
----------------------------------------------------------

Indonesia Rupiah Ends Up On Dollar's Weak Regional Tone

JAKARTA, August 10 (Dow Jones)--The Indonesian rupiah closed higher
Thursday after the dollar slid against other regional currencies,
dealers said.

'The dollar's weakness sparked dollar long liquidation,' a dealer with
a foreign bank said.

The dollar was much lower against the yen and other regional
currencies after China said that it would gradually raise its yuan
rate-flexibility. At 0916 GMT, the dollar traded at Y114.83 versus
Y115.37 late Wednesday.

The dollar closed at IDR9,050, versus its close Wednesday at IDR9,090.

Dealers said that exporters' tax payments, which fell due Thursday,
also weighed on the greenback.

They said that persistent dollar demand from importers slowed the
currency's slide. This factor may continue to prevent the U.S. unit
from falling much further Friday.

Dealers also said that market participants seem reluctant to push the
dollar below IDR9,000 as they fear it may prompt the central bank to
defend the U.S. unit.

Bank Indonesia has been suspected of buying dollars in the past
whenever the currency fell below IDR9,000. Market participants deem -
from recent comments made by Bank Indonesia officials - that the
central bank is comfortable with an exchange range between IDR9,000
and IDR9,500.

Dealers expect the dollar to trade between IDR9,025 and IDR9,100 Friday.

The government's first-ever retail bonds rose during their the
secondary market debut amid falling domestic rates. The three-year
bonds were traded at 11.53% in late session, lower than the yield of
12.05% when offered in the primary market.

-------------------------------------

Indonesian banks post 138% in net profit

JAKARTA, August 10 (Asia Pulse/Antara) - Indonesian banks posted an
increase of 13.8% in net profit to Rp13.69 trillion (US$1.52 billion)
in the first half of this year, compared to the same period last year.

The increase was attributable more to service-based income and
improvements in efficiency, with income in credit interest having
little contribution, a Bank Indonesia official said.

Contributions from credit interest were small as credit expansion was
relatively low in the first half of this year, Tirta Segara, an
analyst from the Research Directorate of the central bank, said
yesterday.

Tirta said that in the first six months of this year credit extended
by Indonesian banks grew by only 3.72%, bringing total outstanding
credits to Rp757.3 trillion by the end of June.

Tirta, however, noted that credit expansion had tended to increase,
saying in June that net credit extensions totalled Rp10 trillion to
follow a cut in the reference interest rate by the central bank in
May.

Meanwhile, the President of Bank Danamon, Jerry Ng, said that a
further cut of 50 basis points on Tuesday by Bank Indonesia would
prompt banks to cut their interest rates.

------------------------------------------

Bank Rakyat Indonesia says it can achieve 20 pct growth this year

JAKARTA, August 10 (Asia Pulse/Antara0 - State-owned Bank Rakyat
Indonesia (BRI) (JSX:BBRI) has opted to keep its financial target
despite the lingering slump in the first half of this year.

This comes as many banks lower their yearly targets after performing
below expectations in the first six months of this year.

The country's third largest asset lender said it remains optimistic
that it can achieve its growth target of 20 per cent this year
considering its fairly good performance in the first half, in which
the bank recorded a 19 per cent year-on-year increase in assets and
credits.

Its net profit rose 3.41 per cent to Rp2 trillion (US$222 million),
corporate secretary Hartono Sukiman said.

-----------------------------------------------------------

Indonesia's ten largest banks dominate credit card market

JAKARTA, August 10 (Asia Pulse/Antara) - Indonesia's ten largest banks
in terms of assets account for 61.23 per cent of the nation's total
bank credits, but the domination has been declining in the first five
months of 2006.

The country's largest lender state-owned PT Bank Mandiri (JSX:BMRI) is
still the largest in outstanding credits but its market share has been
reduced from 14.49 per cent by the end of 2005 to 13.89 per cent in
May this year.

Based on data from Bank Indonesia, Bank Mandiri had Rp100.78 billion
(US$11.19 billion) in outstanding credits by the end of last year,
down to Rp97.95 trillion by the end of May 2006.

A sharper decline of 4.17 per cent to 8.48 per cent was recorded in
the market share of state owned Bank Negara Indonesia (BNI)
(JSX:BBNI), the third largest bank in the country, with outstanding
credit shrinking from Rp62.37 trillion to Rp59.77 trillion.

The second largest lender, state-owned Bank Rakyat Indonesia, recorded
a 5.88 per cent increase in market share with outstanding credits
rising from Rp75.35 trillion to Rp79.78 trillion.

--------------------------------------------------------

Indonesia's WOM Finance get 25 mln usd 5-yr loan from Germany's DGE

JAKARTA, August 10 (XFN-ASIA) - PT Wahana Ottomitra Multiartha (WOM
Finance) has received a 25 mln usd five year maturity loan from
Deutsche Investitions und Entwicklungsgesellschaft mbH (DGE), Bisnis
Indonesia reported, citing the bank's president Benny Wennas.

Wennas told the newspaper that the funds will be used to beef up the
firm's motorcycle financing, which is targeted at 4 trln rupiah this
year from 3.6 trln last year.

In addition to the DGE funds, WOM Finance will sign a 100 mln usd loan
agreement with a Singapore-based bank by the end of this month, Wennas
said, without elaborating.

------------------------------------------------------

Indonesian govt to set up investment policy committee

CANBERRA, August 10 (Asia Pulse/Antara) - The Indonesian government
will set up a Committee of Investment Policy before the end of this
year.

"The formation of the committee was proposed by the coordinating
Minister for Economic Affairs. We have discussed it and agreed that
such a committee is needed," Indonesian Trade Minister, Mari Elka
Pangestu, said after attending a business forum of Indonesian and
Australian businessmen in Brisbane, on Wednesday.

The committee will be in charge of identifying sectors which are
restricted or which are open with conditionality and tax incentives.

Pangestu said members of the committee would consist of bureaucrats
from various departments, including the Investment Coordinating Board
(BKPM), which has been functioning as an investment facilitator in
Indonesia.

"So, our idea is to set up a permanent secretary which will be under
the supervision of the coordinating Minister For Economic Affairs. The
permanent secretary will deal with problems concerning the investment
sector," she said.

The Trade Minister said that a new law on investment was also expected
to be passed by the House of Representatives (DPR) before the end of
2006.

In the business forum, which was attended by 25 Australian businessmen
and 16 Indonesian counterparts, the Trade Minister explained about the
latest developments of business prospects and opportunities in
Indonesia.

Minister Mari Pangestu also said that Indonesia was currently
developing Special Economic Zones (SEZ) in Batam, Bintan, and Karimun.

The total trade balance between Indonesia and Australia reached US$5
billion in 2005, with an average growth of 7.2 per cent from 2001 to
2005.

Australian investment in Indonesia during the January-June 2006 was
recorded at US$16.6 million in 32 projects, which put the country in
17th rank in Indonesia's investor list.

-------------------------------------------------------

Japanese investors in W. Java focus on oil/gas sectors

BANDUNG, August 10 (Asia Pulse/Antara) - Japanese investors operating
in West Java are currently focusing their business in the oil/gas
sector besides maintaining the development of electronic and
automotive industries.

The Japanese businessmen in West Java, who are currently facing tough
competition with their rivals from other countries, prefer to focus on
the oil/gas sector as they have become aware of the potential of the
sector in the region, chairman of the West Java Chamber of Commerce
and Industry (Kadin) Iwan Dermawan Hanafi said here Wednesday.

The rising demand for oil and gas in Japan and the limited oil/gas
reserves in the East Asian country have prompted the Japanese
investors to focus their business in West Java on the oil/gas sector,
said Iwan.

Realizing the potential of the oil/gas sector in West Java, the
Japanese investors are interested in the development of technology,
the procurement of processing machinery and making available Japanese
experts in the oil/gas industry.

Asked about the number of Japanese expatriates working in West Java,
Iwan said he has no data on the matter.

According to the national data, there are about 10,000 Japanese
experts working in Indonesia today, he said.

-------------------------------------------------------

Indonesian official visits US to study monetary system

WASHINGTON DC, August 10 (Asia Pulse/Antara) - Indonesian President
Susilo Bambang Yudhoyono's representative and economic adviser Dr
Sjahrir has been learning the United States monetary system to avoid
the possible recurrence of a monetary crisis such as the one in
Indonesia from 1997-1998.

While in the US, Sjahrir attended a series of meetings with officials
of the US Department of Finance, Central Bank (Federal Reserve), World
Bank, US State Department, IMF, and a number of private financial
institutions in New York and Washington DC.

Sjahrir told ANTARA in Indonesia on Wednesday that his visit to the US
was intended to obtain a greater understanding about the way the
country monitors and supervises its market, and manages the
government's loan and foreign assets in its goal to protect internal
and external stability.

"Our market monitoring system should be improved. We have to find a
way or form an institution so that when we are in an apprehensive
situation, we can take immediate action," Sjahrir said.

He added that the government was also offering a financial instrument
in the form of a state debenture, to strengthen the domestic economy.

Sjahrir said that buying a state debenture is a safe investment
because the government has endeavoured to deal with financial and
fiscal policy wisely and carefully.

-------------------------------------------------------

Xinhua 
August 10, 2006

Indonesia July car sales hit seven-month low 
         
Indonesia's car sales plunged 10.9 percent to 21,879 units in July from the 
previous month to become the lowest selling month this year, a newspaper 
reported Thursday. 

National car sales in the first seven months of 2006 fell sharply by 50.3 
percent to 171,456 units against 345,170 units in the corresponding period last 
year, reported Bisnis Indonesia, quoting sources with the country's automotive 
producers association Gaikindo. 

But Gaikindo chairman Bambag Trisulo said the July figure is not final yet as 
several producers have not reported their total sales. 

"I expect the figure will be above 20,000 units as we have not collected all 
reports yet," he said. 

Toyota led the July sales with 7,652 units, trailed by Suzuki with 4,048 
units, Mitsubishi 2,793 units, Honda 2,400 units, Daihatsu 1,790 units and Isuzu 
1,206 units. 

-------------------------------------------------------

Stock Alert - Indonesia's Astra Intl higher on demand recovery hopes

JAKARTA, August 10 (XFN-ASIA) - Car dealer PT Astra International was
higher on follow-through buying on rising hopes that the latest
aggressive interest rate cut would trigger demand recovery, dealers
said.

They said investors also ignored a report about month-on-month car
sales declining in July, focusing instead on Astra's improving
prospects.

Astra International was up 300 rupiah or 2.74 pct at 11,250.

----------------------------------------------------

Indonesia still assessing Adhi Karya 600 bln rupiah rights issue plan

JAKARTA, August 10 (AFX) - The government is still assessing PT Adhi
Karya's proposed 600 bln rupiah rights issue intended to fund its toll
road projects and raise working capital, State Enterprises Minister
Sugiharto said.

'The rights issue plan is being assessed,' he said.

Adhi Karya is 51 pct-owned by the government.

Sugiharto said the company is expanding to the Middle East to
construct large-scale projects and would therefore need a large
capital base. 'This justifies the rights issue,' he said.

He said the company may also decide to apply the proposed bond
proceeds to to strengthen Adhi Karya's capital structure. Whichever
option is decided upon will have to be approved by his ministry,
Sugiharto said.

--------------------------------------------------------

Indonesia's Bakrie Bros to build new steel factory

JAKARTA, August 10 (Asia Pulse/Antara) - Bakrie & Brothers 
says it plans to build a steel factory with an annual capacity of 1
million tons to reduce its dependence on imports of basic steel
materials.

Senior vice president of the company, A.D. Erlangga, said up to 40 per
cent of production from the new steel factory will be used to feed its
steel pipe subsidiaries.

Bakrie & Brothers has four subsidiaries - PT Bakrie Pipe Industries,
PT South East Asia Pipe Industries, PT Bakrie Corrugated Metal
Industry and PT Bakrie Construction - that need up to 400,000 tons of
basic steel materials annually.

Erlangga said basic materials, which are partly imported, account for
70 per cent of the production cost of the group.

He said by 2009, after the completion of the factory, the group will
be able to supply its own basic materials.

--------------------------------------------------------

Indonesia's Sumalindo to raise US$17 mln from rights issue

JAKARTA, August 10 (Asia Pulse/Antara) - Publicly listed timber
company PT Sumalindo Lestari Jaya (JSX:SULI) will raise Rp153 
billion (US$17 million) from its shareholders in a rights issue.

Around 54.05 per cent of the fund will be used to acquire the stakes
of 3A Global Incorporated and Winning Venture Limited in PT Kalimantan
Powerindo, a power generating plant in Kalkimantan.

Sumalindo already owns 5 per cent of PT Kalimantan Powerindo.

The rest will be used to repay a debt of US$3.5 million to Suisse
Charter Investment Ltd and to strengthen its working capital, a
company official said.

PT Danatama Makmur, the standby buyer of the rights shares, said the
rights issue will most likely be oversubscribed as almost all
shareholders use their rights.

---------------------------------------------------------

Indonesian tire exports tipped to reach US$600 mln in 2006

JAKARTA, August 10 (Asia Pulse/Antara) - The Association of Indonesian
Tire Producers (APBI) expect tire exports will reach around US$600
million this year, up from around $520 million last year.

Following a discussion on dumping and anti-dumping, the association`s
chairman, Azis Pane, said that total national tire production in 2005
reached 57 million units, 60 per cent of which was exported.

He said tire exports had shown steady growth over the past two year,
despite sluggish domestic car sales.

"Public buying power has dropped making demand to decline as a result
of economic sluggishness caused by fuel price hike in October 2005,"
he said.

He said this scenario had prompted APBI`s to focus on exports, noting
the country now shipped tires to 150 countries, up from 140 in 2005.
Mr Pane noted the Middle East and South Africa were currently the
domestic industry's primary export markets.

Indonesia is the third biggest supplier of tires for the Middle East
with five per cent of the market share, after South Korea with 30 per
cent and China with 11 per cent), he revealed.

The APBI chair said competition in the tire market had grown fiercer
following Vietnam`s entry into the market after South Korea and Japan
set up tire plants there.

He said domestic tire industries could collapse unless they were able
to boost exports, as the price of natural rubber had soared from
around $0.60 per kilogram in 2004 to $2.40 this year.

Domestic supplies of natural rubber have declined as many farmers are
now focusing on oil palm crops, and have abandoned rubber, Pane
revealed.

----------------------------------

The Jakarta Post
August 10, 2006

Cathay adds flights on Denpasar-HK route 

The Jakarta Post, Jakarta

Cathay Pacific of Hong Kong says it added four flights to its Denpasar-Hong 
Kong service on July 1 to meet the growing demand from tourists for flights to 
the resort island of Bali.

Marketing and passenger sales manager Anthony Hanjaya said Wednesday that 
with the additional four flights, Cathay now had 11 flights serving the 
Denpasar-Hong Kong route per week. 

The additional flights, using Airbus A330-300 aircraft, depart at 9.10 a.m. 
from Denpasar and arrive at 2 a.m. in Hong Kong on Mondays, Wednesdays, Fridays 
and Sundays, and depart Hong Kong and arrive in Denpasar at the same times on 
Tuesdays, Thursdays, Saturdays and Mondays. 

"The ticket price is US$520 and we regularly offer special discounts," said 
Anthony. 

He added that after the first Bali bombings in 2002 and the second bombings 
in 2005, many airlines were reluctant to increase the frequency of their 
services to Bali due to lack of tourist demand. 

Bali Tourist Board figures show that in April this year, the number of 
foreign tourists arriving in Bali stood at 103,866, down by more than 10 percent 
from the corresponding month in 2005. 

"We believe that the reluctance of other airlines to increase flights is an 
opportunity for us," said Cathay's marketing and loyalty assistant manager, Ida 
Sylviana Bekti. 

"In fact, the number of our passengers from Hong Kong to Bali continues to 
increase. Our flights, each of which can carry 311 passengers, are usually 89 
percent occupied," she said. 

According to Sylviana, the majority of the airline's passengers were European 
tourists, followed by Koreans and Japanese. 

She added that many European, Korean and Japanese tourists used Hong Kong to 
transit on the way to their final destinations. 

Currently, Cathay has 29 flights connecting Indonesia and Hong Kong -- 11 
from Jakarta, 11 from Denpasar and four from Surabaya. 

Its service between Denpasar and Hong Kong began in 1970 but was discontinued 
in 1971 before resuming in 1986 with two flights per week. 

The airline increased the number of its flights to three per week in 1997 and 
commenced daily flights in 1998. 

Currently, Cathay operates 99 aircraft consisting of Boeing 777-300s, Boeing 
777-200s, converted Boeing freighters, Boeing 747-400 freighters, Boeing 
747-200s, Airbus A340-300s, Airbus A330-300s and Airbus 340-600s. 

Earlier, Cathay announced a plan to increase its fleet. 

It has ordered 35 aircraft this year, including one Boeing 777-300 to be 
delivered in September 2007, four in 2007, five in 2008, five in 2009 and three in 
2010.

------------------------------------------
Joyo Indonesia News Service
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