[Kabar-indonesia] 18 Biz/Econ Reports: AFR: Orica's US$200m RI explosives plant gets nod

[JoyoNews at aol.com]

Note: Due to yesterday's technical problems,
we could not send this until now]

18 Reports:

- AFR: Orica's US$200m explosives 
  plant gets nod
- Japan, Indonesia begin 6th round 
  of free trade talks in Tokyo
- Indonesia Bk Rakyat On Track
  To Book IDR4T Net Pft 06
- Strong demand in Indonesia's last
  '06 bond sale
- Bk Indonesia Dep Gov:Dlr Likely
  Around IDR9,000 Year-end
- Indonesia lowers guaranteed rupiah
  deposit rates
- Indonesia Bank Mandiri says debt haircuts
  only for debtors who show 'goodwill'
- Indonesia's BII sees 2007 loans growth
  above 20 pct
- Bank Jabar To Issue Up To IDR1T
  Bonds Nov
- Indonesia's Bank Mandiri mulls selling
  Semen Kupang stake
- Ford motor urges Indonesia govt to
  cut luxury sales tax
- General Electric To Produce Rail
  Locomotives In Indonesia
- Indonesia's Mulia Group cancels plan for
  240 mln-usd bond issue - report
- Holcim Indonesia to sell cement
  retailing unit
- Indonesia's Sungai Budi sells 39.24% of
  share in Tunas Lampung
- Kartika Airlines has 3 new regional
  routes on its radar
- Bank Rakyat to loan US$33 mln to
  Indonesian oil palm farmers
- Indonesia palm oil prices up on Eid
  festival buying

Australian Financial Review
Wednesday, October 11, 2006

Orica's US$200m explosives plant gets nod

Morgan Mellish, Jakarta

After a decade of delays, explosives company Orica announced 
yesterday it would finally go ahead with its plan to build a $US200 
million ($260 million) ammonium nitrate factory in Indonesia.

The project, capable of producing 350,000 tonnes of the explosive 
a year, is the largest investment by an Australian firm in the country
since the 1997-98 Asian financial crisis.

Philippe Etienne, the head of Orica's mining services division, said
the Melbourne-based company had agreed to buy 10 hectares of land at
Bontang in East Kalimantan, and construction would take about three
years.

Orica has been trying since 1997 to get approval to build the plant,
which will employ about 100 people.

The company was blocked by its prospective local partner, state-owned
fertiliser company Pupuk Kaltim, for many years because it refused to
pay what amounted to a $US10 million bribe.

This led Orica to appeal directly to President Susilo Bambang
Yudhoyono for help. Earlier this year, Pupuk Kaltim president Omay
Wiraatmadja was arrested on separate corruption charges.

"Orica has been working for many years on this project," Mr Etienne said.

"It has had a very long gestation period." At the moment, Orica
imports all its explosives into Indonesia.

Once the factory is built, it claims it will be able to better supply
major customers such as Bumi Resources, Rio Tinto and other Indonesian
coalminers.

Australian ambassador Bill Farmer said: "We've heard about Orica's
plans going back not quite 10 years.

"It's a very good thing we are here today to celebrate the largest new
investment in Indonesia for the past seven or eight years."

Mr Yudhoyono has launched a major corruption crackdown, leading to the
arrest of dozens of senior bureaucrats and business people.

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

Japan, Indonesia begin 6th round of free trade talks in Tokyo

TOKYO, October 10 (AP) - Japan and Indonesia on Tuesday began 
a sixth round of talks in Tokyo on a possible free trade agreement, 
a Foreign Ministry official said.

The latest round of negotiations is slated to last until Friday, said
Kohei Saito, an official in the ministry's Economic Partnership
Division. The previous round was held in Indonesia in August.

The two sides are expected to work on a draft agreement and discuss
matters related to two-way trade in goods and services, investment and
cooperation, according to a ministry statement.

Japanese Deputy Minister for Foreign Affairs Mitoji Yabunaka and
Indonesian Ambassador Soemadi Djoko Moerdjono Brotodiningrat were
expected to participate in the talks, it said.

The two sides have already covered most of the major issues in their
talks over the possible economic partnership agreement, Foreign
Ministry Deputy Press Secretary Tomohiko Taniguchi said last week. The
negotiations began in July 2005.

Tokyo has been stepping up efforts to make free trade deals in an
effort to keep its economy afloat and to compete with China, which is
moving ahead in forming regional trade pacts.

Japan already has free trade deals with Singapore, Mexico and
Malaysia. It recently concluded talks with Chile, and an agreement has
also been signed with the Philippines; Japan is awaiting lawmakers'
approval in both countries.

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

Indonesia Bk Rakyat On Track To Book IDR4T Net Pft 06

JAKARTA, October 10 (Dow Jones)--Indonesia's state-owned PT Bank
Rakyat Indonesia (BBRI.JK) is on track to reach its net profit target
of IDR4 trillion this year, according to a bank official.

The target is slightly higher than the IDR3.81 trillion net profit the
bank booked in 2005.

BRI's President Director Sofyan Bashir told reporters late Monday that
the bank will also likely achieve its target of boosting outstanding
loans by 20% this year to IDR19 trillion from last year amid falling
interest rates.

"Falling rates have a significant impact on lending growth," Bashir
said. "I believe lending growth will grow quickly early next year."

Bank Indonesia last week cut its benchmark one-month rate by another
50-basis points to 10.75%, and continued to flag the possibility of
more rate cuts in the future amid easing inflation.

Bashir added that the bank, which mostly lends to small- and
medium-sized enterprises, will use internal funds to boost lending by
another 20% next year. As a result, it has no plans yet to issue
bonds.

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

Strong demand in Indonesia's last '06 bond sale

JAKARTA, October 10 (Reuters) - Indonesia attracted strong demand on
Tuesday in its last government bond sale this year on expectations of
further interest rate cuts and the scarcity value of the two-year
bonds on offer.

The strong demand was reflected by total bids worth 10.1 trillion
rupiah ($1.10 billion), or 10 times the original target. The
government, however, sold only 1.1 trillion rupiah, allowing it to
price the bonds to yield 9.73 percent.

There were currently no comparable 2-year government bonds on the
secondary market.

As a result of the strong demand, the government was able to sell the
2-year bonds at a lower yield, even compared to shorter-term 1-year
bonds which were priced to yield around 10.1 percent as of midday on
Tuesday.

"Demand was high because this new series carry shorter maturity,"
Rachmat Waluyanto, head of the finance ministry's debt management
unit, told reporters.

Analysts said falling domestic interest rates due to an easing in
inflation had boosted demand in recent months for Indonesian bonds,
with yields among Asia's highest.

Further significant gains in bond prices, however, would depend not
just on interest rates but factors that have hampered investments such
as tax and legal certainty, analysts said.

Indonesian bonds are rated below investment grade. Standard and Poor's
Ratings Services, for example, rates long-term Indonesian local
currency government bonds "BB+" -- one notch below investment grade.

The central bank said last week an expected fall in inflation should
allow interest rates to be cut to around 9-9.5 percent by the end of
the year. It cut its benchmark rate <BIPG> by 50 basis points to 10.75
percent, the fifth cut this year.

Tuesday's bond auction brought the total amount of government bonds
sold to around 60 trillion rupiah so far this year, in line with the
government target, with the proceeds used to help plug the state
budget deficit.

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

Bk Indonesia Dep Gov:Dlr Likely Around IDR9,000 Year-end

JAKARTA, October 10 (Dow Jones)--The U.S. dollar is likely to slide
toward IDR9,000 by the end of the year, Bank Indonesia Deputy Governor
Aslim Tadjuddin said Tuesday.

Tadjuddin said the rupiah's weakness on Monday was an aberration due
to North Korea's nuclear test, which hit most regional currencies.

"I'm optimistic that the rupiah will strengthen again," he told reporters.

The dollar was traded at IDR9,223 at 0725 GMT, steady from Monday's
close as jitters over geopolitical risks are abating, dealers said.

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

Indonesia lowers guaranteed rupiah deposit rates

JAKARTA, October 10 (Reuters) - Indonesia lowered on Tuesday its
maximum rupiah guaranteed bank deposit rates in line with falling
inflation, but kept its guaranteed dollar deposits unchanged, the head
of the state deposit insurance agency said.

The state-run agency's changes on maximum guaranteed bank deposit
rates are closely watched by commercial banks as the decisions affect
their deposit and lending rates, critical for their profitability.

The deposit insurance corporation (LPS) set its maximum rupiah
guaranteed deposit rates at 10.75 percent for Oct.15- Nov.14 from
11.25 percent for the previous period of Sept.15- Oct.14.

It kept the maximum dollar guaranteed deposit rates at 5 percent for
the same period.

"The reasons are due to expected further falls in inflation and
improving liquidity in the banking sector. This should help maintain
the confidence level," Krisna Wijaya, the head of the agency, told
reporters.

He did not elaborate on why maximum dollar rates were kept unchanged.

The lower maximum guaranteed rupiah rates follow a move by the central
bank to cut the benchmark one-month interest rate <BIPG> by 50 basis
points to 10.75 percent earlier in October following an easing trend
in domestic inflation.

The government has guaranteed bank deposits up to a certain limit to
raise confidence after massive bank runs at the height of the Asian
financial crisis.

The government reduced the maximum guaranteed bank deposits by 80
percent to 1 billion rupiah for a single depositor in one bank
starting Sept. 22.

The move was aimed at easing the budget burden in case of a bank
collapse, strengthening financial markets by reducing an over-reliance
on bank deposits as investments and luring some of the funds to boost
the small local bond and stock markets.

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

Indonesia Bank Mandiri says debt haircuts only for debtors who show 'goodwill'

JAKARTA, October 10 (XFN-ASIA) - PT Bank Mandiri will grant haircuts
on the settlement of loan principal only to debtors who show
"goodwill" the bank's president Agus Martowardoyo said.

Following a government revision to rules on debt restructuring, the
bank will over the next 1-3 months move to restructure the debts of
its major borrowers, Martowardoyo said.

The rule change was aimed at speeding up the restructuring of state
banks' non-performing loans (NPLs). Prior to the change managers of
state banks' were not allowed to offer debt haircuts or to auction off
assets held as collateral for soured loans.

Technical details of the revision are expected to be issued over the
next few weeks, Martowardoyo said.

"We, however, will only restructure debts, including providing
haircuts on loan principal, to those debtors who show goodwill in
settling their debts, " he said.

Bank Mandiri's current net NPLs ratio currently stands at 14 pct, well
above Bank Indonesia's maximum level for commercial banks of 5 pct.

At 11.08 am, Bank Mandiri was up 25 rupiah at 2,475. The composite
index was up 9.837 points at 1,553.261.

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

Indonesia's BII sees 2007 loans growth above 20 pct

JAKARTA, October 10 (XFN-ASIA) - PT Bank Internasional Indonesia
(BII), the country's sixth largest by assets sees its loans growth
exceeding 20 pct next year as a result of declines in domestic
interest rates. expected next year's loan growth to be higher than 20
pct paced by lower interest rate, company

"For next year lending growth, we are looking at above 20 pct,"
president Henry Ho said, noting that this year's loans growth is
expected to be slightly below that level, given that the central bank
has only been aggressively paring back its benchmarket BI interest in
the past three months.

"We hope conditions (for loans) will be better in fourth quarter and
even better next year because demand will be stronger and the cost of
fund is going to be lower," Ho told reporters.

He noted that BII is also negotiating financing from the World Bank's
unit International Finance Corporate (IFC) of around 100-200 mln usd
to support its loans expansion plans.

"If we can do it this year we will, but we are not in a hurry," he
said, adding such an IFC loan would likely have a tenor of 3-5 years.

At the end of 2005, BII's outstanding loans totaled 22.09 trln rupiah.

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

Bank Jabar To Issue Up To IDR1T Bonds Nov

JAKARTA, October 10 (Dow Jones)--PT Bank Jabar will issue up to IDR1
trillion ($108 million) in bonds later this year to raise funds for
new loans, Bisnis Indonesia reported Tuesday.

The lender, which is owned by West Java's provincial government, has
named PT Indo Premier and PT CIMB-GK Securities Indonesia as co-lead
underwriters of the planned bonds, the report quoted Bank Jabar
spokesman Rochadi Santoso as saying.

It expects the offering to be done in November and hopes to list the
bonds on the Surabaya Stock Exchange on Dec. 4, the report said.

The report didn't give the tenor nor the expected yield of the proposed bonds.

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

Indonesia's Bank Mandiri mulls selling Semen Kupang stake

JAKARTA, October 10 (XFN-ASIA) - PT Bank Mandiri is studying options
for speeding up the recovery of its soured loans to PT Semen Kupang
including the divestment of its stake in the cement maker, Mandiri
corporate secretary Mansyur Nasution said.

Semen Kupang, has about 500 bln rupiah worth of non-performing loans
which it owes to Bank Mandiri.

"We are discussing options to restructure the debt with parliament,
the central government and the provincial government," Nasution told
XFN Asia.

Semen Kupang is based in Kupang, East Nusa Tenggara province.

Bank Mandiri is the biggest shareholder of Semen Kupang with a 60 pct
holding, while the central government and provincial government hold
38 pct and 2 pct stakes, respectively.

Nasution said selling off its holding would enable Mandiri to also
comply with an exisiting regulation that requires a bank to divest
stakes in non-banks after keeping such investments for five years.

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

Ford motor urges Indonesia govt to cut luxury sales tax

JAKARTA, October 10 (Asia Pulse/Antara) - A group of U.S. business
leaders cited a number of factors including ones related to luxury
sales tax and the investment law hampering investment in the country.

President of Ford Motor Indonesia Richard Baker said luxury sale tax
based on the engine capacity and body style of cars is one of the
factors discouraging investment in the automobile industry.

About 43 per cent of Ford Motor sales in the country were hampered by
the regulation, Baker said in a meeting between the chief economics
minister Boediono and 34 member team representing large U.S.
companies.

He urged the government to reduce the luxury sales tax or set the rate
based on the retail selling price of cars instead of on engine
capacity and body style.

He said the government should speed up the issuance of a competitive
investment law to attract investors to the country.

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

General Electric To Produce Rail Locomotives In Indonesia

JAKARTA, October 10 (Dow Jones) --U.S. corporate giant General
Electric Co. (GE) plans to produce rail locomotives in Indonesia, in
partnership with unlisted domestic manufacturer PT Industri Kereta
Api, or PT Inka, a senior GE executive said Tuesday.

The two firms hope to begin production as early as this year to
replace aging rolling stock on Indonesia's main island of Java, GE
Southeast Asia President Stuart L. Dean told reporters.

"(Production) facilities already exist at PT Inka," Dean said, without
elaborating on the size of investment that GE would make to begin
manufacturing in Indonesia.

PT Inka spokesman Agus, who goes by one name, confirmed the deal with
GE, but was unable to provide further details.

Dean is in Indonesia as part of a delegation of 20 U.S. corporate
leaders visiting under the umbrella of the U.S.-Indonesian Business
Council.

The local production base will allow the two firms to tap a relatively
lower cost labor force as well as domestic industries that could
supply up to 30% of the components for the locomotives, Dean said.

The planned venture marks a diversification in GE's portfolio of
operations in Indonesia.

General Electric's operations in Indonesia generate between $400
million and $500 million in annual revenue from machinery sales for
infrastructure projects in the oil and gas extraction and processing
sector, light bulb manufacturing, and branded credit card operations
through its GE Finance subsidiary Dean said the two firms have already
manufactured two locomotives and that he sees demand for up to 20
additional locomotives over the next decade.

"The average age of (Indonesia's locomotives) is now over 25 years,
and they really need revitalization in a way to improve time and fuel
efficiency," he said.

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

Indonesia's Mulia Group cancels plan for 240 mln-usd bond issue - report

JAKARTA, October 10 (XFN-ASIA) - Property and hotel developer Mulia
Group has cancelled its plan to issue bonds worth 240 mln usd because
of lack of interest from investors, Bisnis Indonesia reported.

The newspaper quoted an unidentified official of the company as saying
that the plan was for unit Noble Finance to issue the bonds, which
would have been fully guaranteed by three other units -- PT Mulia
Intipelangi, PT Mulia Intanlestari and PT Sanggarcipta Kreasitama.

The proceeds would have been used to re-finance 560 mln usd-worth of
debt owed by two other units -- PT Mulia Glass and PT Mulia Keramik
Indahraya -- the newspaper said.

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

Holcim Indonesia to sell cement retailing unit

JAKARTA, October 10 (Asia Pulse/Antara) - The country's third largest
cement producer PT Holcim Indonesia said it will sell its cement
retailing subsidiary PT Wahana Transtama.

PT Wahana Transtama, which is 98.9 per cent owned by Holcim, has
continued to report losses because of rising operating cost, Holcim
Communication Manager Monika Irawati Irsan said.

In addition the subsidiary of the Swiss cement giant Holcim Ltd wants
to concentrate on it core business in cement production, Monika said.

She said Holcim management has offered PT Wahana Transtama with assets
valued at around Rp18.2 billion (US$2 million) to its workers but the
workers refused. Therefore Holcim decided to offer it to other
investors.

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

Indonesia's Sungai Budi sells 39.24% of share in Tunas Lampung

JAKARTA, October 10 (Asia Pulse/Antara) - PT Sungai Budi has sold
39.24 per cent stake (1.62 billion shares) of its stake in PT Tunas
Lampung, a producer of cooking oil and tapioca flour, to three new
investors.

The shares were sold on September 29 at a total price of Rp202.3
billion (US$22.45 million) including 400 million shares (9.69 per
cent) to PT Budi Alam Kencana (BAK), 600 million shares to PT Sungai
Budi Perkasa and 618.39 million shares to PT Budi Sulfat Jaya.

Sungai Budi chief commissioner Santoso Winata noted that his company,
which formerly owned 58.86 per cent of Tunas Lampung, wants
diversification of shareholders.

Despite the divestment, Sungai Budi remains the largest shareholder of
Tunas Lampung.

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

New Straits Times (Malaysia)
Tuesday, October 10, 2006

Kartika Airlines has 3 new regional routes on its radar

Marina Emmanuel

PRIVATE Indonesian carrier Kartika Airlines is spreading its wings
with three new regional destinations next year.

After serving 10 domestic routes in Indonesia since 2005, the airline,
which began flights to Malaysian cities namely Ipoh, Johor Baru and
Penang this year, is now eyeing Singapore, Brunei and China in 2007.

"We have ordered five new aircraft worth between US$300 million
(RM1.10 billion) and US$400 million (RM1.47 billion) to cater to the
new destinations," the airline's service establishment general manager
Charles Phillipus Siregar told reporters after arriving on Kartika
Airlines' inaugural Medan-Penang flight at the Penang International
Airport in Bayan Lepas yesterday.

The Boeing 737-200 aircraft with Indonesian journalists and Kartika
Airlines and Tourism Malaysia officials were welcomed by Penang
Tourism Hospitality Committee chairman Cheang Chee Gooi.

Siregar said other Malaysian destinations being eyed by Kartika
Airlines included Kuala Lumpur where it hoped to begin flying by the
end of the year, and Alor Star by next year.

"With the arrival of our new aircraft next year, we hope to fly to
more destinations within the Association of Southeast Asian Nations by
leveraging on our on-time performance, in-flight entertainment and
three-class seating," he added.

Jakarta-based Kartika Airlines currently uses Boeing 737-200 aircraft
with three-class configurations; Business Class (8 seats), Economy
Deluxe (30 seats) and Economy (76 seats).

Siregar said the new aircraft orders include more Boeing 737-300 and
737-400 planes, along with Airbus aircraft.

Kartika Airlines is 80 per cent owned by PT Intra Asia Corpora and 20
per cent by Kartika Eka Paksi, a foundation run by the Indonesia Army.

The airline resumed flying last year after suspension in 2004.

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

Bank Rakyat to loan US$33 mln to Indonesian oil palm farmers

JAKARTA, October 10 (Asia Pulse/Antara) - State-owned Bank Rakyat
Indonesia (BRI) said it will provide Rp3 trillion (US$33.3 million) in
credit for palm oil sector mainly to finance oil palm plantations this
year.

Credits will be available for nucleus companies and plasma farmers,
the bank President Sofyan Basir said.

Sofyan said currently there are 14 companies seeking BRI credits
valued up to Rp3 trillion altogether to build oil palm plantations.

He refused to name the companies but they are leading oil palm
plantation companies seeking expansion by opening new plantations in
Sumatra and Kalimantan.

He said priority will be given to plantation companies cooperating
with plasma farmers.

Plasma farmers grow crops on contract and must sell their production
to a nucleus company, which provides them with capital to prepare land
and buy seedlings.

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

Indonesia palm oil prices up on Eid festival buying

JAKARTA, October 10 (Reuters) - Indonesian palm oil prices were up on
Tuesday amid rising demand ahead of Eid al-Fitr festivities at the end
of the month and on higher soyoil prices.

The market also embraced the latest revisions of the base export
prices of palm oil products, traders said.

At the state marketing centre in Jakarta, which sells palm oil from
state plantations, crude palm oil was 4,178 rupiah ($0.454) per kg
compared with 4,158 on Monday.

In North Sumatra's Medan, the main port for palm oil exports, crude
palm oil traded higher at between 4,200 and 4,225 rupiah a kg compared
with 4,160 last Thursday, with 1,750 of the commodity changed hands.

There were no auctions in Medan on Monday and in Friday.

"Basically prices were up because of demand and tracking higher
soyoil," said a trader in Medan.

Indonesia is the world's most populous Muslim country. During the
Muslim fasting month of Ramadan more oil is used to cook for evening
feasts when followers break their fasts, and consumption will reach
its peak during the Eid al-Fitr festival at the end of the month.

On Monday, soybean futures on the Chicago Board of Trade ended up 2
percent on surging wheat and corn markets. Soyoil futures ended up
0.70 to 0.80 cent per lb, with October <BOV6> rising 0.70 cent to
24.70 cents per lb.

In Jakarta, cooking oil ended up at 4,650 rupiah per kg, compared with
4,625 on Monday.

On the export front, crude palm oil was firmer with offers seen at
$427.5 a tonne for October shipment, free on board Belawan, and bids
at $425.

There were no offers or bids for November shipment, but December
shipment were offered higher at $430 per tonne, while buyers bid at
$427.5.

"Exporters also see some support from the new base prices," a
Jakarta-based trader said.

On Monday, the trade ministry lifted the base export price of crude
palm oil to $434 a tonne from $393 in September, while refined,
bleached and deodorised (RBD) palm oil's export price rose to $456 a
tonne from $416.

The base export price of RBD palm olein, used as cooking oil, was
raised to $466 a tonne from $426, while crude palm olein was increased
to $456 from $416.

The palm kernel base export price rose to $82 a tonne from $73.

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