THE COORDINATING MINISTRY FOR ECONOMIC AFFAIRS REPUBLIC OF INDONESIA

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Trade and Investment News1, 4 May 2009

Highlights

National The Asian Development Bank warns climate change may impact growth prospectsTerrorism Singaporean sentenced to 18 years in jail for murder, plots Politics Political parties form coalition to oppose Democratic Party Security Indonesian, Chinese navies to boost cooperation Law & order Australian police, FBI to probe alleged Surabaya-based drug cartel Economy Trade surplus jumps in March Strongly positive week on stock market, rupiah strengthens further Business briefs Macroeconomy Bank Indonesia, government reject high interest bids for debt Corporate debt outflows lower than expected Investment US IT firm Teradata to open in Indonesia State concerns Equal conditions for foreign, local firms in mergers, acquisitions March tourism arrivals more up 1.9% from year-before level SOEs Government sets SOE capital expenditures this year at $12.7 billion Private sector Revenue, net profit down at PT Astra International on lower car, motorcycle sales First quarter net profit at PT Indocement jumps 31%Banks Strong first quarter returns for four major banks Bank Central Asia to turn new acquisition into shariah bank Power State utility PLN and Chinese firms agree to transactions in renminbi Power plant for PT Bukit Asam to be completed in 2011Oil & gas Winners of 11 new blocks announced Mining Indonesia’s largest coal mine by value, PT Adaro, returns to profit

1 This Trade and Investment News is a publication of the Coordinating Ministry for Economic Affairs of the Republic of Indonesia. Readers are welcomed to forward it in its original form but no reproduction is allowed without permission.

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NATIONALADB warns of threat from climate change Indonesia’s efforts toward sustainable development, poverty eradication and a stronger economy are under serious threat from climate change, according to an Asian Development Bank (ADB) report released Tuesday, The Jakarta Post reported.

“It is exacerbating water shortages, constraining agricultural production, threatening food security, triggering forest fires, coastal degradation and increasing health risks.”

Rainfall would decline in the next 20 to 30 years in Indonesia, the study claimed.

Indonesia has 5.8 million square km of sea with coastlines stretching 81,000 km, which serve as home to millions of people.

Data from the State Ministry of Environment shows 65% of people on Java, Indonesia’s most populated Island, live in and around coastal areas. The country also has about 17,500 small islands.

The study said the changes in climate would also hit the agricultural sector in Indonesian and other Southeast Asian countries.

“By the end of the century, the total cost of climate change could be equivalent to 6.7% of Southeast Asian nations' gross domestic product (GDP) each year,” ADB principal climate change specialist David McCauley told a press conference in Jakarta at which the report was released.

The study also names Indonesia as the biggest greenhouse gas emitter in the region, releasing 59% out of the total 5,190 million tons of carbon dioxide in 2000.

The report, “Economics of climate change in Southeast Asia: A Regional Review”, was conducted jointly by ADB and the British government. It followed up on economist Lord Nicholas Stern’s review on climate change in 2007.

The study focused on four Southeast Asian countries: Indonesia, the Philippines, Thailand and Vietnam.

Labor Day rallies stop capital Labor Day rallies stopped traffic in Jakarta for hours on Friday, while major demonstrations were also held in Surabaya, Bandung and Medan.

Demonstrators in the capital took over the major north-south thoroughfare, Jl MH Thamrin, as they marched to the State Palace. A minor clash with police on Jl. Medan Merdeka Barat was the only reported incident.

The demonstrators moved from the Manpower Ministry on Jl. Gatot Subroto to the Hotel Indonesia roundabout before marching to the palace and then shifting to the House of Representatives before dispersing.

The turn-out at the East Java Governor’s office in Surabaya was only 500, far less than the 5,000 unionists had predicted, but thousands turned out in the country’s two other major industrial cities, Medan and Bandung.

The labor union members demanded an end to contract employment and outsourcing of jobs, a tactic adopted by employers to reduce the cost of expensive retrenchments of permanent employees.

Workers also urged the government to improve their working condition and salaries. They also rejected the government’s debt burden in the 2009 state budget, Xinhua reported.

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Timbul Siregar, vice chairman of the Indonesian Labor Organization (OPSI), said the state debt issue was unfair for labors as taxpayers. "They have to pay tax but they do not enjoy facilities that are enjoyed by rich people," he said.

Govt. repatriates Rohingya refugees The government is repatriating Rohingya refugees to their country of origin after completing checks on refugees sheltered in Sabang, Aceh province, an official said on Friday, Xinhua reported.

Foreign Ministry spokesman Teuku Faizasyah said that the voluntarily repatriation program is assisted by the United Nations High Commission on Refugees (UNHCR) and the International Organization for Migration (IOM).

"The voluntarily repatriation is underway at the moment. We have contacted officials of recipient countries regarding this issue," he told reporters.

He added that the Sabang refugees had expressed the desire to take part in the repatriation program.

He said that verification on the remaining Rohingya refugees at Idi Rayeuk was underway.

The government has provided shelter for 391 Rohingya refugees at Sabang and Idi Rayeuk. The refugees were found drifting in primitive boats off Aceh waters in January and February this year.

The Rohingya people, originally from Bangladesh, live in Myanmar but are considered illegal settlers by the government.

TERRORISM Singaporean’s jailing wraps up terrorism cases The jailing of a Singaporean, Mohammad Hasan bin Saynudin, for 18 years on Tuesday wrapped up the trials of 10 suspected terrorist operatives arrested last year in South Sumatra, Agence France-Presse reported.

The terrorist who trained for "holy war" in Afghanistan and claimed to have met Osama bin Laden in 2000 was sentenced under Indonesia's anti-terrorism law.

Among other crimes, he was convicted of planning the 2007 murder of teacher Dago Simamora and a bomb attack on a backpacker tourist café which was aborted due to fears of Muslim casualties.

Judge Haswandi said the bearded extremist, who had boasted of his exploits to the media during the trial, "never showed remorse for what he did."

"The accused disturbed the stability and peace of Indonesia and spoilt the image of Indonesia in the eyes of the international community," he said.

The judge added however that the state's request for a 20-year sentence had not been granted because Hasan had admitted to his crimes.

Wearing a long white robe with matching turban, Hasan looked angry when the judge announced the sentence.

Hasan is allegedly linked to regional terror group Jemaah Islamiyah (JI) and was arrested with nine other terror suspects in South Sumatra last year, when police uncovered a safe house containing homemade bombs.

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The court sentenced two of Hasan's co-accused, Ali Masyhudi and Wahyudi, to 10 years and 12 years respectively.

Seven other members of the cell were sentenced to prison terms of four to 12 years earlier.

POLITICSPolitical parties form new coalition Indonesia's Golkar party switched sides Friday to form a broad coalition with opposition leader Megawati Sukarnoputri in a bid to oust the sitting president in July polls, Agence France-Presse reported.

Former military chief Wiranto and former Special Forces (Kopassus) commander Prabowo Subianto also announced their participation in the new grouping after a meeting of party heads in Central Jakarta.

The parties fared poorly in general elections last month and are hoping that by joining forces they will be able to unseat Susilo Bambang Yudhoyono and seize power.

"We'll announce when the time comes about a joint agreement for the presidential polls, presidential candidate and vice presidential candidate," said former President Megawati of the Democratic Party of Struggle (PDI-P).

Megawati is seen as the strongest rival to liberal ex-general and Democratic Party chief Yudhoyono, who is seeking a second term.

Her party won only around 14% of the vote in the April 9 general elections, compared with more than 20% for the Democrats, and she is well behind Yudhoyono as preferred president in the opinion polls.

Golkar, the ruling party under the Suharto regime, was the main party in Yudhoyono's outgoing coalition but has split over whether to remain with the popular incumbent or try to seek the presidency for itself.

Golkar chairman Jusuf Kalla was Yudhoyono's vice presidential running mate in the 2004 elections, when they easily defeated Megawati on a platform of economic growth and clean government.

Kalla, Wiranto announce they will stand Golkar Party chairman and Vice President Jusuf Kalla and former Armed Forces commander Wiranto, head of the Hanura Party, announced Friday they would stand as president and vice president.

In a statement read by the secretary general of Golkar, Soemarsono, the candidates promised to work tirelessly to improve public welfare if they were elected.

The statement praised the capacities of the two candidates. Kalla said Wiranto was a businessman and a military officer who had brought peace to a number of areas of the country.

According to the declaration, Wiranto said Kalla had also been a significant figure in the resolution of conflicts and had served as a minister before becoming vice president.

Wiranto said that as the first pair to announce their candidacy, they had shown daring. His willingness to be nominated as a vice presidential candidate recognized the reality that his party had failed to achieve 10% of the vote in the April 9 elections.

Wiranto added that Hanura and Golkar shared a nationalist platform and were ideal partners. “Even the colors of our parties are the same,” he said.

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Aceh Party secures majority of seats in local assembly The Aceh Party, one of six local parties that contested elections in the former conflict area, has won the most seats in the provincial legislative council, it was announced on Thursday, The Jakarta Globe reported.

The final results, which were announced by the Aceh Independent Election Commission (KIP), after it finished counting votes from the province’s 23 districts and municipalities, showed the Aceh Party had secured 33 of the 69 seats in the provincial council.

From a total of 2,146,141 valid ballots, the Aceh Party received 1,007,173 votes, or 46.93%. Trailing in a distant second was the Democratic Party with 232,728 votes or 10.84%, followed by Golkar Party with 142,411 votes, or 6.64%.

The National Mandate Party (PAN) finished fourth with 93,060 votes, or 3.87%, while the Prosperous Justice Party (PKS) received 81,529 votes, or 3.80%.

The Democratic Party secured 10 seats in the provincial council, Golkar eight, PAN five, PKS four and the United Development Party (PPP) three. The remaining seats were split between the Aceh Mandate Party (PDA), another local party, and several national parties.

The Aceh Party, founded by former members of the separatist Free Aceh Movement (GAM), secured most of its support in former strongholds of the group in the north and east of the province.

SECURITYIndonesian, Chinese navies agree to boost cooperation The Indonesian Navy and the Chinese Navy have agreed to increase cooperation, focusing mainly on education and training, officials from both countries said, Antara reported.

The agreement was reached at a meeting between Indonesian Navy Chief of Staff Admiral Tedjo Edhy Purdijatno and Chinese Navy Chief of Staff Admiral Wu Shenghi in Qingdao, Shandong Province, China, earlier this week.

Purdijatno was in China to attend the 60th anniversary of the Chinese Navy.

Past naval cooperation between the two countries has also focused on education and training, said Indonesian Navy spokesman Commodore Iskandar Sitompul, adding cooperation in defense equipment was also discussed.

The Indonesian Navy has also recently discussed intensifying cooperation with the Japanese and Russian Navies.

LAW & ORDER Australian police help probe suspected Surabaya drug cartelAustralian Federal Police (AFP) have reportedly teamed up with international and US authorities to investigate an alleged drug trafficking network based in the East Java capital of Surabaya, Australian Associated Press reported.

The AFP will work alongside Interpol and the US Drug Enforcement Administration (DEA) to investigate the drug trade in Surabaya, according to reports in local media.

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The investigation follows recent foiled attempts to smuggle heroin and ecstasy from Thailand and China into the city, according to the reports.

Sudirman, chief of East Java's Narcotics Directorate, said Interpol, the AFP and DEA believed Surabaya had become a hub for drugs from elsewhere in Asia, Europe and South America.

He said there were apparent links to the Bali Nine heroin smuggling ring and an international syndicate with operations in Brazil.

ECONOMYSharp jump in March trade surplus Indonesia's trade surplus increased sharply to $3.27 billion in March from $2.52 billion in February, the Central Bureau of Statistics (BPS) said Friday, Dow Jones reported.

Imports in March fell 33.4% on year to $5.27 billion, while exports declined 28.9% to $8.54 billion, BPS said.

In February imports had tumbled 42.0% on year, while exports fell 32.9%.

Including imports to bonded zones where imported commodities are reprocessed for exports, the trade surplus was $2.01 billion, up from $1.26 billion in February.

"On a month-on-month basis, exports rose 20.6%, due to the significant increase in the volume of resource-based exports," BPS chairman Rusman Heriawan told reporters in a press briefing.

He said the prices of commodities also increased during the month, which helped to boost the value of Indonesia's coal exports by $444 million and that of crude palm oil exports by $217 million in March from a month earlier.

Inflation meanwhile fell to 7.31% in April as food price pressures eased and the rupiah strengthened, paving the way for the central bank to cut rates next week, Reuters reported.

The consumer price index (CPI) rose 7.31% in April from a year earlier, data showed on Friday, and the lowest rise since December 2007 when it was 6.59%. CPI rose 7.92% in March from a year earlier.

The latest data showed that monthly inflation fell 0.31% in April, following a 0.22% rise in the previous month. The monthly figures are not seasonally adjusted.

BPS’ Heriawan noted however that the country was entering a seasonal inflation period, with children due back at school in June and the Muslim fasting month to start in August, Kompas reported.

“The government needs to anticipate the likelihood of inflation,” he said. Brakes needed to be kept on any rises in fuel, power and water costs, he noted.

The stock market enjoyed a strongly positive week. The Indonesia Stock Exchange composite index posted the region’s largest gain for the week with a total 8.3% advance, closing on Friday at 1,729.58 after companies including major banks reported rising profits. The index had closed the week earlier at 1591.32.

The rupiah closed the week at 10,610 to the dollar, Bloomberg reported, compared to 10, 805 a week earlier.

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The rise made it the strongest performer along with the South Korean won in a week in which most regional currencies strengthened on optimism the region’s exports will rebound after Japan reported that industrial output grew for the first time in six months and a Chinese gauge of manufacturing climbed for a second month.

Indicators:

  February March March 09/March 08

Cumulative 2009

Total exports $7.08 billion $8.54 billion -28.87% $22.77 billionNon-oil & gas exports

$6.06 billion $7.27 billion N/A $19.54 billion

  March (y-o-y)

March(m-o-m)

April(y-o-y)

April(m-o-m)

Inflation 7.92% 0.22% 7.31% -0.31  Full year 2006 Full year

2007Full year 2008 First quarter 2009

GDP growth 5.5% 6.3% 6.1% 4.6%*Tourist arrivals February March Growth/loss

(m-o-m)Growth/loss

(y-o-y)421,555 511,314 21% 1.9%

Source: Central Statistics Agency* Bank Indonesia estimate

BUSINESS BRIEFSMACROECONOMYBI, Govt. reject high interest bids No bids were accepted for both a Bank Indonesia (BI) reverse-repo auction and a government debt auction failed to reach its target, as authorities spurned investor demands for high interest rates, Reuters reported.

BI said Thursday there were no winning bids at its 21-day reverse-repo auction because the rate was unfavorable. The bank received a Rp20 billion bid asking for a rate of 7.65%, higher than the weighted average rate of 7.6% at the previous reverse-repo auction.

BI had aimed to absorb Rp2 trillion from the auction held to absorb excess cash from commercial banks.

BI held Rp26.78 trillion worth of tradeable government bonds as of April 17, up from Rp21.32 trillion at the end of March, Finance Ministry data showed.

The Finance Ministry on Tuesday raised Rp2 trillion ($184.2 million) in a debt auction, short of its target of Rp3 trillion, as concern over the domestic political situation and outbreaks of swine flu pushed demand for higher interest rates.

The ministry only accepted about a quarter of the Rp7.75 trillion of total incoming bids in the auctions and rejected all bids for its seven-year and 15-year fixed-rate bonds.

Benny Tjandraputra, head trader for fixed income at Bank NISP in Jakarta, said the costs would have been too high for the government if the Finance Ministry accepted bids for bonds maturing in 2016 and 2024.

“Globally, investors are still worried with the swine flu pandemic,” he said, adding that domestic political uncertainty was another reason for investors to be wary.

The government has already raised more than 80% of its full-year gross debt issuance target.

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Corporate debt outflows less than expected in Q1 Net outflow of capital from private sector borrowing was less than expected in the first quarter, Finance Ministry data showed, with lower demand for dollars reducing pressure on the rupiah, Reuters reported on Friday.

The ministry’s data showed the country had net outflows of $197 million in the first quarter, significantly less than the $1.5 billion expected by the ministry, as many companies obtained financing from their own offshore affiliates.

Indonesian corporates had net inflows of $424 million in the fourth quarter as they borrowed more from offshore banks and non-bank institutions during the period.

The ministry, however, cautioned that corporates were likely to borrow less in the remainder of 2009 as the country’s economic growth slows.

It did not say whether it expects net corporate foreign debt outflows to be bigger in the rest of the year.

Bank Indonesia deputy governor Hartadi Sarwono said in March that total maturing corporate foreign debt this year was expected to be $22.6 billion, consisting of short-term corporate debt denominated in foreign currencies amounting to $17.4 billion and $5.2 billion in trade financing.

Minister says manufacturing set to recover The manufacturing sector may expand faster in the second quarter as economic growth gets back on track, Finance Minister Sri Mulyani Indrawati on Monday, The Jakarta Post reported.

Indrawati said the first quarter saw slowing activity as a reaction to the fourth quarter of 2008 when demand nose-dived, causing producers to halt production, Indrawati said.

She said a rise in car sales and electricity consumption by industries in March showed the economy had started moving again, supported by still-high purchasing power.

"If purchasing power remains strong, as did consumption in the first quarter, then they (manufacturers) will begin to see a decline in their stocks, making them start producing goods again," said Indrawati.

According to the Finance Ministry, electricity consumption by industries in March rose 2% from February, compared to a contraction of 3% in the last quarter of 2008.

The central bank has estimated that the manufacturing sector may expand 2% this year as compared to the 3.7% growth it recorded last year.

Indrawati said the economy could grow higher than that. "I still think a range of between 3% and 4% is too low. I think it will be between 4% and 4.5%.

INVESTMENTIT giant expands to Indonesia Ohio, US-based Teradata, a giant information and technology firm specializing in data warehousing, is set to open an office in Jakarta despite the global economic crisis, The Jakarta Globe reported.

“Indonesia is one of the largest markets in Southeast Asia,” said Loh Giap Lim, country manager for Tdata Indonesia, the local unit of Teradata.

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The company said it has several clients, the biggest being a major publicly listed telecommunications provider, Lim said. But, he added, “I would not expect big growth in the first year.”

“Aside from the telecom sector, we also focus on clients in banking, manufacturing, and retail,” Lim said.

Ikhsan Binarto, an IT analyst at Jakarta-based Optima Sekuritas, said Teradata's move was a smart one because there were not too many big competitors in the current IT market, especially in data warehousing.

ArcelorMittal shelves steel project The world's largest steel producer ArcelorMittal has shelved its plans to set up steel facilities in Indonesia after finding the proposed endeavor to be unviable in the wake of the global economic slowdown, India’s Economic Times reported on Saturday.

"We have looked at the feasibility of establishing steel facilities in Indonesia and, at this time, we are not pursuing the project," ArcelorMittal chairman Lakshmi N Mittal said while announcing the company's results.

The steel giant had not made any formal announcement about the investment proposed in the Indonesia project, but media reports said it was to the tune of $10 billion.

STATE CONCERNSForeign companies treated as locals in merger, acquisitions Foreign companies would be given the same treatment as local companies when registering pre-notification of merger or acquisition plans with the Commission for the Supervision of Business Competition, an official said Thursday, The Jakarta Post reported. 

“We have a lot of foreign companies with representative offices in Indonesia, and just like local companies, they will have to comply with the regulation we have put down in the guideline,” director of communication for the commission, A. Junaidi, told a press conference. 

He added that the pre-notification of merger and/or acquisition to the commission is voluntary for companies but incentives are provided for those who chose to do so. 

“The companies which pre-notify the commission will not have their merger or acquisition nullified by the law should they do any illegal conduct after the merger. For instance, if after a merger a company is monopolizing the market, we will not demand a nullification of the merger. Instead, we will press charges under the monopoly law,” he said. 

March tourist arrivals up 1.9% from year ago Foreign tourist arrivals rose just 1.9% in March from a year ago, data from the Central Bureau of Statistics showed on Friday, as a global economic slowdown curbed foreign travel, Reuters reported.

In March, 511,314 foreign tourists visited Indonesia, up from 502,000 a year ago, while in the first quarter the number was almost unchanged at 1.41 million.

The government hopes to attract 7 million foreign tourists to visit Indonesia this year, up from 6.32 million in 2008.

Tourism accounts for about 3% of gross domestic product in Indonesia, but some areas, including Bali, are heavily dependent on tourism for jobs and growth.

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SOEsGovt. allocates $12.7B in capex for SOEs The government will increase capital expenditure for state-owned enterprises (SOEs) by 24% this year, State Minister of State Enterprises Sofyan Djalil said Monday, The Jakarta Post reported.

“The government has allocated Rp152.05 trillion ($12,7 billion) for capital expenditure at SOEs in 2009, up Rp128,32 trillion in 2008,” Djalil told the House of Representatives.

Companies operating in electricity and gas will use Rp60.2 trillion - the biggest portion of the capital expenditure - while transportation and telecommunication companies will absorb Rp40.86 trillion.

He said the SOEs were expected to earn Rp70.93 trillion ($655 million) in total profits this year, lower than the Rp79.27 trillion net profit earned last year.

Declining profit of oil and gas company PT Pertamina would be the major factor in the decline. "Pertamina contributed Rp30 trillion of net income last year. This year the company will probably only contribute Rp19 trillion to Rp20 trillion, or a 30% decline," Djalil said.

Djalil added that last year 118 enterprises made profits, while 23 enterprises suffered losses.

At least 10, including PT Pertamina, PT Pupuk Sriwijaya, PT Telkom, PT Bank Mandiri and PT Aneka Tambang had contributed the largest profits.

Meanwhile, secretary to the State Enterprises Minister Said Didu told reporters on Monday the ministry has sent notification letters to 47 companies as they have not fulfilled their responsibilities to report their annual returns.

"They have various reasons for this delay," Didu added. "We will keep asking for their annual reports because the reports will show their key performance indicators," Didu stated

Telkom’s 2008 unaudited profit drops 20% State-owned telecommunication company PT Telkom saw its unaudited profit drop by about 20% in 2008, a minister said on Monday, The Jakarta Globe reported.

“Telkom’s net income in 2008 declined to Rp10.3 trillion [$957.9 million] from Rp12.86 trillion in 2007,” Sofyan Djalil, the State Minister for State Enterprises, said in a presentation to the House of Representatives’ Commission VI overseeing state-owned enterprises.

The unaudited profit figure for Telkom is its worst in three years, with the company posting an annual profit of Rp7.99 trillion in 2005, rising to Rp11.01 trillion in 2006 and Rp12.86 trillion in 2007.

Speaking to reporters, Rinaldi Firmansyah, Telkom’s president director, acknowledged Telkom’s profits had declined in 2008, saying that it was due to several factors, with foreign exchange losses above Rp1 trillion playing a major role.

PRIVATE SECTORAstra Q1 net profit down as auto sales fall

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Indonesia's largest automotive distributor and one of the country's most diversified business groups, PT Astra International, said first quarter net profit fell 17% as sales of motorbikes and cars fell in the country, Reuters reported.

Astra, controlled by Singapore's Jardine Cycle & Carriage Ltd, reported net profit of Rp1.88 trillion ($173.3 million), down from Rp2.25 trillion a year ago.

The company outperformed the overall market in terms of vehicle sales, with total vehicle sales down 13% to 58,000 units from a year ago, against a 26% decline in the sector.

Astra's motorcycle sales dropped 9% to 585,000 units from a year earlier, against a 15% decline in the industry.

"Astra's business has been affected by the global economic slowdown, but it is too early to judge the impact of this on the group performance during the first half," president director Michael D. Ruslim said in a statement.

"An easing in inflation pressure and lower interest rates recently are expected to bolster market sentiment," Ruslim said.

Astra group includes plantation firm Astra Agro Lestari and heavy equipment distributor United Tractors. The firm distributes a number of automotive brands including Toyota, Daihatsu Motor Co Ltd, Peugeot SA, Isuzu Motors Ltd.

Indocement Q1 net profit up 33% PT Indocement Tunggal Prakarsa, Indonesia's second-largest cement maker, reported a 33% rise in its first quarter net profit on Thursday, Reuters reported.

Indocement, which has a stock market value of $1.87 billion, said net profit for January-March rose to Rp502.7 billion ($46.3 million) from Rp378.9 billion a year ago, while revenue climbed 6.5% to Rp2.19 trillion.

Indofood to offer Rp1T bonds in June The world's largest noodle maker PT Indofood Sukses Makmur will offer bonds worth Rp1 trillion ($95 million) to the market from June 11 until June 15, The Jakarta Post reported.

A statement from the company says the bond, which will have a maturity period of five years, will be offered with fixed interest rates that will be paid every three months. The bond has been ranked AA from Indonesia rating agency Pefindo.

The company will use 98.6% of the proceeds to refinance its debts that matured in July.

The company has appointed PT DBS Vickers Securities Indonesia, PT Danareksa Sekuritas, PT ING Securities Indonesia, PT Kim Eng Securities and PT OSK Nusadana Securities Indonesia as underwriters in the bond issuance.

Indofood posted a 70% decline in net profit in the first quarter of this year to Rp110.4 billion ($10.26 million) from Rp373.5 billion in the same period last year, on foreign exchange losses and higher financing costs.

Despite the loss, Indofood's net sales grew 0.7% to Rp8.91 trillion in the first quarter.

IndoAgri Q1 net profit down 55% to Rp240B Plantation group Indofood Agri Resources reported a 55% plunge in its first quarter net profit to Rp240 billion, while turnover dived 30%, The Business Times reported. Revenue came to Rp1.99 trillion.

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During the quarter, the group saw CPO price fall to an average of $577 a ton - down from $1,156 a ton in the first quarter of 2008, causing the decline in group revenue.

This reflected the lower selling prices of palm oil, rubber, edible oil products and copra-based products, the management said in a statement.

CPO sales volume was marginally up 1% to 170,507 tons while margarine volume saw a 14% growth compared to the same quarter last year.

Given the lower palm oil, rubber and edible oil products selling prices in Q109, all business divisions ended with lower revenue against the same period last year.

On a positive note, the demand for margarine products picked up with 14% volume growth in the first quarter this year.

Indonesia remains the biggest market contributing some 76% of its turnover in the first quarter, while the rest of Asia took up about 14%.

Unilever Q1 net profit up 9.4% PT Unilever Indonesia, the local unit of Anglo-Dutch conglomerate Unilever Plc, reported a 9.4% rise in its first quarter net profit on Wednesday, Reuters reported.

Unilever said net profit for January-March rose to Rp769.1 billion ($70.82 million) from Rp703.2 billion in the year ago period, while sales revenue climbed 18.4% to Rp4.48 trillion.

United Tractors Q1 net profit up Heavy equipment maker and coal mine contractor PT United Tractors, on Wednesday said first-quarter net profit rose 57% to Rp812.3 billion ($74.8 million), Reuters reported.

It reported revenue of Rp6.97 trillion in the January-March period, up 20.4% from Rp5.79 trillion a year ago.

Astra Agro Q1 profit down on CPO price Indonesia's largest listed plantation firm, PT Astra Agro Lestari, said first quarter net profit fell 74% as crude palm oil (CPO) prices tumbled and production slowed, Reuters reported.

Astra Agro, which has a market capitalization of $2.3 billion, said net profit dropped to Rp217.7 billion ($20.1 million) in the January-March period, from Rp827.05 billion, while revenue fell 38% to Rp1.41 trillion.

Last week, the company, which is controlled by PT Astra International, said its CPO production fell 9.1% to 225,984 tons in the first quarter. It expected CPO output to rise to 990,000 tons in 2009, from 981,538 tons in 2008.

Telkomsel subscribers increase, Excelcomindo down The cellular unit of state-owned PT Telkom, PT Telkomsel, added 5 million new subscribers in the first quarter of this year to 70.3 million from 65.3 million a year earlier, Telkom chief executive Rinaldi Firmansyah said Monday, Dow Jones reported.

"We expect to net 10 million new subscribers for the full year of 2009," Firmansyah told reporters.

Firmansyah said industry-wide new cellular phone subscribers in Indonesia could hit 20 million in 2009.

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Telkom owns a 65% stake in PT Telkomsel, the country's largest cellular services company.

Meanwhile, the number of subscribers of the third largest operator, PT Excelcomindo Pratama, dropped by 1 million in the first quarter of this year as the company increased the price of its SIM cards, The Jakarta Post reported.

The company's president director, Hasnul Suhaimi, said the number of subscribers had dropped to 25 million from 26 million in 2008.

"We increased the price of SIM cards to reduce the number of people who buy XL cards for one-time use and then throw them away," Suhaimi said, adding that this occurred because it was cheaper to buy new SIM cards than to recharge existing ones.

However, XL was still on track to reach its target of 30 million subscribers by the end of 2009, he said, adding that demand usually picked up in the second and third quarters of the year.

BANKSQ1 net profit jumps at four large banks Four large banks, three of them state-owned, reported a jump in their first quarter profit after Bank Indonesia cut its key interest rate to boost lending in the country.

PT Bank Central Indonesia (BCA), Indonesia's largest by market value, said profit in the three months ended March 31 rose 42% from a year earlier to Rp1.6 trillion. Net income at PT Bank Negara Indonesia (BNI), the nation's third-biggest state-run bank, surged fourfold to Rp635 billion, Bloomberg reported.

BCA and BNI said loans expanded 27% and 29% respectively from a year earlier.

PT Bank Mandiri, the biggest by assets, said first quarter lending jumped 31% to Rp177 trillion.

Profit was little changed at Rp1.4 trillion after it added provision for non-performing loans, Mandiri CFO Pahala Mansury said. Without the provision, profit would have jumped by more than 40%, he said.

The country's second largest bank by assets, PT Bank Rakyat Indonesia (BRI), booked an increase in its net profit of 22% in the first quarter of this year on higher interest income.

BRI's net profit jumped to Rp1.72 trillion ($159.9 million) in the first quarter of this year compared to Rp1.41 trillion in the same period a year earlier as net interest income increased by 15.58% to Rp5.38 trillion as of March 2009. Interest income constitutes 80% of BRI's total revenue, The Jakarta Post reported.

BRI loans grew 39.5% to Rp165.2 trillion as of March 2009. Its assets also increased by 24.7% to Rp250.14 trillion in the same period, making it the country's second largest bank by assets in Indonesia after Bank Mandiri.

Meanwhile, mid-sized lender PT Bank CIMB Niaga posted a net profit for the first quarter of 2009 at Rp262.7 billion compared to Rp323.6 billion previously, Reuters reported.

Bank UIB to be converted into shariah bank Indonesia's largest private bank PT Bank Central Asia (BCA) will convert its newly acquired PT Bank UIB into a shariah unit to start operations in September, Asia in Focus reported.

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“Bank UIB will operate as a shariah bank after the process of conversion has been completed and a license has been secured from Bank Indonesia,” BCA vice president Jahja Setiatmadja said.

BCA acquired Bank UIB for Rp242.67 billion ($22 million) in November 2008.

The shariah bank, the name of which has yet to be decided, will start operations with assets of Rp705 billion, Jahja said, Investor Daily reported.

Citibank posts Rp1.66T net profit in 2008 Citibank Indonesia announced Tuesday it recorded a net profit of Rp1.66 trillion last year on the back of growing retail banking, credit card business and personal loans, The Jakarta Post reported.

The bank's assets rose 18% to Rp52.3 trillion from a year earlier, Citibank said. Its loan to deposit ratio (LDR) stood at 79.47% and capital adequacy ratio (CAR) at 24.12%.

The financial report maintains Citibank as the largest foreign bank by assets in Indonesia, the bank said. It operates in corporate, commercial, investment and consumer banking.

POWERPLN, Chinese contractors agree to transact in Renminbi State power company PT PLN and Chinese power project contractors have agreed to use China's Renminbi currency in transactions, a senior official of PLN said on Thursday, Xinhua reported. PLN deputy director Rudiantara said PLN has discussed the adoption of the Renminbi with its Chinese counterparts and its use will help Chinese contractors since they don't have to exchange the funds they receive from PLN.

"They calculate their production cost in Renminbi. Besides that, the Renminbi's value has been increasing lately. Our Chinese counterparts would earn more with Renminbi and so do we," Rudiantara was quoted as saying by Detikcom.

China and Indonesia have agreed on a three-year $15 billion swap pact. The agreement signing took place in Beijing late last month.

Bukit Asam power plant completed in 2011 The construction of a power plant in South Sumatra by state-owned coal mining company PT Tambang Batubara Bukit Asam will be completed in April 2011, Antara reported.

The project is to commence soon at Bukit Asam's Tanjung Enim mine and will cost around $41.4 million, company secretary Eko Budhiwijayanto said.

The power plant will have a capacity of 30 MW and save the company at least $3.3 million in operating costs a year.

The company signed an engineering, procurement and construction contract with a consortium of China Overseas and PT Weltes Energi Nusantara early last month.

OIL & GASWinners of new oil, gas blocks announced The Energy and Mineral Resources Ministry on Wednesday announced the winners of 11 new oil and gas blocks which are expected to draw in a total investment of $189 million, The Jakarta Post reported.

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The ministry’s Director General for Oil and Gas, Evita H. Legowo, said the investment for the first three years would be for geological and geophysical studies, seismic surveys and drilling of exploration wells.

The government will also receive another $21.65 million in the form of signatory bonuses, she said.

The 11 blocks were offered under a so-called “direct-offer mechanism” in which oil and gas companies may propose to the government to carry out a joint study in blocks which they are interested in.

During any subsequent tender process, these companies will get the first priority to develop the blocks.

The government initially offered 15 blocks in December. One block did not attract any investor and three others attracted some oil and gas companies, but none met government criteria. Kalimantan CBM to supply Bontang Coal bed methane (CBM) output in Kalimantan is expected to start supplying the Bontang gas plant in East Kalimantan starting in 2012 to meet growing demand for gas on the domestic market, a senior official at the Energy Ministry said on Tuesday, The Jakarta Globe reported.

The government has awarded four CBM development contracts in the province, estimated to have reserves of 82 trillion cubic feet.

Contract winners comprise a consortium of state firm subsidiary Pertamina Hulu Energi Metana Kalimantan and Ephindo-Sangatta West CBM; a consortium of Kutai West CBM and Newton Energy Capital Limited; as well as Indobarambai Gas Methan and Barito Basin Gas.

The Pertamina-Ephindo group is expected to pioneer the project, with initial production to start in 2012, said Director General of Oil and Gas Evita Legowo.

“With the CBM that is produced by Ephindo, the gas from Bontang can be used to supply liquefied natural gas (LNG) that is needed by Pertamina for the kerosene conversion program for the long term,” she told reporters, referring to the kerosene-to-LNG conversion program currently being rolled out by the government.

PGN's net profit falls 45% in 2008 Publicly listed state gas distributor PT Perusahaan Gas Negara (PGN) said Friday that last year's net profit dropped 45.5% on foreign exchange losses, The Jakarta Post reported.

PGN net profit fell to Rp633.8 billion ($60.2 million) in 2008 from Rp1.16 trillion a year earlier, the company said in a statement filed to the Indonesia Stock Exchange.

The fall in the net profit was because the company posted huge foreign exchange losses, soaring to Rp2.5 trillion in 2008 from only Rp504 billion in 2007.

From the revenue side, the company showed solid growth, posting a 45% increase to Rp12.7 trillion as compared to Rp8.8 trillion in 2007.

MININGAdaro returns to net profit in Q1 Indonesia's largest coal producer by market value, PT Adaro Energy, said it recorded a first quarter net profit of Rp1.145 trillion from a Rp12 billion loss a year ago on higher coal prices, Reuters reported.

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"The significant increase is attributed to higher average achieved selling prices of Envirocoal, which increased revenue 91% to Rp6.533 trillion,” Adaro said in a statement on Thursday.

Adaro, which has a stock market value of $3.02 billion, said coal production rose 8% to 9.03 million tons in the first quarter of this year, up from 8.37 million tons a year ago despite wet weather earlier this year.

Despite higher production, coal sales fell 7% to 8.73 million tons.

In the January-March period, volume of coal shipped by its unit PT Indonesian Bulk Terminal fell 72% from in 2008.

White Energy completes clean coal plant Australia's White Energy Company, in conjunction with Bayan Resources, says it has built the world's largest clean coal plant at the Tabang mine in East Kalimantan, Australian Associated Press reported on Monday.

Indonesian coal company Bayan Resources owns the mine.

"It will be our first full commercial production, large-scale operating plant, providing the first steady revenue stream to White Energy," chief executive John Atkinson said.

White Energy uses technology from Australia's Commonwealth Scientific and Industrial Research Organization (CSIRO) to upgrade low-quality coal to reduce its moisture content, allowing it to burn more cleanly.

Antam unaudited Q1 net profit down 87% State-owned mining company PT Aneka Tambang (Antam) posted an audited net profit for the first quarter of 2009 at Rp90 billion ($8.55 million), an 87% decrease from the same period last year, according to a company’s release received by Concordreview.com on Friday.

The decrease was attributed to lower demand for nickel which decreased by 60% to 801,939 metric tons while average selling price of nickel ore fell to $27.89 per metric ton.

Although the global oil prices decreased in the first quarter of this year, the average fuel price for the Indonesian market remained stable due to rupiah depreciation against dollar. At the same time, the sales price of Antam’s nickel plunged following the slump in global nickel prices as a result of the global economic crisis.

Antam’s net profit margin decreased to 3% in the first quarter of 2009 compared to 32% in the same period last year.

However, Antam posted a 26% increase in sales to Rp2.64 trillion due to higher revenue from gold and silver commodities.

For the first time in Antam’s history, gold sales became the biggest contributor to total sales, reaching Rp2.11 trillion or 80% of sales in the first quarter of 2009. The second largest contributor to sales was nickel ore, generating Rp259 billion or 10% of sales. Ferronickel was the third largest contributor, generating Rp137 billion or 5% of total sales.

Earlier this week, The Jakarta Post reported Antam is looking for partners to develop a ferronickel project in Halmahera, Maluku after its partnership with Australian mining giant BHP Billiton collapsed last year. Antam director for development Tato Miraza said that under a new partnership, Antam would take a majority stake in the project estimated to be worth $1.8 billion.

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