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MP3EI PROGRESS AND INVESTMENT OPPORTUNITY IN INDONESIA Presented In: First Joint Workshop Indonesia-Korea Hotel Borobudur Jakarta, 3-4 Sept 2012 By: Eddy Satriya Head of International Cooperation Division Secretariat of KPE3I COMMITTEE FOR ACCELERATION AND EXPANSION OF INDONESIA ECONOMIC DEVELOPMENT KP3EI 1

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Page 1: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

MP3EIPROGRESS AND INVESTMENT OPPORTUNITY

IN INDONESIA

Presented In:First Joint Workshop Indonesia-KoreaHotel Borobudur Jakarta, 3-4 Sept 2012

By: Eddy SatriyaHead of International Cooperation Division

Secretariat of KPE3I

COMMITTEE FOR ACCELERATION AND EXPANSION OF INDONESIA ECONOMIC DEVELOPMENT

KP3EI

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Rich Natural Resourcesmost of them are still intact to be processed into higher VA products

Natural Gas Thermal Coal Geothermal Palm Oil Cocoa Tin Nickel BauxiteFrequency Spectrum

Key Metrics

About 165 TCF of

reserves at production rate ± 3 TCF

pa

World second largest

exporter

Home of 40% of world’s

resources (the largest

in the world)

World’s largest

exporter; >19 mil tons per

year

At 770 thou tons/year, world’s 2nd

largest producer

At 65 thou tons/year, world’s 2nd

largest producer

Own ± 12% of world’s reserves

(4th largest)

World’s 7th

largest reserves;

world’s 4th

largest production

700 MHz outside

Java, Potential

arrangement for Java

area

2300-2360 MHz urban nationwide

About 40% is assumed feasible. Up to now, 1.200 MW has been developed.

Will be at least partially processed

domestically by 2013 (new mining law:

4/2009)

• Abundant resources for gas-based energy and petrochemical industries

• Not including Non-Conventional Gases, from Coal Bed Methane and Coal Gassification

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148

10794

57

46

37

2826

17

Legislative

Demokrat

Golkar

PDI-P

PKS

PAN

PPP

PKB

Gerindra

Political Stability: the world’s third largest democracy

Appointed

Appointed

38%

Directly

elected

Directly

elected

62%

0%

20%

40%

60%

80%

100%

2002 2007 2009Source: World Bank, 2009

% of appointed local government heads vs. directly elected

In election year 2009, President wins

more than 60% votes from 176 million

registered voters

Relations between the executive and legislative

branch of government seems poised to display

unprecedented cooperativeness

(election year 2009)

Source : The Investment Coordinating Board of the Republic of Indonesia, 2011

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Page 10: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

G-20 members

shares 85% of

world’s GDP

We’re in the Club, already

Source : The Investment Coordinating Board of the

Republic of Indonesia, 2011

10

Country Population (million) GDP (USD Billion)

United States of America 309.6 14,660

China 1,312.5 5,824

Japan 126.8 5,461

Germany 83.0 3,317

France 62.9 2,563

United Kingdom 62.2 2,247

Brazil 193.3 2,087

Italy 60.1 2,052

India 1,184 1,684

Canada 34.0 1,574

Russia 141.7 1,479

Australia 22.2 1,232

Mexico 112.5 1,039

Republic of Korea 49.5 1,014

Turkey 73.3 735

Indonesia 243.0 706

Saudi Arabia 27.1 434

Argentina 40.5 370

South Africa 49.1 364

Page 11: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

Indonesia’s Economy will be the

6th Largest in the World by 2030

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2014PDB: US$ ~ 1,2 bill

Income/Cap: US$ ~ 4.800

The 14th largest economy in the world

“From its current position in G-20

rank, Indonesia aspire to become 10

largest Economy in 2025”

Stepping up to Global Influence

2025GDP ~US$ 4.3 trill

Income/cap is predicted ~US$ 14,900 (high income country)

The 10th largest economy in the world

2010GDP ~ US$ 700 bill

Income/cap US$ 3,000 (2010)

The 17th largest economy in the world

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Page 14: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

Indonesia Economic Corridors: Masterplan

Basically MP3EI is based on these

strategic initiatives:

1. Encourage a large scale investment

realization in 22 main economic

activities

2. Synchronization of national action plan

to revitalize the real sector

performance

3. The development of center of

excellence in 6 (six) economic

corridors

Main strategy of MP3EI:

1. Economic potential development

through economic corridor

2. Strengthening the national connectivity

3. Strengthening national human

resources capability and science and

technology

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MP3EI and Existing National Planning

Medium Term Nat. Plan

(Pres.Regulations)Medium Term Nat. Plan

(Pres.Regulations)

Longterm Nat. Plan

Law 17/2007

Medium Term Nat.

Plan

(Pres.Regulations)

Medium Term Nat. Plan

(Pres.Regulations)Medium Term Nat. Plan

(Pres.Regulations)(Pres.Regulations)

Nat. Annual Plan

MP3EI

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Six economic development corridors as

the backbone of MP3EI

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Economic Corridor’s

Unique Development Theme

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Page 18: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

22 main economic activities in 8 main programs of

MP3EI are identified in each economic corridor

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Page 19: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

The Momentum for MP3EI accomplishmentmust be maintained

▪ There have been some significant achievements over

the past few months : 94 projects have gone ground

breaking in 2011, 74 KPIs & its enablers

requirements (infrastructure, regulation & HR Sci &

Tech) within prioritized KPIs have been identified

and prioritized.

▪ But the challenges ahead are still heavy, currently 72

projects (both private sector and infrastructure

projects) have been identified experiencing

difficulties in the land

acquisition, mining permits, business licenses, the use

of forest, etc (data was obtained during the meeting

with investors on February 14-15, 2012).

▪ The debottlenecking of these challenges must be

done quickly, accurately and strategically as

maintaining momentum is the key to MP3EI success

- "not business as usual” approach should be

implemented.

.”. big plans outlined in the Masterplan of

Acceleration and Expansion of

Indonesia Economic

Development, MP3EI, but the program is

considered slow.”

“MP3EI did not run in

accordance with

the 2011 target, next year it will

likely be suffering a similar

situation..”

There have been significant achievements of

the MP3EI implementation, but there are

still many challenges ahead:

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Page 20: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

To guard and monitor the implementation of MP3EI (especially duringthe period of 2011 – 2014), implementation team has been form(KP3EI)

The team is chaired directly by the President. Coordinating Ministerfor Economic Affairs chairs the KP3EI’s daily operations.

The national team (KP3EI) has 9 working teams, comprises of 3 inter-sectoral working teams and 6 economic corridors teams.

Those working teams is coordinated and facilitated by NationalSecretariate.

To strengthen the implementation coordination and to betterfacilitate various problems at the fields, provincial governments isrequested to form the similar teams.

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Page 21: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

KP3EI

21

Taking care of the development:

Supported by 3 cross-sectoral pillars

6 Economic Corridors

Regulation

Connectivity

Human Resources & Science Technology

Page 22: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

Chair : President of RI

Co Chair : Vice President of RI

Executive Implementation Team

Chair : Minister of CMEA

Co Chair- 1 : Minister of National Development

Planning / Head of Bappenas

Co Chair- 2 : Head of National Economic

Committee (KEN)SECRETARIAT

WG-KEJawa

WG-KE*Sumatera

WG-KESulawes

i

WG-KEKalimantan

WG-KEBali-NT

WG-KEPapua-

Kep.Maluku

Working Team on REGULATION

Working Team on CONNECTIVITY

Working Team on Human Resources and Science & Technology

Note:

*WG-KE: Working

Group on Economic

Corridor

Organizational Structure of KP3EI(Presidential Decree 32/2011)

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Page 23: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

Major paradigm shift in MP3EI

projects planning and implementation –

Projects can no longer be developed with a

‘Silo mindset’

Projects will be developed to support the main

economic activity’s growth through supporting KPI

(group of investment activities)

Private

sector

investment

Connectivity RegulationHR/ScienceTe

ch

Main

economic

activity A

Main

economic

activity B

Main

economic

activity C

Main

economic

activity D

Main

economic

activity E

Main

economic

activity X

Private sector

investmentConnectivity Regulation

HR/ScienceTe

ch

Main

economic

activity A

Main

economic

activity B

Main

economic

activity C

Main

economic

activity D

Main

economic

activity E

Main

economic

activity X

23

All projects should be

developed to support

the development of

production centers in

each of the main

economic activities

Page 24: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

Kawasan Perhatian Investasi (KPI) or Investment Focused Area

is the driver for infrastructure, regulation and HR&Science Tech.

project development

1. Production Center is one investment activity concentrated in a specific

area within a corridor

2. KPI is a collection of one or several production center/ investment

activities agglomerated in the adjacent area

KPI

Regulation

(National + Local)

HR&Scien

ce TechConnectivity

KPI locations in each corridor need to be identified for the reference to determine

the development of infrastructure projects (Connectivity WG), educational

facilities and the enhancement of technology / innovation (HR&ScienceTech

WG), as well as to facilitate regulatory improvements (Regulation WG).

KPIHypothetical

Illustration

Production center

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Page 30: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

To date, the total investment estimated in MP3EI has increased to IDR 4.925 Trillion of which infrastructure investment’s contribution is up to 48%

Economic Corridor

Indication of Priority

KPI

Number of KPI

# of private sector

investment project

Total Investment Indication up to 2014(IDR Billion)

Private sector investment

InfrastructureHR&Science-

Tech

Sumatera 13 22 168 555.965 581.357 955

Jawa 18 34 119 304.433 1.118.685 467

Kalimantan 17 36 222 903.775 220.780 324

Sulawesi 11 28 126 214.847 201.499 382

Bali-NT 8 23 46 129.884 87.293 95

Papua-Maluku 7 8 44 448.605 155.631 166

T O T A L 74 151 725 2.557.509 2.365.245 2.388

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Page 31: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

The funding gap for infrastructure investment is identified as

much as IDR 638 Trillion (~USD 71 billion) – 27% of total

infrastructure investment required

Economic Corridor

Infrastructure investment up to 2014(IDR Billion)

APBN BUMN Private PPP Mix Funding Gap Total

Sumatera 39.427 69.014 49.985 60.210 23.100 339.709 581.357

Jawa 82.383 265.566 390.267 328.518 3.700 49.468 1.118.685

Kalimantan 25.214 53.053 56.399 0 0 86.114 220.780

Sulawesi 9.352 40.551 14.680 19.398 0 117.518 201.499

Bali-NT 22.712 23.883 27.841 10.268 0 2.589 87.293

Papua-Maluku 6.903 45.342 9.149 44.890 6.437 42.909 155.631

T O T A L 185.991 497.409 548.321 463.284 33.237 638.307 2.365.245

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Page 32: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

The Government is committed to invest in HR & Science

Technology programs to provide qualified human resources

and required technology

Economic Corridor

HR&Science Tech WGKPI related programs

up to 2012

HR&Science Tech WGNon-KPI related programs

up to 2012

Number of Project

Investment Value(IDR Billion)

Number of ProjectInvestment Value

(IDR Billion)

Sumatera 11 313,5 51 641,7

Jawa 33 280,2 35 187,1

Kalimantan 8 71,3 36 252,4

Sulawesi 10 131,4 24 250,4

Bali – NT 2 10,0 20 84,6

Papua – Kep. Maluku 30 61,5 19 104,1

TOTAL 94 867,9 185 1.520,3

Notes1. Figures are validated as per 21 Februari 20122. HR&Science Tech WG programs consists of:

a) Course/Trainingb) Vocational High Schoolc) Community colleged) Polytechnic

e) Universityf) SINAS ()g) SIDA ()h) PKPP

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Page 33: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

Summary of groundbreaked projects in 2011

Economic Corridor

Number of projectInvestment Value

(IDR Billion)Total

InfrastructurePrivate sector

investmentInfrastructure

Private sectorinvestment

ProjectInvestment Value

(IDR Billion)

Sumatera 17 2 35.429 62.505 19 97.934

Jawa 8 8 64.674 65.497 16 136.071

Kalimantan 3 12 1.586 14.644 15 16.230

Sulawesi 1 26 3.000 142.267 27 145.267

Bali-NT 6 1 36.065 829 7 36.894

Papua-Kep.Maluku 3 7 1.011 66.120 10 67.131

Total 38 56 131.765 351.862 94 490.527

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Page 34: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

Constrains and Problems in Project Implementation

Corridor Total Projects Land Aquisition Permits Overlapping Funding

Sumatera 10 2 7 3 0

Jawa 2 2 0 0 0

Kalimantan 24 19 5 2 3

Sulawesi 7 1 4 2 0

Bali - NT 5 0 5 0 2

Papua - Kep.

Maluku11 3 7 4 0

TOTAL 59 27 28 11 5

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Page 35: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

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Page 36: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

MP3EI major milestones (select sample)

May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar onwards

2011 2012

KP3EI Secretariat

Connectivity WG:

Planning, monitoring

and debottlenecking

infrastructure projects

HR&Science-Tech WG:

planning and

implementating HR &

Science-Tech programs

* 74 Priority KPI here stands for Kawasan Perhatian Investasi or Investment Focused Area, which is a collection of one or several production center/ investment activities agglomerated in the adjacent area.

** 597 infrastructure projects comprise of 294 national projects and 303 priority KPI related infrastructure projects.

MP3EI launch

(six GB projects)

KP3EI leadership

meeting

(SBY), June 6

KP3EI

Secretariat

formed

Connectivity

WG formed

HR&Scienc

eTech WG

Formed

1. Identification of bottlenecking issues, development of

resolutions and monitoring for MP3EI GB projects

2. Dispute settlement – success story

3. Regulations debottlenecking

Final validation of

597 Projects**

Connectivity

project

prioritization

74 Priority

KPI*

Action plan (form A,B,C) validation and collection

from line ministries

Wave 1 projects

planning and

selection

2011&2012 GB

projects monitoring

& debottlenecking

MP3EI projects

debottlenecking and

dispute settlement

inter-ministrial level

1. Development of supply based HR&Science-Tech program

2. Coordination with corridor WG to get feedback on demand

based assessment needs and qualifications

“Bilateral&multilateral’s support for Shadow PMO”

meeting and ongoing discussion with potential donors

Connectivity

WG plenary

meeting, 24 Jan

KP3EI

leadership

meeting

(SBY), Dec 13

KP3EI

coordination

meeting

(Hatta), Feb 24

KP3EI

coordination

meeting

(Hatta), Dec 8

Page 37: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

MP3EI overview – IDR 4,012 Trillion (~USD 445 billion) was identified as the total investment value over the next 15 years

21%

18%

10%

51%

2,226

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Planned & Proposed

Private Sector Investments in the 6 economic

corridors

1,786

Planned Infrastructure

Investments by the

Government & Private Sector

Indication of Investment in Main Economic Activities(IDR Trillion)

Infrastructure Investments’

Indicative Value Based on Investor

type

Private

Government

SOE

Mix

(PPPs)

Key highlight of identified investment of MP3EI

To support the development of the main

economic activities within the corridors

(MP3EI), the total estimated investment value

over the next 15 years for both private sector

investment projects and the supporting

infrastructure is around IDR 4,012 Trillion

(~USD 445 billion)

USD 180 billion is estimated expenditure for

infrastructure both by government and the

private sector over the next 15 years.

Since the launch of MP3EI on 27th May 2011 the

following progress has been achieved by the

implementing agency, KP3EI:

Over USD 54 billion worth of projects

have reached ground breaking and

commenced construction in the last 6

months

29 new laws and regulations passed in the

last 6 months to support MP3EI

implementation, including the new land

acquisition law37

Page 38: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

List of potential ground breaking

projects in 2012

*List of select sample of ground breaking projects in 2012 is available in Annexure

EconomicCorridor

Number of ProjectInvestment Value

(IDR Billion)Total

Infrastructure Private sector Infrastructure Private Sector ProjectInvestment Value (Rp. Billions)

Sumatera 12 12 12.231,75 23.625,96 24 35.857,71

Jawa 14 22 138.812 57.564 36 196.376

Kalimantan 4 6 2326,4 64.053 10 66.228,4

Sulawesi 0 9 0 10.320,8 9 10.320,8

Bali-NT 2 2 140 45,22 4 185,22

Papua-Kep.Maluku 0 3 0 184.570 3 184.570

Total 32 54 153.510 340.179 86 493.689

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Page 39: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

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Summary of Identified Infrastructure

Projects in 6 corridors

Corridor National infratructure project Priority KPI related infrastructure project Grand Total

Airport Seaport Railway Road Energy Other* Airport Seaport

Railway Road Energy Other*

Sumatera 9 13 2 25 29 15 1 12 9 35 15 9

Jawa - - - - 67 5 3 14 16 25 12 9

Kalimantan 2 11 2 2 33 5 2 13 1 12 2 4

Sulawesi - - - 1 12 6 1 18 - 6 4 4

Bali-NT - 12 1 9 10 6 4 5 - - 6 2

Papua-Maluku

- 2 - 2 8 5 5 26 - 13 14 1

Total 11 38 5 39 159 42 16 88 26 91 53 29 597

*Other includes Water Supply, ICT.

National project = 294 projects Priority KPI related = 303 projects

Grand Total 6 Corridors = 597 projects

Page 40: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

Sumber: ISAAA 2011

3

30

60

Others

Others

Untapped

In percentage (%)Opportunity in Downstream Palm Oil Industry

The current global demand for biodiesel is 92 mn

tonnes, while total supply is only 33 mn tonnes-

untapped opportunity.

Indonesia

Indonesia offers huge investment opportunity –

palm oil industry as an example (1/4)

The current CPO national productivity in

Indonesia is only 2,98 ton/ha while the

producivity potential in Indonesia is 7 ton/ha.

The existing palm oil industry is

concentrated in Sumatera, within

following KPIsInvestment in infrastructure is required to support the

palm oil industry – investment opportunity:

Port

• Kuala Tanjung port (investment value:

IDR 1.5 Trillion)

• Dumai port expansion (investment

value: IDR 1.25 Trillion)

• Belawan port expansion (investment

value: IDR 5.5 Trillion)

Road

• Pekanbaru – Kandis – Dumai toll road

• Medan – Kualanamu – Tebing Tinggi

toll road

• Medan – Binjai toll road

• Trans Sumatera (IDR 55.3 Trillion)

Energy

• PLTU Banjarsari 2 x 100 MW

• PLTU Mulut Tambang 4x150 MW

• South Sumatera 9 – Mine Mouth Coal

Fired Steam Power Plant (2 x 600 MW)

• South Sumatera 10 – Mine Mouth Coal

Fired Steam Power Plant (1 x 600 MW)

KPI Sei Mangkei

Location: North Sumatra

KPI Muara Enim

Location: Palembang, South Sumatera

KPI Dumai

Location: Riau

KPI Rokan Hulu-Hilir Siak

Location: Riau

KPI Kampar

Location: Riau

KPI Kuantan Singingi

Location: Riau

KPI Lingga

Location: Kep. Riau

KPI Pasaman Barat

Location: Pasaman, West Sumatera

KPI Solok Selatan

Location: Solok, West Sumatera

KPI Tanjung Api-Api Tanjung

Location: Pasaman, West Sumatera

KPI Empat Lawang

Location: South Sumatera

KPI Ogan-Komeling Ilir

Location: South Sumatera

KPI Bangka Barat

Location: Bangka Belitung

KPI Lampung Timur

Location: Lampung

2.98

7

Current Productivity Productivity Potential

Current ProductivityProductivity Potential

Ton CPO/ha

Opportunity in Upstream Palm Oil Industry

GAP

= 4,02 ton/ha

Source: Kementerian Pertanian RI, Pusat Data InfoSAWIT, 2010

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Page 41: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

Huge potential of Palm Oil Industry

4.5 4.5 4.8 5.5 5.7 5.95.2 5.4 5.6 5.8 6 6.2

2.83.7

4.86.1 6.4 6.6

0

20

2006 2007 2008 2009 2010E 2011E

EU25CinaIndia

In million ton

Palm Oil Demand from Main Importer Countries is Continue to Rise

Sumber: Oil World, Reuters, 2010

Palm Oil Outlook Positive Worldwide:

China, EU and India respectively are the

main consumers of palm oil accountable for

80% of world’s demand. Rising population

and increasing income, world experiences

an increase in demand for. palm oil & its

derivats

Consumption Growth > 7% CAGR:

Consumption growth of palm oil worldwide for

the last 7 years have been increased and is

expected to rise as the price of oil continues to

increase. Such growth is also on account of a

growing population as well as the rising demand

for alternative energy sources – biodiesel.

19

10 97

0

20

India Cina Indonesia Eropa

% CAGR

in %Consumption Growth of Palm Oil, 2005-2009 CAGR

Sumber: Oil World, Reuters, 2010

The demand for palm oil will likely remain strong and research and development work is being done in

Indonesia.The availability of land in Indonesia, coupled with recent years of high seed sales, record energy

prices, and high vegetable oil prices are factors that will result in Indonesia continuing to lead the world in

palm oil production for years to come.

Page 42: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

Indonesia offers huge investment opportunity –

coal industry as an example (2/4)

The current annual coal production capacity is only 1.5% of Indonesia’s coal proven reserves

The existing coal industry is concentrated in

following KPIInvestment in infrastructure is required to

support the coal industry – investment

opportunity:1. KPI Muara Enim

Location: Pendopo, South Sumatera

2. KPI Tanjung Api-Api, Tanjung Carat

Location: South Sumatera

3. KPI Kotabaru

Location: South Kalimantan

4. KPI Kutai Timur

Location: East Kalimantan

5. KPI Tanah Laut

Location: South Kalimantan

10422

0.34

0 20 40 60 80 100 120

Potential Resources

Annual Production

(in billion tons)

Port: Maloy port, East Kalimantan (IDR 4.8 trillion)

Railway: Coal Railway South Sumatera – Lampung (IDR 802 billion) Coal Railway Puruk Cahu – Tanjung Isuy, Central Kalimantan

(IDR 20.3 trillion) Coal Railway Puruk Cahu – Bangkuang, Central Kalimantan

(IDR 15 trillion)

Energy: PLTU Mulut Tambang (4x150MW) (IDR 7.5 trillion) PLTU Banjarsari (2x100MW) (IDR 2.8 trillion) East Kalimantan Coal Fired Steam Power Plant (2x100MW)

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Page 43: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

Indonesia offers huge investment opportunity –

nickel industry as an example (3/4)

The current production capacity for

Nickel processing is 462,000 tons

from 3,900,000 tons of total Nickel

potential in Indonesia

The existing Nickel industry

is concentrated in following

KPI:

Investment in infrastructure is required to

support the nickel industry – investment

opportunity:

89%

11%

National Nickel Reserves

Recent National Nickel Production Seaport

• Bitung Port Expansion (IDR

414 Billion)

• Makassar Port Expansion (IDR

2.2 Trillion)

Road

• Manado – Minut – Bitung toll road

• Access Road to support Nickel

Industry from North Kolaka to

Pomala Port IDR 79.4 billion

• Access Road to support Nickel

Industry from North Kolaka to

Lasususa Port

KPI Palopo

Location: Luwu Timur, South Sulawesi

Main Economic Activity in KPI: Nickel

mining and processing

KPI Kolaka

Location: Kolaka, South East Sulawesi

Main Economic Activity in KPI: Nickel

Mining

KPI Konawe Utara

Location: Mandiodo, South East Sulawesi

Main Economic Activitty in KPI: Nickel

Smeltering – Pig Iron

KPI Morowali

Location: Bahodopi, Central Sulawesi

Main Economic Activity in KPI: Nickel

Mining, Preparation and Smeltering (Pig

Iron)Source: United States Geological Survey

Energy

• North Sulawesi Coal Fired

Steam Power Plant (2x55

MW)

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Page 44: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

Indonesia offers huge investment opportunity –

bauxite industry as an example (4/4)

The current production capacity for

bauxite processing is only ~2% of

total bauxite potential in Indonesia

The existing bauxite

industry is concentrated

in following KPI

Investment in infrastructure is required

to support the bauxite industry –

investment opportunity:

National Bauxite

Resources88%

National Bauxite

Reserves10%

Natinal Bauxite

Production2%

Port• Maloy port, East Kalimantan

Road• Ketapang road development

Energy

East Kalimantan Coal Fired Steam Power Plant (2x100MW)

PLTU Parit Baru (2x50 MW) West Kalimantan

Other• Pontianak Water Supply

• East Pontianak Water Supply

KPI Ketapang

Location: West Kalimantan

KPI Kabupaten Sanggau

Location: West Kalimantan

KPI Mempawah

Location: West Kalimantan

The investment opportunity in bauxite industry for both private sector investment and infrastructure

investment is huge, particularly for the investment in upstream sector.

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Page 45: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

The government had spent ~IDR 16 billion in Q4 2011 and

will spend another ~IDR 100 billion until mid 2015

Even with the current government funding commitment, there is still funding gap – thus, KP3EI needs

another USD 9.5 million from donors to support…

Government

Funding, 12.

5 million

Funding

Gap, 9.5

million

Other

Sources, 2

million

Total Funding Required by KP3EI is

USD 24 million

In total, KP3EI needs USD 24 million

from Q4 2011 to mid 2015.

To date, the government has spent

~IDR 30 billion for office

renovation, government official

salary, meetings, workshops, site visit

and field survey, etc.

For 2012 onwards, each line ministry

under KP3EI will create independent

budget allocation for KP3EI. For

example, Ministry of Public Works (Java

Corridor) has budgeted IDR 22.5 billion

(2012); IDR 11.6 billion (2013); IDR 7.5

billion (2014); and IDR 17 billion (>

2014)

The government plans to provide

~USD 12.5 million for KP3EI

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Page 46: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

Significance of KP3EI

The implementation of the first 3 years (that is 2011 – 2014) is very critical to

make sure that MP3EI will sustain in the longer period.

KP3EI is responsible implementing all of the committed programs to create

“success stories” or quick wins in order to build investors (and other

stakeholders) confidence on the government undertaking. This is essential to

create snow-ball effects for implementations at the later stages.

Along the process of monitoring the implementation (toward the end of

2014), the team (KP3EI), through its communications with related

stakeholders, will coordinate and synthesize revisions on the original concepts

of MP3EI to improve/adjust with the changing environments.

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Page 47: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

In Additions……we have

RECENT STRATEGIC INITIATIVES

47

Global Hub for Kuala Tanjung (North Sumatra) and Bitung (North Sulawesi)

Expansion and Modernization of Makassar and Kuala Namu airports

Palu-Parigi Pass

GMT +8

Page 48: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

REPUBLIC Of INDONESIA

COORDINATING MINISTRY FOR ECONOMIC AFFAIRS

Eddy SatriyaHead of International Cooperation Division,

Secretariat of KP3EI

Jalan Medan Merdeka Barat No. 7,

Jakarta Pusat - Indonesia

Phone: +62 21 34832611; Fax: +62 21 34832609

email: [email protected]

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Page 49: Presentasi Pada 1st Joint Workshop Korea-Indonesia on Industry and Regional Develpoment

Recent publications are available on:eddysatriya.wordpress.com

kolom.pacific.net.id

Eddy Satriya• 1989 :Graduated from Bandung Institute of Technology

(Telecommunication Engineering)

• 1997 :Graduated from University of Connecticut (MA in Economics)

• 1989-90: Program Management Consultancy (PMC-IV) for Telecommunication Development

• 1990-2005: Working in Bappenas (The National Development Planning Agency).

• 1995 : Secretary to Board of Commissioners of PT.Telkomsel

• 1997- present: Visiting Lecturer in University of Indonesia, University of Pelita Harapan, and ITB

• 2002-present : Actively writes various article and column in national papers and magazines.

• 2005 (Dec)-present: Working in Coordinating Ministry for Economics Affairs

• 2011 - Present: Head of International Cooperation Division, Secretariat of KP3EI

Contact:

[email protected]

[email protected]

62.21.3511466 – t

62.21.3511464 – f