Update News December 27, 2017

In The News

Airports in Surabaya, Banyuwangi to support 2018 IMF-World Bank meeting
The Jakarta Post, 27 December 2017

Two airports in East Java, namely Juanda International Airport in Surabaya and Blimbingsari Airport in Banyuwangi, will support I Gusti Ngurah Rai International Airport in Bali when the island hosts the International Monetary Fund (IMF)-World Bank annual meeting on Oct 8-14, 2018.

Flights carrying meeting participants will be directed to land at either Juanda or Blimbingsari if Mount Agung erupts next October, Coordinating Maritime Affairs Minister Luhut Pandjaitan said in Bali over the weekend.

When Mt. Agung first erupted on Nov. 29, volcanic ash blew to the east or away from Ngurah Rai, he said, but the government needed to prepare alternative landing strips should volcanic activity disrupt flights to the Bali airport.

"We still face the possibility of Ngurah Rai Airport closing during the meeting. [We anticipate] not only Mt. Agung’s eruption, but also that of Mt. Kelud in East Java. So, we prepared a contingency plan," he said.

State-owned airport management firm PT Angkasa Pura II has allocated Rp 300 billion (US$2.21 million) to enhance the capability of Blimbingsari Airport, particularly to expand its apron to 18,000 square meters from the current 3,000 sqm.

The expansion is slated for completion in July 2018, the minister said. (bbn)

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AP II Pledges to Improve Airport Train`s Facilities
TEMPO.CO, 27 December 2017

TEMPO.CO, Jakarta - State-owned airport operator PT Angkasa Pura (AP) II promised to improve services for passengers of Soekarno-Hatta Airport train. AP II president director Muhammad Awaluddin said in Tangerang today explained that the train station at Soekarno-Hatta Airport have featured two waiting rooms.

At the waiting rooms, AP II provides sofas, televisions, cellphone charging spots, and airport train ticket machines. In addition, the station features flight information services and self-check-in facilities. ATM centers and outlets are also provided at the second floor.

“The station also provides Skytrain that directly connects to Terminal 1, Terminal 2, and Terminal 3,” Awaluddin added.

Awaluddin revealed that AP II will prepare parking lots that directly connect to the airport’s station.

“We will continue to improve all facilties to ensure passengers convenience. We will make everything integrated,” he said.

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Coal miner Toba Bara to issue US$250 million notes
The Jakarta Post, 27 December 27 2017

Publicly listed coal miner PT Toba Bara Sejahtra has announced plans to issue medium-term notes (MTN) worth US$250 million in order to refinance its debts and further expand its businesses.

The notes, which will be listed in the Singapore Exchange (SGX), will mature in five years with a maximum interest rate of 10 percent per year.

Toba Bara will seek approval from its shareholders during an extraordinary shareholders meeting in Jakarta on Jan. 31, 2018.

“Proceeds from the notes will be used to restructure the company’s debts from [state lender] Bank Mandiri,” Toba Bara said in a prospectus published on the Indonesia Stock Exchange (IDX) website on Friday.

“The notes issuance will also increase the company’s ability to expand its businesses, including through investment in its own electricity projects, as well as in other mining companies and power plant projects.”

As of September, Toba Bara’s total liabilities stood at $135.5 million, up 22.5 percent annually. The liabilities included loans worth $38.17 million from Bank Mandiri.

The company mined 3.7 million tons of coal between January and September, or 61.6 to 74 percent of its full-year target of producing 5 to 6 million tons.

Toba Bara saw its revenues increase by 9.9 percent annually to $211.25 million, thanks to a recent hike in global coal prices. Meanwhile, its net profit skyrocketed to $15.85 million from only $1.73 million in the same period last year. (bbn)

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Asahi to quit Indofood joint venture on Dec 31
The Jakarta Post, 27 December 27 2017

Japanese beverage producer Asahi Group is slated to end on Dec. 31 joint ventures with PT Asahi Indofood Beverage Makmur (AIBM) and PT Indofood Asahi Sukses Beverage (IASB), which were established in collaboration with Salim Group-controlled PT Indofood CBP Sukses Makmur (ICBP).

Asahi Group owned 51 percent and 49 percent shares of AIBM and IASB, respectively, ICBP corporate secretary Gideon Ariprastomo Putro said in a press statement over the weekend.

He said ICBP and its sister company under Indofood group, PT Prima Intipangan Sejati, agreed to buy the shares of Asahi Southeast Asia Pte. Ltd.

"ICBP and Prima Intipangan Sejati have signed a share sale and purchase agreement over the shares issued by AIBM and IASB for US$20 million," he said.

The joint ventures were announced in July 2012, and one year later, the companies acquired PT Pepsi-Cola Indobeverages (PCIB), a joint venture of Salim's Gapura Usahatama and Seven-UP Nederland B.V., for $30 million.

The companies focused on soft drinks, coffee, tea and bottled water under Pepsi, Cafela, Ichi Ocha and Club brands.

ICBP must remove the names of all Asahi products from AIBM and IASB six months after the acquisition, said Gideon, adding that the beverages, however, would still use the Indofood Asahi logo in their packaging for up to one year after the acquisition.

The joint ventures were part of Asahi Group's aggressive expansion into the Southeast Asian market from 2011 to 2014. The group also bought Permanis Sdn. Bhd., a Pepsi Group bottler in Malaysia and Malaysia-based dairy producer Etika Dairies Sdn. (bbn)

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Asian Games 2018 to promote s Sumatra`s potential
ANTARA News, 27 December 2017

Palembang (ANTARA News) - South Sumatra, which successfully held South East Asian (SEA) Games in September 2011 and would be the host for next year Asian Games, has made the world want to know more about the province.

South Sumatra, which is economically strategic, is located near Java Island, where Jakarta is, and is close to Singapore and Malaysia. From the 7th to the 12th century, this province was the central of Srivijaya Empire, with its name reaching as far as Madagascar in Africa.

This province is enriched with abundant natural resources such as oil, natural gas, geothermal resources, and coal, as well as vast farming areas for various commodities such as rubber, palm, and coffee.

The vast natural resources still remain unoptimized, prompting Governor H. Alex Noerdin and staff to look for investors from various countries to invest in that province.

To attract investors, the governor increased the promotions and even put up a show to entertain the potential investors. He would offer investment chances every time he welcomed various guests from abroad to check Asian Games` preparedness.

The province, which consists of 13 towns and four cities, has plenty of potential natural resources that have not been optimized due to its limitations.

The natural resources include a huge 5.034.082 million stock tank barrel (MSTB) of oil; natural gas at Musi Banyuasin, Lahat, Musi Rawas, and Ogan Komering Ilir, which reaches 7.238 billion cubic feet (BSCF); and 1.911 megawatt electrical (MWe) geothermal energy.

As for coal resources, the province has a huge 22.24 billion tons of stocks, which consists of 40 percent from all over Indonesia.

These coals spread in several regions, such as Muaraenim, Lahat, Musirawas, and Musi Banyuasin, is still managed by national enterprise`s Bukit Asam and several private sectors.

To make use of such big potential, his part is waiting for several investors from various Asian countries and the others to manage the resources, which would enable them to support local development and improve people`s prosperity, the governor remarked.

The utilization of resources need proper funding, which prompts the province to look out for investors.

To further boost the province`s potential, South Sumatran Government has developed Tanjung Api Api Port in Banyuasin region, which has now become a specified economy zone to build railways and various factories.

Vice Governor Ishak Mekki stated that Tanjung Api Api was built as the most important logistics distribution region in western Indonesia.

The building of dock at Tanjung Api Api was done deliberately, so that it would serve as the entrance and exit gate for various commodities such as coals, agricultural products, and industry in big amount.

His part would also provide easy access to take care of the related permits to attract investors.

Through the promotion and ease of permits, the province would hopefully be well-known and could attract more investors to this province.

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Jakartans leave town, vacationers from satellite cities, Java throng the capital
The Jakarta Post, 27 December 2017

As Jakartans head out of the capital for the extended Christmas and New Year break, vacationers from its surrounding areas and as far as Central and West Java have packed the National Monument (Monas) in Central Jakarta this past week.

More than 358,000 visitors flocked to the area between Saturday and Tuesday afternoon, according to Monas’s management team.

Kafi Widayat, 34, a resident of Bekasi, said he and his family visited Monas because it was an affordable vacation destination. 

“For me Monas is very neat, clean and very well-managed, so I just want to spend my time here with my daughter and family members,” Kafi said on Tuesday.

Peppy, 41, also resident of Bekasi, came to Monas with her son and nephew from Garut, West Java. She wanted to show her nephew the Jakarta icon because it was his first trip to the capital.

“We are currently waiting for our turn to get to the top of the monument, as we want to see Jakarta from the peak of Monas,” said Peppy. 

Endrati Fariani, head of Monas’s public service department, said the number of visitors to Monas had been increasing since Saturday.

 “Our peak time was last Sunday, when we had 142,000 people visiting Monas. In total, we have welcomed 358,399 visitors since Saturday,” Endrati said on Tuesday.

Meanwhile, some 234,000 vehicles left Jakarta between Thursday and Saturday, according to State-owned toll road operator Jasa Marga. (roi)

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 Pertamina May Incur Losses from Premium Sales as Crude Price Hike

TEMPO.CO, 27 December 2017

TEMPO.CO, Jakarta - Reforminer Institute's executive director Komaidi Notonegoro asks the government to review the policy of limiting the public service obligation (PSO) prices, especially for the subsidized Premium gasoline.

Increasing crude prices globally has caused Pertamina's sales price to fall below profiting levels. If prices are not revised, Komaidi estimates Pertamina's Premium sales deficit will reach Rp1,000 per liter, thus incurring the company a total loss of Rp5.49 trillion.

"Business cannot go on like this, we have to accustom it according to corporate rules," he said.

Pertamina is still selling Premium gasoline or Rp6,450 a liter in areas outside Java, Madura, and Bali—a price that has not changed since 2016 when global crude prices were around US$45 a barrel.

As per December 22, Brent prices had hit US$65.04 per barrel.

The economical price of the low-octane gasoline is estimated at Rp7,250 per liter, and in the eastern part of Indonesia the production cost even reached Rp8,250 per liter.

Previously, Pertamina's president director Masia Manik said that the government's policy to limit Premium prices had caused the company's Q3 net profit to plunge from US$3.05 billion to US$1.09 billion.

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Foreign Tourists Flock Karimun Islands During Christmas Holidays
TEMPO.CO, 27 December 2017

TEMPO.CO, Jakarta - A substantial amount of tourists from Malaysia and Singapore often visit the Karimun islands in Riau during the Christmas and New Year`s holiday.

“Plenty of foreign tourists visit Karimun in December, the number is also expected to grow,” said the Department of Tourism and Culture Official Benny Yudhistira at Tanjung Balai Karimun yesterday on Tuesday, December 26.

According to Benny, the large number of foreign visitors to the Karimun islands is because of the long duration holiday and its strategic location for Singaporean and Malaysian tourists. “Karimun is strategic and geographically close in proximity,” said Benny.

Other than visiting tourist destinations, he explained, most foreign tourists also visit religious places, conduct their pilgrimage, and some have been known to visit their relatives.

Karimun has an emotional connection with Singapore and Malaysia, Benny explained that most residents of Karimun have family members in the two countries mentioned above. “It isn’t surprising that the majority of Karimun residents have passports, which is used to visit their family members there,” he said.

Last year, 9,765 foreign tourists visited Karimun. Benny is optimistic that the number will increase for 2017 even though the Local Officials are not holding any special event in Karimun.

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Holiday Season, Kualanamu Among Top Five Destinations
TEMPO.CO 27 December 2017

TEMPO.CO, Jakarta - During the Christmas and New Year holiday season, Kualanamu International Airport has been one of the airports serving the most passengers. State-owned airport operator PT Angkasa Pura (AP) II announced five most favorite domestic destinations during the holiday season.

“The top five domestic destinations during the holiday season are Kualanamu, Makassar, Denpasar, Surabaya, Yogyakarta,” AP II CEO Muhammad Awaluddin said in a press release on Monday, December 25.

Kualanamu International Airport, located at Deli Serdang Regency in North Sumatra, is the second largest airport in Indonesia after Soekarno-Hatta Airport. Currently, the airport serves of 8.1 million passengers per year.

With a 3.75-kilometer long runway, the airport can accommodate Boeing 777, Airbus A380, Antonov An-225, and Boeing 747-8.

Awaluddin revealed that the number of passengers at airports under AP II management has been increasing two days before Christmas. The figure increased by 7.5 percent when compared to last year.

“Two days before Christmas, AP II had served 2.1 million passengers increasing from 1.88 million passengers last year,” he said.

The number of passengers jumped by 371,047 passengers at 13 airports since December 22, 2017. The increasing number was due to extra flights proposed by several airlines.

“There are about 1,158 extra flights this year, consisting of 1,134 domestic flights and 24 international flights,” he said.

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