Cable Industry in Indonesia

ISSN 0853-2086

INDONESIAN COMMERCIAL NEWSLETTER

MONTHLY REPORT MARCH 2009

PT DATA CONSULT BUSINESS SURVEYS AND REPORT

Maya Indah Building Jl. Kramat Raya No. 5L, Jakarta Pusat

Phone: 3904711, 3901877; Fax.: 3901877 E-mail: [email protected]

Website:http://www.datacon.co.id

MARKET INTELLIGENCE REPORT ON

CABLE INDUSTRY IN INDONESIA

Indonesian Commercial Newsletter Since 1978 Published by PT Data Consult Founder : Sulaeman Krisnandhi Editor-in-Chief : D. Ganjar Sidik Senior Editors : - Hendrawan Tranggana - Agustina R. Effendy

mailto:[email protected]

List of Content

March 2009 - Indonesian Commercial Newsletter i

INDONESIAN COMMERCIAL NEWSLETTER MARCH 2009

FOCUS:

PERFORMANCE OF LISTED COMPANIES IN 2008 REFLECTS THE STRENGHT OF INDONESIA’S ECONOMIC FUNDAMENTALS ..........................................................................1 Profit of companies in the agricultural sector up sharply ..............................................................1 Good performances of listed companies contribute to economic growth.....................................4

INDUSTRY PROFILE:

DEVELOPMENT OF CABLE INDUSTRY IN INDONESIA..........................................................6 Introduction ...................................................................................................................................6 Types of cable...............................................................................................................................7 Standardization of cable .............................................................................................................11 Cable producers and production capacity ..................................................................................12 Cable producers operate at high capacity ..................................................................................14 Profile of main players ................................................................................................................15 Cable exports up.........................................................................................................................18 Imports ........................................................................................................................................25 Consumption growing .................................................................................................................25 Cable prices down 5% ................................................................................................................26 Prospects of Cable Industry........................................................................................................26 Conclusion ..................................................................................................................................28

COMPANY PROFILE :

PT. SUCACO TBK .....................................................................................................................29 Backgrounds ...............................................................................................................................29 Cable industry becomes a locomotive........................................................................................29 Marketing ....................................................................................................................................30 Standardization of Industry .........................................................................................................30 Subsidiaries ................................................................................................................................31 Financial performance ................................................................................................................32

INDUSTRY :

CABLE BASIC MATERIAL INDUSTRY ....................................................................................34 Copper cathode ..........................................................................................................................34 Copper Wire Rod ........................................................................................................................35 Copper wires...............................................................................................................................36 Aluminum ingot ...........................................................................................................................36 Aluminum rod and aluminum wire ..............................................................................................39 Conclusion ..................................................................................................................................39

INDUSTRY :

FIBER OPTIC CABLE INDUSTRY ............................................................................................41 Introduction .................................................................................................................................41 Producers of fiber optic cable .....................................................................................................41 Profile of main producers of fiber optic .......................................................................................42 Production still low ......................................................................................................................45 Exports and Imports....................................................................................................................45 Conclusion ..................................................................................................................................46

List of Content

ii Indonesian Commercial Newsletter - March 2009

ENERGY : SECOND PHASE OF ELECTRICITY CRASH PROGRAM AND DEVELOPMENT OF TRANSMISSION AND DISTRIBUTION NETWORKS...............................................................48 Backgrounds .................................................................................................................. 48 Second Phase of Power Plant Crash Program................................................................... 49 Development of transmission networks ............................................................................. 55 Transmission Development Projects................................................................................. 55 Large transmission and distribution systems still needed .................................................... 57 Fiscal Stimulus in electricity sector ................................................................................... 58

TELECOMMUNICATION :

DEVELOPMENT OF OPTIC FIBER NETWORK IN INDONESIA .............................................59 PT Telkom continues to expand net networks............................................................................60 Contractors of fiber optic projects in Indonesia ..........................................................................62 Development of Palapa Ring Project..........................................................................................62 Conclusion and prospects ..........................................................................................................64

FINANCE :

PLN TO ISSUE BOND TO FINANCE SECOND PHASE OF PROGRAM TO BUILD 10,000 MW POWER PLANTS................................................................................................................65 Backgrounds .................................................................................................................. 65 Second Crash Program to cost US$17.3 billion ................................................................. 66 PLN’s bonds valued at Rp1.5 trillion ................................................................................. 67 Financial performance..................................................................................................... 68 Financing by state banks................................................................................................. 68 PLN’s bonds bought by local investors.............................................................................. 69

CORPORATE NEWS IN BRIEF:

Semen Tonasa to start construction of new factory to cost US$318 million........................... 70 Bakrie Sumatera Reports Rp2.9 trillion in income. ............................................................. 70 Bukit Asam to invest US$20 million power generating project ............................................. 70 Kideco posts 141.47% in net profit ................................................................................... 71 Philips lighting to build energy saving lamp factory............................................................. 71 Antam-Krakatau Steel to invest $63.5 million Steel project.................................................. 71

ECONOMICS NEWS IN BRIEF:

Govt offers 8 infrastructure projects valued at Rp4.4 trillion................................................. 72 Investment in textile industry feared to fall on shrinking orders ............................................ 72 Telecom and informatics industry asked to have higher local content................................... 72 Indonesia to use more organic fertilizers for food crops ...................................................... 73 Government maintains zero % export tax on CPO ............................................................. 73

APPENDICES:

Directory of Banking companies in Indonesia.............................................................. 74

ECONOMIC INDICATOR: Economic Indicators....................................................................................................................76 Export and import........................................................................................................................77 Gross Domestic Product.............................................................................................................78 Oil Price and Foreign Exchange .................................................................................................79 The Indonesian Economic Trends ............................................................................... 80

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FOCUS

Indonesian Commercial Newsletter –March 2009 1

PERFORMANCE OF LISTED COMPANIES IN 2008 REFLECTS THE

STRENGHT OF INDONESIA’S ECONOMIC FUNDAMENTALS The fundamentals of Indonesian economy amid the global financial crisis is quite strong as indicated by the performances of publicly listed companies in 2008. Based on their 2008 financial reports already published, the income of 45 most liquid (LQ45) listed on the Indonesian Stock Exchange for 2008, grew 34%. Several mining companies like Indo Tambang Raya Megah, Tambang Batubara Bukit Asam, and Adaro Energy even recorded a growth of more than 40% in 2008 in volume and value.

Table - 1 Financial performance of coal companies (Rp billion)

Among those operating in the mining sector a decline in net profit was recorded by tin and nickel mining companies as the price of the two commodities declined in 2008 after peaking in 2007. Oil companies also recorded a decline in profit in 2008 as the price of oil plunged to the lowest level in two years. PT Aneka Tambang in 2008 recorded a net profit of only Rp1.3 trillion in 2008 down from Rp5.1 trillion in 2007 or a decline of 73%. Similarly PT Timah and PT Inco posted a sharp fall in profit. Profit of companies in the agricultural sector up sharply Eight listed companies in the farm and plantation sector including Astra Argo Lestari, Tunas Baru Lampung, Bakrie Sumatra Plantation, Sampoerna Agro, Astra Agro Lestari, PP London Sumatera BISI International and Gozco Plantation recorded a 47.8% increase in income in 2008 year-on-year.

Income % Net profit % Issuers 2008 2007 Growth 2008 2007 Adaro Energy 18,093 11,593 56.07 887 133 567.82Bumi Resources 32,095 21,522 49.13 6,131 7,496 -18.21Bayan Resources 4,877 3,439 41.79 21 253 -91.81Indika Energy Tbk 2,314 2,337 -0.96 1,085 265 309.38Indo Tambang Raya Megah 12,750 7,052 80.81 2,274 510 346.25Tambang Batubara Bukit Asam 7,216 4,124 74.99 1,708 726 135.16Total 77,345 50,067 54.48 12,106 9,382 29.03Source: BEI, Data Consult/ICN

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2 Indonesian Commercial Newsletter – March 2009

Some of the companies recorded a decline but other recorded an increase in net profit in 2008 year-on-year. Astra Agro Lestari in 2008 reported a net profit of Rp 2.63 trillion or an increase of 33% from Rp 1.97 trillion in 2007. Bakrie Sumatera Plantation reported a decline of 16% in net profit. However, altogether the 8 companies recorded a 50.3% increase in net profit in 2008

Table - 2 Financial performance of listed companies in the farm and plantation sector

(Rp billion)

Income % Net profit % Issuers 2008 2007 Growth 2008 2007

Astra Agro Lestari 8,161 5,961 36.9% 2,631 1,973 33.3% Tunas Baru Lampung 3,956 1,844 114.5% 63 97 -34.9% London Sumatra Ind 3,846 2,930 31.3% 928 564 64.5% Bakrie Sumatera Plantations 2,931 1,949 50.4% 174 207 -16.0% Sampoerna Agro 2,288 1,599 43.1% 440 215 104.3% Bisi International 1,628 890 83.0% 398 150 165.3% PP London Sumatera 3,846 2,930 313% 928 505 83.8% Gozco Plantation 291 133 1190% 55 26 112.2% Total 26,948 18,235 47.8% 5,616 3,737 50.3% Source: BEI, Data Consult/ICN

Listed companies operating in consumer goods industry recorded a strong growth of 24% in income and a 17.4% increase in net profit year-on-year in 2008.

Table - 3

Financial performance of listed companies in consumer goods industry (Rp billion)

Income % Net profit % Issuers 2008 2007 Growth 2008 2007 Unilever Indonesia 15,578 12,545 24.2% 2,407 1,965 22.5% Gudang Garam 30,252 27,389 10.5% 1,880 1,444 30.3% Indofood 38,799 27,858 39.3% 1,034 980 5.5% Kalbe Farma 7,877 7,005 12.5% 707 706 0.2% Bentoel International 5,941 4,586 29.5% 239 243 -1.6% Total 98,447 79,383 24.0% 6,268 5,337 17.4% Source: BEI, Data Consult/ICN

Generally LQ45 companies posted an increase in net profit in 208. Only 10 of them recorded a decline in profit and one, Barito Pacific, suffered a net loss. The

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Indonesian Commercial Newsletter – March 2009 3

loss was recorded by its petrochemical subsidiary Chandra Asri, which was acquired in 2007. Large issuer like Astra International in 2008 recorded a 38.3% increase in income from Rp 70 trillion in 2007 to Rp97 trillion in 2008 with profit rising from Rp 6.5 trillion to Rp 9.2 trillion or an increase of 41%. See the following table.

Table - 4 Financial performance of 40 LQ45 companies . (Rp million)

Income Profit/Loss

Issuers/sector 2008 2007 2008 2007) Profit

growth %

Multifarious Industries Astra International 97,064,000 70,183,000 9,191,000 6,519,000 41.0%Consumer Goods Industry Indofood 38,799,279 27,858,304 1,034,389 980,357 5.5%Kalbe Farma 7,877,366 7,004,909 706,822 705,694 0.2%Unilever Indonesia 15,577,811 12,544,901 2,407,231 1,964,652 22.5%Base and Chemical Industry Barito Pacific 18,322,898 336,850 3,399,758 44,533 -7734 %Charoen Pokphand Indonesia 13,212,988 8.679.504 253.977 185.448 37.0%Indocement 9,780,498 7.323.643 1.745.500 980.103 78.1%Holcim Indonesia 4,803,377 3.754.906 282.220 169.410 66.6%Semen Gresik 12,209,846 9.600.800 2.523.544 1.775.408 42.1%Infrastructure, Utility, Transport Berlian Laju Tanker 7,005,851 3,641,773 1,557,962 758,982 105.3%Indika Energy 2,314,448 2,336,961 1,084,742 264,969 309.4%Indosat 18,659,133 16,488,495 1,878,522 2,042,043 -8.0%Jasa Marga 3,353,632 2,645,042 707,797 277,981 154.6%Finance Bank Central Asia 23,179,232 19,173,564 5,776,138 4,489,252 28.7%Bank Negara Indonesia 13,460,772 11,597,147 1,222,485 897,928 36.1%Bank Rakyat Indonesia 30,631,869 25,062,332 5,958,368 4,838,001 23.2%Bank Danamon Indonesia 16,118,989 13,490,011 1,530,022 2,116,915 -27.7%Bank Mandiri 31,989,244 27,088,755 5,312,821 4,346,223 22.2%Bank CIMB Niaga 6.235.430 5.370.686 678.189 1.508.386 -55,0%Bank International Indonesia 7,216,747 6,678,533 480,468 352,821 36.2%Bank Pan Indonesia 6,002,706 4,462,234 701,361 852,252 -17.7%Trade, Services and Investment AKR Corporindo 9,472,528 5,894,750 210,032 191,208 9.8%United Tractors 27,903,196 18,165,598 2,660,742 1,493,037 78.2%

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Table 4 – cont’d

Income Profit/Loss Issuers/sector 2008 2007 2008 2007)

Profit growth

% Mining Adaro Energy 18,092,501 11,592,639 887,198 88,533 902.1%Aneka Tambang 9,591,981 12,008,202 1,368,139 5,118,987 -73.3%Bayan Resources 4,876,938 3,439,492 20,710 252,740 -91.8%Elnusa 2,543,913 2,103,690 133,772 100,140 33.6%Inco 1,312,097 2,325,858 359,316 1,173,036 -69.4%Indo Tambangraya 1,316,981 771,817 234,925 55,785 321.1%Medco Energi 1,286,327 1,077,996 280,204 6,599 4146.2%Timah 9,053,082 8,542,393 1,342,358 1,784,592 -24.8%PT Tambang Batubara Bukit Asam 7,216,228 4,123,855 1,707,771 726,211 135.1%Agriculture Astra Agro Lestari 8,161,217 5,960,954 2,631,019 1,973,428 33.3%Bisi International 1,627,821 889,588 398,401 150,192 165.3%London Sumatra Ind 3,846,153 2,929,993 927,554 564,034 64.5%Sampoerna Agro 2,288,143 1,598,930 439,516 215,082 104.3%Tunas Baru Lampung 3,955,846 1,844,206 63,336 97,227 -34.9%Bakrie Sumatera Plantations 2,931,419 1,949,018 173,568 206,575 -16.0%Property and Real Estate Ciputra Development 1,303,221 1,347,518 202,219 167,961 20.4%Lippo Karawaci 2,553,306 2,091,353 370,872 353,027 5.1%Wijaya Karya 6,559,077 4,284,581 156,034 129,138 20.8%Notes: Financial reports of some large companies in LQ45 are still not published yet Source: BEI, Data Consult/ICN

Good performances of listed companies contribute to economic growth Good performances of publicly traded companies in 2008 and in the first quarter of 2009 contributed substantially to growing confidence of investors and the business sector to the country’s economy. Amid heavy pressures with shrinking exports and difficulty in securing foreign funds are among big challenges to be faced by many countries including Indonesia and other ASEAN countries. Some neighboring countries are facing greater problems such as Malaysia and Singapore, which are more export

Focus


oriented and foreign investment. The Indonesian condition, which was previously a weakness, has become a factor contributing to the country’s economic resilience. The strength of the domestic market is shown by the fact that many listed companies, oriented to the domestic market, such as those producing consumer goods, posted substantial profit in 2008. Slump has also hit the domestic market but some indicators show improvement in the market condition. Inflation is well under control, allowing the central bank to cut its benchmark interest rate to as low as 7.5%. If banks follow the lead by taken by the central bank, and boost credits, the purchasing power of the people will increase. Despite the decline in exports, many Indonesian commodities are still high in demand in export market. Exports of palm oil and coal are picking up. The success in the recent legislative elections at least from the security point of view, also contributed to improvement of the confidence of the business sector. Indonesia fares better than many other countries facing the devastating impact of the global financial crisis. Thailand is facing political turmoil and security problem undermines political stability in the Philippines. Even Malaysia, and Singapore, which have been much more successful in economic development are in no better condition than Indonesia. With healthy economic fundamentals, the future government will have greater confidence in bringing about greater prosperity to the country in the coming years.

**dgs**

INDUSTRY PROFILE

6 Indonesian Commercial Newsletter - March 2009

DEVELOPMENT OF CABLE INDUSTRY IN INDONESIA

Introduction The country’s cable industry was badly hit by the 1998 crisis. Until 2004, utilization of the production capacity of the industry was only around 25%- 30% of installed production capacity. The industry began to revive only in the past three years starting 2006. In 2007, the country’s cable production totaled 300,000 tons or 65% of the installed capacity of 445,000 tons. Brisk developments in the power sector and growing exports have also boosted the industry lately. The fast growing demand for electricity has forced the government to launch am ambitious plan called crash program to build coal fired power plants with a total capacity of 10,000 megawatts to be completed in 2010-2011. The program is to be followed with a second phase with the same capacity. The first program is in progress pushing up demand for electric cable. Demand for cables has increased not only n the domestic market but also in export market such as Middle East. The oil rich region, which earned windfall profit with the soaring price of oil since 2006, is safe from the impact of the global financial crisis. Property and infrastructure development continue to be brisk in Middle East. The projects need large supply of electric cables including transmission and distribution cables. The revival of the cable market in 2007 and 2008 was reflected by the financial performance of listed cable producers. PT Sumi Kabel reported sales at only Rp.976 billion in 2004. In 2006 it sales shot up to Rp1,914 billion . Similarly, sales of PT Supreme Cable (SUCACO) surged to Rp2,281 billion in 2007 from Rp1,483 billion in 2006. A setback, however, came toward the end of 2008 when sales began to sink including in export market. As a result of the global financial crisis. Increase in the prices of basic materials like copper contributed to the problem faced by cable industry lately. Many cable producers suffered losses on foreign exchange as they bought the basic materials in US dollar the value of which surged facing the rupiah. Despite the gloomy outlook lately, the prospects for cable industry are still encouraging in the country with the big plan of the government in the electricity sector.

Industry Profile


Types of cable Cable industry in Indonesia has expanded and could produce various types of cable electric cable, telecommunication cable, control cable, fiber optic, etc. Electric cables consist of different types by voltage High Voltage (HV), Medium Voltage (MV), and Low voltage. Electric cables could also be divided into Bare Aluminum Conductor and Bare Copper Conductor. Generally bare cables are aerial cables having extra high, high and medium voltage . Almost all large cable producers such as PT Sucaco, Sumi Indo Kabel, Voksel elektrik, produce all types of cables both electric cable, telephone cables, and fiber optic.

Table - 1 Types of cables produced in Indonesia

Electric cable

XLPE HV

XLPE MV

XLPE LV

PVC LV

Cu Rod

Al Rod

Bare Copper Cond

Bare Alu

Cond

Telecom Cable

Fiber Optic

Sp. Cable

Enam-eled Wire

Others

PT. Kabelindo Murni Tbk. X X X X X X PT. GT Kabel Indonesia Tbk. X X X X X X X X PT. Sucaco Tbk. X X X X X X X X X X X PT. Terang Kita X X X X X X X X X PT. Sumi Indo Kabel Tbk. X X X X X X X X X PT. Jembo Cable Company Tbk. X X X X X X X X X X PT. Nikkatsu Electric Works X PT. Cahaya Angkasa Abadi X X X PT. Sinar Merbabu X X X X PT. Voksel Electric Tbk. X X X X X X X X X X PT. Ewindo X X X PT. Phenolic Prima Indonesia X X X PT. Puji Cahaya X PT. Kawat Mas Prakasa X X

Industry Profile



Electric cable

XLPE HV

XLPE MV

XLPE LV

PVC LV

Cu Rod

Al Rod

Bare Copper Cond

Bare Alu

Cond

Telecom Cable

Fiber Optic

Sp. Cable

Enam-eled Wire

Others

PT. Furin Jaya X X X

PT. Federal Mardhika Citramandiri X X PT. Karya Kabel Taliarta X PT. Star Impactama Indah X X X X PT. Indoka Jaya X X

PT. Citra Mahasurya Industries X X X X PT. Magnakabel Nusantara X X X PT. Olex Cables Indonesia X PT. Anekakabel Ciptaguna X X X PT. Autocomp Systems Indonesia X PT. Communication Cable Systems Ind. X PT. Prysmian Cables Indonesia X X X X X X X PT. Indowire Prima Industrindo X X PT. BICC Berca Cables X X X X X X X PT. Prima Cable Indo X X X X X PT. Aneka Kabel Elektrik X X PT. Cetral Wire Industrial X X PT. Furukawa Supreme Optical Cable X PT. Sutanto Arifchandra Electronic X Source: APKABEL

Industry Profile


Each cable has an identity showing the type of conductor, type of isolator, types of insulator, etc. Cable with NYY code is cable with copper conductor (using the code of N), PVC isolator, in two layers ( YY code) Cable could have several types of conductors and isolators and with toughening material or protector from steel tape. For example, high voltage underground cables are apart from a number of layers of isolator, are also given steel tape protectors to protect them from being damaged from possible impact of hard or sharp material . See the following table.

Table – 2 Cable code names and materials

Types of cable Code

Cable With Copper Conductors N Standard Twisted Cable With Copper Conductor NF Cable With Aluminum Conductors NA Concentric Copper Wire Screening C Polyvinylchloride ( PVC ) Insulation Y Galvanized Flat Steel Wire Armour F Polyethylene ( PE ) Insulation 2Y Galvanized Round Steel or Aluminum Tape Amour R Cross Linked Polyethylene Insulation Gb Steel Tape Helix ( following F or R) 2X

Copper Tape Screening S Double Tape Steel or Aluminum Tape Amour B Concentric Copper Conductor Over Each Core CE Insulated CE XLPE Sheathed Cable PE Standard Twisted Cable re Circular NFA Source : PT Sucaco

The cable products of Sucaco include low voltage, medium voltage and high voltage. Apart from electric and telephone cables, Sucaco produces enameled wires, which include Polyvinyl Formal Copper Wire, Polyester-imide Copper Wire, Polyester Copper Wire, Polyurethane Copper Wire, Polyester Nylon Copper Wire, and Polyester Amide Imide Copper.

Industry Profile


Table – 3

Types of electric and telecommunication cable produced by Sucaco

Types of cable Electric Cable Low voltage Medium voltage High Voltage

Type BCC - H NF C34-110,BCC-Hard SPLN 41-5:81,BCC Hard ASTM B8:1995 BCC Soft MfgBCC Soft SPLN, BCC Soft Man Spec BCC 1/2 Hard SPLN 41-4:84 BCC-H ASTM B8:1995

N2XK2Y/NA2XK2Y 150 KV

N2XK2Y/NA2XK2Y 150 KV

Cable specification Rated Voltage : 1,8/3 kv up to 18/30 kv

IEC 840

Cable content Bare Copper Conductor Half Hard Or Hard Used For Overhead Transmission & Distribution

SPLN 43-5/IEC 502 Single Core Power Cable, Copper Or Aluminum Conductor, XLPE Insulated, With Or Without water BlockingTape, Copper wire or Copper Tape Screened,PVC Sheathed. Used for Distribution, Indoor and outdoor Installation in Conduit Troughs or trays or in the ground where not sustain mechanical damage

Copper / Aluminum conductor, XLPE Insulated, Lead sheathed, PE Sheathed Cable

Telecommunication Cable Cable type Cable specification Cable content

R-V (Pe)V

INDOOR SCREEN CABLES SII 0710

Copper Conductor, PVC insulated, Aluminum tape screened, PVC sheathed. Used for indoor installation and telephone.

Source : Sucaco

Industry Profile


Standardization of cable The government has determined 11 national standards for cable such as SNI determined by the industry ministry including SNI 04-2697-1992 and SNI 04-3234-1992. SNI 04-2697-1992 is used for electric cables using XPLE as isolator and electric cable having voltage raging from 1 kV to 30 kV. SNI 04-3234-1992 is used for flexible cable isolated and sheathed with PVC having nominal voltage of 500 V (low voltage) that is the type of NYMHY The SNI was determined in 1988 through a decision of the industry and trade minister No. 407/M/SK/10/1980 on the application of Indonesian industrial standard (SII) and the use of SII for six types of low voltage standard electric cable and in 1988 had through a decision of the Minister No. 74/M/SK/2/1988 required the use of SII and the SII mark for 5 types of flexible electric cable : SII.2256-87; SII.2257-87; SII.2258-87; SII. 2259-87 and SII. 2260 -87. Starting 1992 , SII was changed with Indonesia National Standard (SNI) base don a decision of the Industry and Trade Minister.

Table – 4 Indonesia National Standard (SNI) for electric cables

No Standard Title Remarks 1 SNI 04-2697-1992 XPLE for isolation of electric cable

with voltage of 1 kV to 30 kV Min. decision 407/M/SK/10/1980

2 SNI 04-2698-1999 PVC isolated wire , voltage of 450/750 Volt (NYA)

3 SNI 04-2699-1999 Isolated cable and sheathed with PVC with voltage of 300/500 volt (NYM)

4 SNI 04-2700-1999

Isolated ground cable and sheathed with PVC protected with steel wire or aluminum 0.6/1 kV (NYFGbY/NAYFGbY/NYRGbY/NYRY/NA YRY)

5 SNI 04-2701-1999 Isolated ground cable and sheathed with PVC with voltage of 0.6/1 kV (NYY/NAYY)

6 SNI 04-6122-1999

Isolated ground cable and sheathed with PVC protected with steel or aluminum wires with voltage of 0,6/1 kV (NYBY/NAYBY)

7 SNI 04-3234-1992 Flexible cable isolated and sheathed with PVC with voltage of 500 V (NYMHY)

Min. decision 74/M/SK/2/1988

8 SNI 04-3235-1992 Flexible cable isolated and sheathed with PVC with nominal voltage of 500 V (NYMHY Oval)

Industry Profile


Table 4 – cont’d No Standard Title Remarks 9 SNI 04-3236-1992 Flexible wire isolated with PVC with

nominal voltage of 1000 V (NYAF)

10 SNI 04-3237-1992 Flexible cable twins and triplets isolated with PVC for working voltage of up to 380 V (NYY/NYD)

11 SNI 04-3238-1992

Flexible cable twins to triplets to quintuplets isolated , sheathed with PVC with nominal voltage of 380 V (NYIFY)

Cable producers and production capacity After the 1998 crisis , there was almost no addition in the number of cable factories and installed capacity. The member of the association of cable producers (APKABEL), which groups almost all cable factories in the country did not change much . In 1997 , there were 35 members of the association and 2006, the number slightly declined to 34 companies. Base don official data at the industry ministry , among 48 registered cable factories in 2005 , only 33 were in operation. Number of cable factories grouped in Apkabel • 1974 = 5 companies • 1997 = 35 companies • 2000 = 35 companies • 2002 = 36 companies • 2005 = 33 companies • 2006 = 34 companies The production capacity of the country’s cable industry has not changed much since 2004. Base din data at APKABEL the production capacity is around 445,000 tons year for all types of cable .

Table - 5 Indonesia’s cable production capacity, 2006

Types of cable Production capacity (ton/ year)

• Telecommunication Cable 132,900 • Power Cable 258,650 • Special Cable 43,150 • Enameled Wire 8,800 TOTAL 445,090 Source: Apkabel

Industry Profile


Most cable factories date back to year before the 1998 crisis. Low demand caused factories to operate much below their production capacity. Increase began only in 2005 to peak in 2007 . New investment began in cable industry that year including for capacity expansion. A Malaysian company, PT Wonderful Wire and Cable , built a factory in Medan . Another foreign company PT Prysman invested for capacity expansion. Currently there are 15 major cable makers in Indonesia . Most of them are old companies like PT Tranka Kabel that came on line in 1952. PT Sumi Indo Kabel Tbk (Perusahaan) was established on 23 July 1981, with the name of PT Industri Kawat Indonesia. The name of the company was changed with PT IKI Indah Kabel Indonesia in 1982. PT Voksel Electric Tbk was established in 1971 . Later its status was changed into a foreign investment (PMA) company after establishing cooperation with Showa Electric Wire & Cable Co. Ltd from Japan. There are six publicly listed cable makers -- PT Supreme Cable Manufacturing and Commerce TBK (SUCACO), PT Sumi Indo Kabel, PT Kabelindo, PT Voksel Electric, PT KMI Wires and Cables and PT Jembo Cable.

Table - 6 Indonesia’s main cable makers

Companies Status Production

capacity (ton/year)

Investment

PT. WALSIN LIPPO INDUSTRIES PMA* 38,500 US$ 134,211,391 PT. TERANG KITA PMDN* 38,000 Rp. 22,794,000,000 PT. SUMI INDO KABEL Tbk. PMA 36,000 Rp. 321,000,000,000 PT. KMI WIRES AND CABLES (Formerly PT GT KABEL INDONESIA) TBK

PMDN 29,750 Rp. 162,193,790,000

PT. SUPREME CABLE MANUFACTURING CORPORATION TBK

PMDN 25,200 Rp. 205,583,400,000

PT. KABELINDO MURNI TBK PMDN 23,500 Rp. 20,000,000,000

PT. PULUNG COPPER WORKS PMDN 21,840 Rp. 2,100,860,000 PT. VOKSEL ELECTRIC TBK PMA 18,150 Rp. 250,000,000,000 PT. SHIKING INDONESIA PMA 18,000 US$ 11,750,000 PT. ANEKA KABEL CIPTAGUNA PMDN 17,280 Rp. 12,588,000,000

Industry Profile



Companies Status Production

capacity (ton/year)

Investment

PT PRYSMIAN CABLE INDONESIA (Formerly PT. PIRELLI CABEL INDUSTRI )

PMA 15,200 US$ 67,300,000

PT. JEMBO CABLE COMPANY TBK PMDN 15,195 Rp. 34,627,000,000

PT. BICC BERCA CABLES PMA 10,000 US$ 35,198,000

PT. JAYAKO MURNI ABADI Non Facility 8,400 Rp. 5,330,000,000

PT. CITRA MAHA SURYA INDUSTRY PMDN 7,800 Rp. 25,000,000,000 *)PMA = Foreign Investment Company PMDN = Domestic Investment Company Source: Data Consult, Apkabel, BKPM. Industry Ministry

Cable producers operate at high capacity The country’s cable industry was hit hard by the monetary crisis in 1997/1998 on falling demand . Capacity utilization was only 25%-30% . The condition improved only in 2004 and 2005 , when the country’s economy began to recover from the crisis. The growth of the industry peaked in 2007 when the government launched its 10,000 megawatt crash program in the electricity sector pushing up demand for electric cables. Demand also rose in export market notable in Middle East where the construction sector was brisk amid the soaring oil prices. Strong demand in 2007 resulted in an increase in capacity utilization of the country’s cable industry to 65%-70%. The capacity utilization was expected to scale up further in 2008 to around 90% of the total installed capacity of 445,090 ton, if the crash program in the electric sector ran as expected.

Table - 7 Indonesia’s cable production, 2004 - 2008

Year Production (ton)

Growth (%)

2004 111.3 2005 133.5 20 2006 178.0 33 2007 289.3 63 2008 *) 378.3 31 Average growth (%) 37 Note : *) provisional figure Source: Data Consult/ICN

Industry Profile


A faster growth was recorded in the production of electric cable to follow the brisk development in the electric sector . Meanwhile, almost all telephone operators including state telecommunication company PT Telkom Tbk use fiber optic cable in their new projects. All producers of metallic cable could produce fiber optic cable. The government has a big telecommunication project, Palapa Ring, using fiber optic cable. Toward the end of 2008, demand for cables began to decline as a result of the global economic slowdown and crisis. Many large property projects including development of new cities in Middle East have been shelved. Profile of main players PT Supreme Cable Manufacturing & Commerce (PT Sucaco) This company was established in 1970 with the name of PT Supreme Cable Manufacturing Corporation. In 1996, Sucaco became a public company selling part of its share at the Jakarta Stock Exchange . In 1997 , it was renamed PT Supreme Cable manufacturing & Commerce (Sucaco). Sucaco is the pioneer in modern cable industry in Indonesia. PT Supreme Cable Manufacturing & Commerce Tbk reported sales valued at Rp2.3 trillion in 2007 or an increase of 53.85% from Rp1.5 trillion in the previous year. The sales in 2007 included exports valued at Rp537.6 billion or an increase of 413.45% from Rp104.7 billion in 2006 . Most of the exports were to Middle East. The company, however, reported only a slight increase of 4.97% in profit to Rp54.2 billion in 2007 reflecting a sharp competition in the market. In 2008, PT Supreme Cable Manufacturing & Commerce Tbk posted only Rp11.23 billion in profit , down 79.3% form the previous year. Its sales fell 6.8% to Rp2,127.03 billion from Rp2,281.70 billion . Sumi Indo Kabel PT Sumi Indo Kabel Tbk was established on 23 July 1981, with the name of PT Industri Kawat Indonesia. The company was renamed PT IKI Indah Kabel Indonesia in 1982.

Industry Profile


In 2006, PT Sumi Indo Kabel Tbk. recorded the largest sales among publicly listed cable makers. However, in 2007, its sales fell when other companies recorded an increase. Its sales in 2007 fell 16.93% to Rp1,590 billion from Rp1,914 billion after it stopped in 2006 selling copper wires and copper rod produced by its subsidiary PT Karya Sumiden Indonesia. The company did not sell the two types of cable as the profit margin was too low. The copper cable produced by PT Karya Sumiden is then used to feed only cable factory of PT Sumi Indo Kabel. As a result, PT Sumi Indo Kabel reported an increase in operating profit despite a decline in income as it sales and operating costs declined also decline . A significant decline was also recorded in non operating cost from Rp19.076 billion to Rp4.573 billion resulting in a sharp increase of 74.58% in net profit to Rp77.467 billion . PT Voksel Electric Tbk The company is a producer and distributor of electric cables. PT Voksel Electric Tbk showed in its financial report for 2007, a 48% increase in sales to Rp 1,358.64 billion from Rp 919.53 billion in 2006 with net profit surging 51 % to Rp 53.7 billion from Rp35.59 billion. In 2008, PT Voksel Electric Tbk recorded an estimated 46.3% increase in sales to Rp1.856 trillion . In the first half of that year it posted Rp 1,019.76 billion in sales. Company sources said PT Voksel Electric had a 30% share of supply of electric cables for the 10,000 MW crash program. In 2008, PT Voksel held a number of contracts to supply electric cable to a number of power generating projects. Voksel supplies high voltage cable for the projects. The company has expanded its production capacity from 800 ton per month to 1,300 tons of for aluminum cables, from 130 tons to 180 tons of medium voltage cable and from 100,000 tons to 120,000 tons of fiber optic. PT Jembo Cable Company Tbk Consolidated sales recorded by PT Jembo Cable Company Tbk. rose 64.2% or Rp287.6 billion from Rp448 billion in 2006 to Rp735,6 billion in 2007. The sales exceeded its target of Rp 496 billion. The net profit of the company rose Rp22.3 billion from Rp600 million to Rp 22.9 billion in the same period.

Industry Profile


Increase was recorded in the sales of low voltage electric cable with copper conductor which rose from Rp150 billion in 2006 to Rp407 billion in 2007. The sales of medium voltage electric cable rose from Rp91 billion to Rp 121 billion . The sales of metallic telephone cable rose from Rp39 billion to Rp51 billion. Decrease was recorded in the sales of low voltage electric cable with aluminum conductor falling from Rp140 billion in 2006 to Rp124 billion in 2007 and sales of fiber optic cable from Rp 20 billion to Rp 11 billion. Kabelindo Murni In 2007, PT Kabelindo Murni Tbk recorded a high increase in sales – up 175% to Rp 499.50 billion from Rp285.40 billion in the previous year. The surge was recorded especially in the demand for electric cables and telephone cables. Sales of electric cable on the domestic market reached Rp460.695 billion in 2007 and sales of telephone cable Rp36.72 billion. Its profit rose 20% to Rp12.60 billion in 2007. Its sales in 2008 were estimated to rise still but not as sharp as in 2007. In the first half of 2008, its sales were valued at Rp 263 billion . KMI Wire and Cable PT GT Kabel Indonesia Tbk, now known with a new name of PT KMI Wire and Cable Tbk (KBLI), was estimated to chalk up an increase in income to Rp1.4 trillion in 2008 as it already secured a potential contract of Rp 961 billion on the domestic and export market. Based on its financial report in 2008, PT KMI Wire and Cable Tbk recorded Rp 26.644 billion in net profit in 2008 or up from 2007. The increase in profit was attributable to a sharp increase in net sales to Rp 1.731 trillion from Rp451.483 billion in 2007. In 2008, the company reported a loss of Rp 17.311 billion on foreign exchange, up from Rp8.912 billion in 2007 The company said it hopes to secure order valued at Rp255 billion for exports and Rp706 billion from local buyers . The potential contracts included from PT PLN (persero) valued at Rp463 billion, from buyers abroad valued at Rp255 billion, distributors Rp181 billion, and from spot market valued at Rp62 billion. KBLI also secured contract to supply cable valued at Rp560.3 billion with delivery on June 30, 2008 including Rp275.1 billion with local buyers and Rp282.2 billion with buyers abroad. The company sells cables mainly to Africa, Middle East and Australia.

Industry Profile


In 2009, PT KMI hopes to post Rp48 billion in net profit with income totaling Rp1.5 trillion from the sales of copper electric cable valued at Rp949 billion and aluminum electric cables valued at Rp472 billion.

Table - 8

Financial performance of main cable makers, 2006 -2008

Name of company

Total Income (Rp million)

Net Profit

2006 2007 2008* 2006 2007 2008* KMI Wire and Cable Tbk, PT 1,130,748 1,280,446 796,860 50,382 25,635 30,968 Supreme Cable Tbk, PT 1,483,069 2,281,701 1,157807 51,643 54,209 14,399 Jembo Cable Company Tbk, PT 448,021 735,589 484,008 593 22,922 12,752 Kabelindo Murni Tbk, PT 285,472 499,480 263,153 7,270 12,585 2,739 Voksel Electric Tbk, PT 919,537 1,358,648 1,019,761 35,597 53,701 39,544 Sumi Indokabel Tbk, PT 1,914,345 1,590,455 835,237 55,374 77,467 30,346 6,183,198 7,748,326 4,556,826 202,865 248,526 130,748 Source : Indonesia Stock Exchange Note :*) per June 2008

Cable exports up The slump on the domestic market in the wake of the monetary crisis of 1997/1998, forced cable makers in the country to seek to boost exports to offset a decline in sales on the domestic market. Exports, therefore, began to rise in 2000 and the trend continued until 2007. In 2004, exports totaled 66,600 tons valued at US$ 287 million, up to 111,600 tons valued at US$ 917 million in 2007 or an increase of 20% a year. Previously exports were made mainly to Japan, the Philippines, Bangladesh and Sri Lanka, but in the last two years, the Middle East has become the main export destinations. The construction industry marked with rising property buildings is brisk following the oil boom in the oil rich region. New cities have been built or being build requiring larger supply of cables mainly electric cable and telephone cables. Currently cable makers are more oriented to export market. PT Sumi Indo Kabel, for example, exports most of its cable production. In the first half of 2008, the company exported 83% of its production leaving only 13% for domestic market. PT KMI Wires and Cables Tbk PT KMI has recorded an increase in its exports although most of its production is still disposed of on the domestic market. In 2007, sales on the domestic market made up 84% of its total sales with exports making up only 16%. In the first half of 2008, its exports rose in contribution to 25%. Its export markets have expanded to South America, Africa and Europe.

Industry Profile


PT KMI said demand for cables have increased in Middle East in the past two years especially before the financial crisis in 2008. Large property projects and construction of new cities pushed up demand for cables especially electric cables. In 2007 and 2008, around 70%-75% of exports by PT KMI were to Middle East. Other export regions accounted for the remaining 25%-30% of its exports. Growing exports have boosted production by the company prompting it expand production capacity. It plans to expand its capacity by 25% by phases until 2010. PT SUCACO PT Supreme Cable Manufacturing & Commerce Tbk recorded sales valued at Rp 2.3 trillion. That year its exports were valued at Rp537.6 billion or an increase of 413.45% from Rp104.7 billion in 2006. Middle East is its largest buyer. Other cable makers such as PT Voksel Electric Tbk also increased exports. Voksel exported cables valued at US$3 million to Middle East in 2007.

Table – 9

Indonesia’s exports of cables 2004 – 2007 Year Volume Value

(Tons) Growth (%) 000 US$ Growth

(%) 2004 66,625 287,701 2005 77,339 16.08 505,872 75.80 2006 87,178 12.72 735,813 45.45 2007 111,619 28.03 917,774 24.72

Source : BPS Indonesia exports various types of cable. The largest in volume is electric cable with voltage of more than 1000V (HS. 8544.60.000) totaling 33,000 tons in 2007 and telecommunications cable (HS 8544.49.39000 totaling 25,200 tons. The largest exports in value were wiring harnesses for motor vehicles (HS 8544.30.1000) valued at US$ 338 million in 2007.

Table - 10

Exports of cables by types, 2004 – 2007 Tons/000’US$

HS Description 2004 2005 2006 2007

8544.11.0010 Winding wire of copper, laquered/enamelled 355

2,731

8544.11.0020 Winding wire of copper, cover with paper textile material/pvc 14,719

70,262

Industry Profile


Table 10 – cont’d HS Description 2004 2005 2006 2007

8544.11.0030

Winding wire of copper, laquer/enamelled & cover with paper, textile material/pvc 165

1,404

8544.11.0040

Winding wire of copper, rect cross-sect. and without connectors 10

617 8544.11.0090 Other winding wire of copper 70 966

8544.11.110 Rectangular winding wire of copper 233 1,269

1,288 7,610

8544.11.190 Winding wire of copper in other forms 96 -

1,187 -

8544.11.200 Winding wire of copper covered with Textile 57 4,675 5,040

179 14,372 23,118

8544.11.300 Winding wire of copper insulated with PVC 830 290 27

1,235 868 207

8544.11.4000

Winding wire of copper of oth, rectang. Cross-section & without connector 1 1

8 3 8544.11.9000 Winding wire of copper of oth 7,384 7,898 17,583 19,210

8544.11.910 Rectangular winding wire of other, cover with paper 600

1,598 8544.11.990 Other winding wire 9,030 20,654

8544.19.1000 Winding Wire not of copper of laquered/enameled 69 107

389 492

8544.19.2000 Inding wire not of copper of manganese resistance wire 1 1

2 2 8544.19.300 Manganese resistance wire 1 1

8544.19.900 Winding wire of other than copper of other type 63 25 961 241

573 166 6,137 1,792

8544.20.100 Co-axial cable fitted with connectors 10,376 5,901 12,105 5,220

116,701 85,131 157,107 92,566

8544.20.2000 Insult cables cot fitted with conec., fo ra voltage <=66.000 volts 182 446 91

939 1,973 626

Industry Profile



HS Description 2004 2005 2006 2007

8544.20.210 Co-axial cable not fitted with Connectors insulated with PVC 246

1,245

8544.20.290 Other co-axial cable not fitted with Connectors 23

123

8544.20.3000 Insul.cables not fitted with connec., fo ra voltage>66.000 volt 1 21 1

2 208 2

8544.20.4000

Insulated cables not fitted with connectors, for a voltage >66.000 volt 26

88

8544.30.1000 Wiring harnesses for motor vehicles 10,534 14,799 20,831

134,831 200,303 338,0948544.30.9000 Wiring harnesses for aircraft/ship 4,522 2,406 2,356 52,803 38,644 32,096

8544.41.000 Elect. Conductor for a voltage < 80 V fitted with connector 861

3,869

8544.41.1100 Telephone cables, submarine fitted with conectors 7 182

516 1,637

8544.41.1200 Telephone cables, oth than submarine fitted with conectors 142 1,207

658 5,133

8544.41.1500

Oth plastic insulated electric cable having cross sect<=30mm fitt w co 1

16

8544.41.1900

Oth elec.conduc o than 8544.41.11-15 fitted with connectors 666 58

1,556 620

8544.41.9100 Plastic insul. Electric cable having cross section<=30mm fitt w co 3 14

148 495

8544.41.9300 Plastic insulated electric conductors fitted connectors 2

54

8544.41.9400 Controlling cables fitted with connectors 1

18

8544.41.9900 oth electris conductor oth than 8544.41.91-95 fitted connectors 233 158

10,247 2,962

8544.42.1100

Telephone, telegraph, radio relay cable submarine, for communication, <=8V 55

2,224

Industry Profile



8544.42.1900 Other fitted with connectors for telecommunication, voltage <=8V 401

1,620

8544.42.2000

Fitted with connectors for telecommunication voltage >8V&<=1V 12

28

8544.42.9000 Oth fitted with conector, for voltage <=1 volts 1,908

14,794

8544.49.1100 Elect. Conductor for a voltage < 80 V insulated with PVC 2,209 585 868 235

17,506 9,180 19,385 8,224

8544.49.1200 Telep.teleg & radio relay cables, oth than submarine not fitt with 89 74

264 314

8544.49.1900 Other cable for electrical conductor for a voltage < 80 V 433 482 147 823

4,861 10,178 5,395 12,715

8544.49.2100

Shielded wire for mnfact. Of auto-wiring harnesses, not for communication, <=8V 1,967

16,543

8544.49.2900

Oth fitted with connectors, <=80V, not for used for telecommunications 213

4,442

8544.49.3100

Telephone, telegraph, radio relay cable submarine, for communication, >8V & <=1V 2

14

8544.49.3900

Oth fitted with connectors for telecommunication, voltage > 8V and < 1V 25,277

158,756

8544.49.4000

Other fitted with connectors, > 80V & <= 1V of a kind not used for telecom 115

4,030

8544.49.910 Other elect. Conductor for voltage < 80 V insulated with PVC 1 66 81

37 408 614

8544.49.9500 Shielded wire of kind used in the mfd of auto wiring harns not fit w 1

2

8544.49.990 Other electric conductor < 80 V insulated with other materials 172 2,966 2,299

1,043 20,728 22,786

8544.51.000 Elect. Conductor of 80 V < Volt < 1000 V with fitted connectors 11,330

34,082

Industry Profile



8544.51.1100

Teleph.teleg & radio relay cables, submarine fitted with connec for 80v<volt< 1,390 497

4,501 2,419

8544.51.1200

Teleph, telegrap & radio relay cables, oth than submarine fit w conn for 80 V < V 174

466

8544.51.1900

oth elec conduc oth than 8544.51.11-12 fitt with connec for 80 V < V 484 8

2,232 62

8544.51.9100

Plastic insult. Elec. Cable having a cross sec<=300mm fitt w conn for 80V<V=1000V 3,865 3,477

12,587 14,696

8544.51.9200

Plastic insul. Elec. Cable having a cross sec > 300 mm fitt w conn for 80 V < V < 5 16

13 63

8544.51.9400

Controlling cables fitted with connectors for 80V<Voltage<=1,000V 1

1

8544.51.9900

Oth elec conduc o than 8544.51.91-94 fitted with connec for 80V<Volt<= 482 850

3,718 22,860

8544.59.110 Elect. Conductor of 80 V < Volt < 1000 V insulated with PVC 220 156 5,700

429 449 25,646

8544.59.1200

Telp. Teleg. & rad relay cab, o. thn submarine not fitted with conn for 80 V<V< 125 995

385 6,625

8544.59.190 Other cable for electric conductor of 80 V < Volt < 1000 V 19,973 23,539 18,237

54,298 87,282 111,787

8544.59.910 Other electric conductor of 80 V < Volt < 1000 V insulated with PVC 119

277

8544.59.9200

Plastic insulated elec. Cable having cross sec > 300 mm & 80V<Voltage<=1000 14

55

8544.59.9400

Controlling cables not fitted with connectors for 80V<Voltage<=1000V 1

4

8544.59.990 Other elect. Conductor 80V < Volt < 1000V 1,090 1,286 806

3,510 3,995 3,800

Industry Profile



8544.60.000 Other electric conductors, for a voltage exceeding 1000 V 7,593 33,056

17,017 130,103

8544.60.1100

Plastic insulated elec. Cable having cross sec<= 400 mm for 1 KV<Volt<=36 K 5,134 6,829

18,689 34,708

8544.60.1900

Plastic insulated elec. Cable having cross sec<400 mm for 1 KV<Volt<=36 K 8 1

25 13

8544.60.2100

Plastic insulated elec. Cable having cross sec <= 4mm for 36 KV<volt<=66KV 94

114

8544.60.2900

Plastic insulated elec. Cable having cross sec>400 mm for Voltage>66 K 1 773

3 3,752

8544.60.3000 Other electric conductors, for a voltage >66 KV 135

700

8544.60.3900

Plastic insulated elec. Cable having cross sec>400 mm for Voltage>66 K 1

1

8544.60.9200

Teleph, Telegraph, Radio relay cables, oth than submarine for voltage>1KV 347

1,810

8544.60.9900 Oth electric conductors oth than 8544.60.91-92 for voltage >1 Kv 53 1

106 1 8544.70.000 Optical Fibre Cables 1,269 5,988

8544.70.1000

Optical Fibre Cables Teleph, telegraph & Radio relay Cables, oth than submarine 114 59 22

473 859 207

8544.70.2000

Optical Fibre Cables Teleph, telegraph & Radio relay Cables submarine 265 281

1,658 2,463 8544.70.9000 Oth Optical Fibre Cables 149 142 2471 631 1,090 18,350 TOTAL 66,625 77,339 87,178 111,619 287,701 505,872 735,813 917,774 Source : BPS

Industry Profile


Imports While exporting, the country also imports cables. Imports have increased in the past four years in line with the growing demand in the country. Imported cables are mainly fiber optics and industrial cables In 2004, imports of cable reached 20,772 tons valued at US$ 83,428,000 up to 50,003 tons valued at US$ 222,186,000.

Tabel - 11 Imports of cable, 2004 – 2007

Year Volume (Tons)

Value (000 US$)

2004 20,772 83,428 2005*) 27,580 132,600 2006 35,830 179,575 2007 50,003 222,186

Note: *) Revised Source: BPS, Data Consult/ICN

Consumption growing A fast growth has been recorded in the country’s consumption of cables in the past four years peaking in 2007. In 2004, consumption totaled 65,400 tons, up to 227,700 tons in 2007 or a three fold increase from the previous year. The increase in consumption in 2007 came with the launching of the government’s crash program in the electricity sector. Under the first crash program state electricity company PLN is to build coal-fired power plants with a total capacity of 10,000 megawatts. Outside the program a number of power plants have been built in Java and other regions to cope with shortage in power supply. In 2008, consumption continued to scale up as indicated by growing production and sales until the first half of that year. In the second half of that year demand began to fall both on the domestic and international markets as a result of the global financial crisis that caused the shelving of many construction projects. In addition, rising prices of copper resulted in higher prices of cables. The condition, however, is expected to improve in the coming years especially in the country as the government continues the crash program in the electricity sector.

Industry Profile


Table - 12 Domestic consumption of cables, 2004 - 2007

Production Imports Exports Market Size

111,3 20,7 66,6 65,4 133,5 27,6 77,3 83,8 178,0 35,8 87,1 126,7 289,3 50,0 111,6 227,7

Source: Data Consult/ICN Cable prices down 5% A decline in the prices of basic materials like copper and aluminum in international market, brought about a decline in the price of cables by the end of 2008. The price of copper in March 2008 hit the level of US$8,680 per ton, but by the end of that year the price sank to US$ 6,000 per ton. The price of aluminum also dropped from US$ 3,200 per ton to US$ 2,100 per ton. As a result the prices of cable were estimated to fall by 5%-6%. A cable producer said if it already cut its selling price of its cables by 5% since last September as the price of cables in the country depends much on the prices of copper and aluminum. Prospects of Cable Industry The domestic demand for power is forecast to grow more than 9% annually in the next 10 years. Meanwhile, the government hopes to be able to meet 95% of household power requirement in 2018, up from 60.8% in 2007. Currently PLN’s supplying capacity still falls short of the requirement, marked by the frequent crisis in power supply in various areas. The government has launched a crash program to be carried out by PLN in the electricity sector to cope with growing shortage in power supply in Java and other regions. Under the crash program PLN is building coal-fired power plants with a total capacity of 10,000 megawatts to be completed in 2010 - 2011. The projects to be built include 10 units of power generating plants with a total capacity of 6,900 MW in Java and 25 power generating plants with a capacity of 3,100 MW outside Java to start in mid 2006. The program is now in progress starting 2006. Currently completion is about 60%. The project will need large supply of electric cables both for transmission

Industry Profile


network and distribution systems. The tender for the procurement of transmission cables for the entire power plants is valued at around Rp6.1 trillion. Procurement of cables for transmission network include Rp1.2 trillion in Java, Rp1.3 trillion for the southern Sumatra system, Rp2.4 trillion for the West Nusa Tenggara (NTB) system, and Rp1.2 trillion for North Sumatra system. There are still tenders for the procurement of cable networks for main electrical relay stations. The crash program is to be followed with a second phase which will include construction of coal-fired power plants to make up 26% of the total additional capacity, hydropower and geothermal power plants to account for 60% and gas fired power plants for 14%. Investment needed for the second phase is around US$ 17.3 billion including US$ 15 billion for power plants and the rest for transmission and distribution systems. Demand for electric cables, therefore, will remain strong in the coming several years though slowdown is expected in 2009 as a result of the global financial crisis. In 2010, the electric cables demand is predicted to grow again not only in the country but also in export market such as in Middle East.

Table - 13

Projected consumption of cables, 2008-2009

Year Projected consumption (‘000 tons)

2008*) 295 2009 310 2010 356 2011 427 2012 513

Note: *) forecast With production capacity at around 450,000 tons per year at present, more investment will be needed to build new factories or expand the capacity in the next five years.

Industry Profile


Conclusion • In the past five years, the country’s electric cables industry has expanded fast

and recovered form the 1998 monetary crisis. In 2008, cable production was estimated to reach 85% of the country’s production capacity or 378,000 tons.

• The increase in production has been boosted by growing demand especially from PLN’s project of 10,000 MW coal-fired power generating plants. Consumption of electric cables in 2007 rose to 227,000 tons in 2007 and to 295,000 tons in 2008.

• Indonesia has also succeeded in expanding market abroad. In the past five years exports surged from 66,000 tons in 2004 to 111,000 tons in 2007. The largest market has been Middle East, but the main buyer of automotive cables is Japan to which exports have also increased from year to year.

• Until mid 2008, demand for cables on the domestic and international markets continued to increase, but toward the end of that year there was a slowdown. Many large property projects abroad including in Middle East were shelved on funding problem. Demand for electric cables, therefore, declined.

• However, the market is expected to be normal again in 2010. Construction of property projects in the country and in Middle East is expected to brisk again.

• Based on the trend in the past four years and taking into account the impact of the global financial crisis, demand fro a cable in 2009 is forecast to rise only slightly from 295,000 tons in 2008 to 310,000 tons. Stronger demand is expected in 2010 and by 2012, domestic consumption of cables is forecast to reach 513,000 tons. Additional capacity of the country’s cable industry will be needed to meet the requirement that year.

**dgs**

COMPANY PROFILE


PT. SUCACO TBK

Backgrounds This company was established in 1970 with the name of PT Supreme Cable Manufacturing Corporation. In 1996, Sucaco became a public company selling part of its shares on the Jakarta Stock Exchange . In 1997, it started the use of the current name of PT Supreme Cable Manufacturing Commerce (Sucaco). Currently the shareholders of Sucaco include PT. Moda Sukma (formerly PT. Modasakti Raharjo) with a share of 29.67%, PT. Tutulan Sukma (25.78%), The Furukawa Electric Co. Ltd of Japan (11.81%) and the public (32.74%). Sucaco is known as a pioneer in modern cable industry in Indonesia. It was established with technical assistance from its principal Furukawa Electric Co., Ltd. of Tokyo, Japan, and International Executive Corp. of New York, USA. The process of transfer of technology took place in less than five years . In one year it no longer needed Japanese experts employed in its factory. After succeeding in producing low voltage electric cable, Sucaco produced telephone cables and then dynamo cables. Sucaco established cooperation with Nihon Decolux -- and produced melamine. Later together with Sumitomo it produced medium and high voltage cables with new technology not yet known in Indonesia. Selling new types of cables proved not easy. Marketing cables with the XLPE isolation, for example, is not enough by using a piece of laboratory certificate from Sumitomo of Japan or from PLN. Only after winning a tender in Singapore valued at US$200,000 , Sucaco could convince buyers in Indonesian market . Sucaco has a number of subsidiaries operating in industries producing cable basic materials. Sucaco also has subsidiaries selling its products on the domestic market and international markets. The subsidiaries include PT Tembaga Mulia Semanan, PT Supreme Alurodin, PT Setia Pratama Lestari Pelletizing, PT Supreme Decoluxe, PT Supreme Elektro Kontak, and PT Furukawa Supreme Optical Cable. Cable industry becomes a locomotive Sucaco is known as the largest producer of cables in Indonesia producing various types of electric and telecommunication cables. It has an annual capacity to produce 2.4 million sckm of telecommunication cables. and 1,800 tons of enameled wires.

Company Profile


The products of Sucaco include various types of low voltage, medium voltage and high voltage cables. Apart from electrical and telephone cables it also produces enameled wires, which consist of Polyvinyl Formal Copper Wire, Polyester-imide Copper Wire, Polyester Copper Wire, Polyurethane Copper Wire, Polyester Nylon Copper Wire, Polyester Amide Imide Copper.

Table – 1 Types of cable and production capacity of PT SUCACO

Types of cable Prod. capacity (ton/year)

Enameled Wire 1,800 Copper telephone cable 6,383 Electric Cable (AL) 4,800 Electric Cable (CU) 1,800 Power Cable (CU) 9,600 SLPE Cable (AL) 7,200 Fiber Optic Cable 16,250

Marketing Sucaco has received ISO 9002 in 1994 and ISO 9001 in 1997. The certificates concerns quality and designs of products and services. Sucaco has established cooperation with state electricity company PLN, and state telecommunication company PT Telkom to supply cables for the projects of the state companies. Sucaco now has a 30% share of the cable market in Indonesia. In 2007, Sucaco sold 1,606.9 meters of cables. Sucaco already exported cables to Middle East including Saudi Arabia, and Dubai, Iran and other Asian countries, Australia, and Africa. In 2007 its cable sales were valued at US$42.8 million to Cubai Cable Company Ltd, US$ 23.3 million to Dubai Electricity & Water Authority and US$ 5.3 million to Saudi cable Company. Standardization of Industry The cable products of Sucaco have been accepted both at domestic and foreign markets. Its products meet the Indonesian Industrial standard (SII) and international standards of SLI, SPLN, Stel-K, IEC, VDE, DIN, JIS, ICEA/NEMA and BS. The project of 10,000 megawatt power plants launched by PLN provides a large market of cable producers in the country including Sucaco. Since 2007, cable

Company Profile


sales of five large producers including Sucaco grew 35% annually on the average. The growth rate for medium producers grew by 10% - 15%. Sucaco acquired a cable factory of PT Aries Kabel Indonesia (Aries Kabel) in 2007 at a price of Rp 9 billion. Assets acquired by the company included land and buildings , machines , vehicles and the brand of ARIES. The acquisition increased the types of cables produced by Sucaco mainly the small types such as building wire, housing cables and automotive cables. In 2008, Sucaco sold its stake in subsidiary PT Furukawa Supreme Optical Cable at a price of US$550,000 as the asset was not profitable. The asset was sold to The Furukawa Electric Co Ltd and OFS Fitel LLC. Furukawa Electric is a 11.81% shareholder of Sucaco. Late 2008, the Central Jakarta District Court decided in favor of Sucaco against Sudono over ownership of the brand of Supreme . Sucaco has used the brand before Sudono Riady Ko used it in Japanese characters. Sucaco registered the brand in 1971 a the directorate general of the intellectual property rights of the ministry of justice. The brand of ‘Supreme’ was registered by Sucaco under the No. 181172 for electric cable, telephone cable and dynamo cable. The brand was include din the category of 09 and 17. Sudono made the registration of the brand only in 2006 that it was charged with using the brand of other company in this case Sucaco and hurting the interest of consumers. Subsidiaries PT SUCACO has a number of subsidiaries including PT Setia Pratama Lestari Palletizing Industries (99%), PT Supreme Sukses Makmur (98%), and PT Supreme Decoluxe (70%). In addition, SUCACO has shares in a number of other companies as investment including PT Tembaga Mulia Semanan (33.81%), PT Supreme Elektro Kontak (10%) and PT Furukawa Supreme Optical Cable (10%) PT. Setia Pratama Liang Sheng was established in May 2004 by the subsidiaries of Sucaco PT Supreme Sukses Makmur with a 35% share, and PT Setia Pratama Lestari Pelletizing Industries controlling 35% share with the remaining 30% held by PT Liang Sheng Indonesia. In April 2005 PT Setia Pratama Lestari Pelletizing Industries acquired the entire stake of PT Supreme Sukses Makmur in PT Setia Pratama Liang Sheng increasing its stake to 70% in that subsidiary. In June 2006, PT Setia Pratama Lestari Pelletizing Industries (PT SPLPI) and Dick Suwarno Raharjo acquired the shares of PT Setia Pratama Liang Sheng owned by PT Liang Sheng Indonesia respectively 29% and 1%, that

Company Profile


PT Setia Pratama Liang Sheng is now 99% owned by PT SPLPI. PT Setia Pratama Liang Sheng was then renamed PT Setia Pratama Lestari Sukma. PT. Setia Pratama Lestari Pelletizing Industries was established by Sucaco in 1985, with Sucaco owning 99.9% of the shares. This company started operation in 1986 with a factory in Tangerang. This company produced Pellet Cross Linked Polyethylene, Polypropylene and Poly-Vinyl Chloride (PVC) for insulation, filler and cable sheath. . In 1998 the company produced XLPE for cable insulation . In 2007, it started producing PE Black Jacketing based LLDPE and HDPE for telephone cable. This company has an annual production capacity of 1,200 tons. This company supplies the basic material for Sucaco and other cable factories.. This company has received the compounded Quality Management System and secured the ISO 9001 in 1997, ISO 9001:2000 in 2002. PT Supreme Sukses Makmur (formerly PT Supreme Alurodin), based in Jakarta, started commercial activity in 1986 . In the beginning it operated in the industry producing Aluminum Rod Electric Conductor (EC) Grade, Aluminum Rod Alloy and Tal. However, in July 2002, it changed its business line and became a trading company and investment agent and consultant. Sucaco owns 98% of the company. PT Supreme Decoluxe, based in Jakarta and operates in the industry producing Melamine, Resin, and Melamine Sheet. This company started commercial operation in 1997 . It is 70% owned by Sucaco . Financial performance In 2007, Sucaco reported sales valued at Rp2.3 trillion or an increase of 53.85% from the previous year. The sales in 2007 were the largest ever recorded by Sucaco in value. Exports accounted for Rp537.6 billion of the sales in 2007. Exports have been made mainly to Middle East. Despite the high increase in sales its net profit rose only 4.97% to Rp54.2 billion. The competition was tighter that the company cut its profit margin. The soaring prices of crude oil in 2008 resulted in an increase in the prices of basic materials like copper, polyethylene and other basic materials. Demand for cables form domestic project and from Middle East remain strong , but the soaring prices of basic materials mainly copper rod caused a problem. The price of copper road surged to US$8,400 per metric tons in 2008 from US$7,100 in 2007.

Company Profile


Meanwhile, the net profit of Sucaco in 2008 shrank 79.3% to only Rp11.23 billion. The decline in the performance was marked with falling sales by 6.8% to Rp2.12 billion from Rp2.28 billion. In 2009, Sucaco set sales target at Rp2.5 trillion . Increase is expected mainly in exports . It is still waiting for cable procurement plan valued at Rp1 trillion of PT Perusahaan Listrik Negara (PLN) . Sucaco said if PLN still delays the plan it will seek to boost exports. Demand for cables in Middle East is still strong. The market still is booming in that region. This year Sucaco sets no capital expenditure as it does not need yet capacity expansion. Its electric cable production this year is expected to contribute 80% to its consolidated sales. Meanwhile demand for telecommunications cables and magnet cables is expected t decline this year . This year , Sucaco has secured a credit of Rp340 billion from PT Bank Mandiri Tbk to refinance debts.

Table – 2 Summary of financial report of Sucaco

(Rp million)

Description Dec. 2008 Dec. 2007 Assets

Current assets 891,199 1,066,872 Non current assets 235,583 226,805 Total assets 1,126,782 1,293,677 Liabilities Current liabilities 751,464 934,423 Non current liabilities 15,440 3,824 Other liabilities 3,872 8,300 Total liabilities 770,776 942,723 Equity 356,006 350,954 Total liabilities and equity

1,126,782 1,293,677

Profit & loss Revenue 2,127,032 2,281,702 Net profit 11,219 54,209 Source : Sucaco

**R**

INDUSTRY


CABLE BASIC MATERIAL INDUSTRY

Cables mainly made of copper or aluminum, are used to transmit electric current. Copper industries as the upstream sector of cable industry, include copper ore industry, concentrate copper industry, copper cathode industry, copper rod industry and copper wire industry. An aluminum industry which is also an upstream sector of the cable industry includes bauxite industry, alumna industry, aluminum ingot industry, aluminum rod industry and aluminum wire industry. There are many integrated cable industries in the country producing the basic materials and finished products.

Table - 1 Production capacity of upstream cable industry

and intermediate cable industry 2008

Industry Production capacity (tons/year)

Number of players

Copper cathode 270,000 1 Copper wire rod 107,640 6 Copper wire 413,700 23 Aluminum ingot 264,300 11 Aluminum wire rod 89,200 6 Aluminum wire 5,000 1 Source: Data Consult

Copper cathode Copper cathode is a basic copper product used as a basic material of various copper products such as cable, foil, cu tube, and cu pipe. Its basic material is copper anode. Indonesia has only one producer of copper cathode that is PT. Smelting Co. which has a production capacity of 270,000 tons a year. PT. Smelting which was established in February 1996 is a foreign investment (PMA) company with an investment of US$ 891 million. PT. Smelting produces copper cathode, Anode Slimes, Copper Slag, Copper Telluride, and by products of Gypsum, and Sulfuric Acid.

Industry


The facility owned by PT. Smelting Co include smelting machine to produce copper anode, refinery to produce copper cathode and acid plant to turn out sulfuric acid and Gypsum. The process of producing copper anode with three furnaces uses the technology of Mitsubishi. Anode with a copper grade of 99.4% is processed into copper cathode, which will have a copper grade of 99.99% through electrolysis. The process of Sulfuric Acid is made with the technology of double contact/ absorption from Mitsubishi. The basic material in the form of copper concentrate is supplied by PT. Freeport Indonesia, a US company having large copper mines in Grasberg, Papua and PT. Newmont Nusa Tenggara, which has a copper mine in Batu Hijau, West Nusatenggara. PT. Smelting will export part of its production to a number of countries in Asia. Smelting is 60.5% owned by Mitsubishi Materials Corp, 25% by Freeport Indonesia, 9.5% by Mitsubishi Corp and 5% by Nippon Mining and Metals Co, Ltd. Copper Wire Rod Copper wire rod is used as feedstock for copper wires. Copper wire rod generally has a diameter of 8 mm in rolls. The country has six producers of copper wire rod. Sluggish growth has been recorded in the development of copper wire rod industry in the country. PT. Tembaga Mulia Semanan, Tbk (TMS) has the largest production capacity of 48,000 tons per year. In addition to copper wire rod, the company produces copper wire bars and a number of other copper based products. The company is 33% owned by PT. Supreme Cable Manufacturing, 35% by The Furukawa Electric, Co. Ltd and 10% by Toyota Tsu Sho . PT. Supreme Cable Manufacturing, Tbk itself is 11.81% owned by Furukawa Electric, Co. Ltd. Furukawa Electric, Co. Ltd operates in industry supporting telecommunication industry producing fiber optic cables, optical connectors and fusion splicers. Furukawa has business units in electronic sector producing electronic components and cable materials, in automotive sector producing automotive cables and electric cables, and conductor materials, in copper and aluminum material industry producing, in construction material industry producing thermal pipes , insulation and fire resistant materials.

Industry


The second largest producer is PT. IKI Indah Cable Indonesia/ PT. Sumi Indo Kabel, Tbk. which was established in 1981 with the name of PT. Industri Kawat Indonesia. The company started using the name of PT. IKI Indah Kabel in 1982. In 1994, their statuses become a foreign investment (PMA) company with the involvement of Sumitomo Electric of Japan as a new shareholder of 41%. PT. IKI Indah Cable has subsidiary PT. Karya Sumiden Indonesia producing copper wires. PT. Karya Sumiden Indonesia was established in 1998. In 1999, the name of IKI Indah Cable was changed again with PT. Sumi Indo Cable Indonesia after it went public. Sumitomo Electric Industries now controls 88% of the company and Sumitomo owns 5%. The main business of PT. Sumi Indo Cable is production and sales of cables. Its sales of cables were valued at Rp1.54 trillion in 2007 and sales of copper wire rod were worth Rp1.94 billion. Four of the six producers of copper wire rod also produce cables. They are PT. Sumi Indo Cable (SIK), PT. GT Cable Metal Indonesia (GT KMI), PT. Phenolic Prima Indonesia, and PT. Pulung Copper Works. SIK produces electric cables , enameled cables, communication cables and fiber optics cables. PT. GT Cable Metal Indonesia produces electric cables from copper and aluminum and telecommunications cables. PT. Phenolic Prima Indonesia produces electric cables and flexible cable. PT. Pulung Copper Works produces aerial cables, electric cables , and low voltage network cables. The basic material in the form of copper cathode used by copper wire rod producers is partly supplied by PT. Smelting.

Table- 2

Producers of copper wire rod and capacity, 2008

Producers Production capacity(tons/year) Location

PT. Tembaga Mulia Semanan, Tbk 48,000 Jakarta PT. IKI Indah Kabel Indonesia / PT. Sumi Indo Kabel, Tbk

33,000 Tangerang

PT. GT Kabel Metal Indonesia 15,000 Jakarta PT. Phenolic Prima Indonesia 5,600 Jakarta

Industry



Producers Production capacity (tons/year) Location

PT. Pulung Copper Works 5,040 Bogor PT. Multi Tembaga Utama 1,000 Tangerang Total 107,640 Source : Data Consult

Copper wires The country has two producers of copper wires PT. Karya Sumiden Indonesia (KSI) with a capacity of 410,400 tons a year and PT. Tong Cheng Sandimas (TCS) with a capacity of 3,300 tons per year. The copper wires produced by KSI is partly used to feed the cable factory of its parent company PT. Sumi Indo Kabel.

Table - 3 Producers of copper wires and capacity, 2008


PT. Karya Sumiden Indonesia 410,400 Tangerang PT. Tong Cheng Sandimas 3,300 Tangerang Total 413,700 Source: Data Consult

Aluminum ingot The country’s aluminum ingot industry has not expanded in the past several decades. The largest producer of that material is PT. Indonesia Asahan Aluminum (Inalum) in Asahan, North Sumatra having a production capacity of 240,000 tons a year. The company is 41% owned by the Indonesian government and 59% by a consortium of 12 Japanese companies. It has recorded almost no profit since its came on line in 1983. In 1982-2005, Inalum posted US$ 692 million in operating profit but it suffered foreign exchange loss of US$ 1,645 million as a result of the yen appreciation against the US dollar that the company accumulated a total net loss of US $ 953 million during that period.

Industry


Shortage in the supply of aluminum ingot in the country is covered with imports as based on an agreement with the Japanese investors, 60% of Inalum’s production of that material is exported to Japan. The contract with the Japanese consortium will expire in 2013. The consortium wants to extend the contract, but the government has decided to keep it for itself. Imports of aluminum ingot, therefore, is almost the same in volume than annual exports by Inalum of around 96,000 tons. Inalum’s dependence on imports for alumina basic material make the company less competitive. Other producers have much smaller capacity. The second largest producer is PT. Liang Ying Nuansa Indonesia with a capacity of only 10,000 tons a year. Most of 7 of the ten producers are located in Mojokerto, East Java. The other two are in Surabaya and Cilegon. Indonesia, which has the largest reserve of bauxite, has no processing plant of that basic material and alumina making it difficult to expand the aluminum industry in the country.

Table - 4 Producers of aluminum ingot and capacity , 2008


PT. Indonesia Asahan Aluminum 225,000 Asahan PT. Liang Ying Nuansa Indonesia 10,000 Mojokerto PT. Krakatau Prima Dharma Sentana 4,000 Cilegon PT. Pinjaya Logam 4,000 Mojokerto PT. Rezeki Intilogam Jaya 4,000 Tangerang PT. Ingatomas International 3,000 Surabaya PT. Master Mas Phosphat Indonesia 1,000 Mojokerto PT. Naga Agung Mas Indometal 1,000 Mojokerto PT. Internusa Brown’s Indonesia 550 Mojokerto PT. Peroni Karya Sentra 500 Mojokerto PT. Mata Mas Metal Indonesia 400 Mojokerto PT. Furin Metal Indonesia 200 Mojokerto Total 253,650 Source: Data Consult

Industry


Aluminum rod and aluminum wire Producers of cable basic materials from aluminum are more integrated the more they are in the downstream Three of six producers of aluminum wires also produce cables. They are PT. GT Cable Metal Indonesia, PT. Terang Kita, and PT. Jembo Cable Company, Tbk. Indonesia has only one company PT. Tembaga Mulia Semanan, Tbk. producing aluminum wires. This company operates only in the manufacturing of metal materials from aluminum and copper. Producers of wires from aluminum or copper not having integrated with production facility for finished products such as cable are small in capacity, but those having integrated facility to also produce cables has large production capacity such as PT. Karya Sumiden Indonesia, a subsidiary of cable maker PT. Sumi Indo Kabel. The aluminum wire production capacity of PT. Semanan Tembaga Mulia, Tbk is relatively small at 5,000 tons per year. See the following table.

Table - 5

Producers of aluminum wire rod and capacity, Indonesia 2008


PT. Tembaga Mulia Semanan, Tbk 22,600 Jakarta PT. Alumina Metal Utama 20,000 Tangerang PT. GT Cable Metal Indonesia 15,000 Jakarta PT. Terang Kita 12,000 Depok PT. Jembo Cable Company, Tbk 11,000 Tangerang PT. Jayako Murni Alumindo Abadi 8,600 Jakarta Total 89,200 Source: Data Consult

Conclusion Indonesia has few companies operating in cable basic material industry in the upstream sector producing copper cathode, and aluminum ingot compared with

Industry


those producing wire rod, the cable basic material in the downstream This is because of the fact that the country has not succeeded in developing industries processing copper ore, bauxite and alumina . So far the country has no copper ore processing industry. The country has only processing plant for copper concentrate to produce copper cathode. Copper cathode industry is developed as part of the agreement to renew the working contract of PT Freeport Indonesia. Meanwhile, aluminum ingot industry also has not expanded as expected. The country has only Inalum that produce aluminum ingot . Inalum was established an in cooperation between the government and a consortium of Japanese companies. The cooperation favors Japan the company is required to exports most or 60% of its production to Japan. Expansion is recorded better in the intermediate sector of industries producing cable basic materials including copper and aluminum wire rod. In the midstream sector, around half of the producers also produce telecommunications and electric cables. The number of producers of copper and aluminum wires (more in the downstream sector) is relatively small than the number of wire rod producers. Most producers are integrated with either downstream or upstream industries such as PT. Tembaga Mulia Semanan, Tbk and PT. Karya Sumiden Indonesia.

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INDUSTRY


FIBER OPTIC CABLE INDUSTRY

Introduction Fiber optic cable could conduct light effectively in a long distance that it is just suitable to serve as a communication medium. There are two types of fiber optic cable loose tube and tight buffer. Loose tube is a fiber optic cable that has several tubes containing fiber optic normally 4, 6, or 12—around the core of fiber glass or metal that functions as toughening agent. The room between the tube and the core is filled with fiber in the form of jelly. This structure is then wrapped with special thread, water resistant tape, aluminum tape, inner packaging from polyethylene, steel tape, and outer packaging from polyethylene. Tight buffer is fiber optic cable made by encircling several pieces of fiber optic round the core and than it is covered with solid material such as polyaramid and then it is wrapped with plastic mainly PVC which is resistant to heat. Cable of this type generally is used in a close place or a room. Development of fiber optic cable industry in Indonesia is not very encouraging despite the fast growth of its consuming industries like telecommunication industry. The reason is large imports of fiber optic cables as a consequence of the use of foreign network vendors , which often bound by contract with foreign producers of fiber optic cable as the suppliers. Producers of fiber optic cable Fiber optic cable industry in Indonesia grows to follow the expansion of telecommunications industry as cables are used for communications networks. Indonesia‘s production capacity of fiber optic cables in 2008 was 27,580 tons per year .There are 8 producers including PT. Supreme Cable Manufacturing Corporation Tbk (Sucaco); PT. Sumi Indah Kabel Indonesia (Sumi Indah); PT. Kabel Metal Indonesia (KMI); PT. Jembo Cable Company Tbk (Jembo), PT. Prysmian Cables Indonesia (Prysmian), PT. BICC Berca Cables (Berca); PT. Communication Cable System Indonesia (CCSI); and PT. Voksel Electric Tbk (Voksel).

Industry


Table - 1 Indonesia’s producers of fiber optic cables and capacity, 2008

Name of companies Status of companies

Production capacity (km/y)

PT. Supreme Cable Manufacturing Corporation Tbk (SUCACO) PMDN 16,250

PT. Sumi Indo Kabel Indonesia NON FAS 3,000 PT. Kabel Metal Indonesia PMA 2,000 PT. Jembo Cable Company Tbk 2,000 PT. Prysmian Cables Indonesia PMA 1,600 PT. Voksel Electric Tbk 1200 PT. BICC Berca Cables PMA 950 PT. Communication Cable System Indonesia PMA 580 Total 27,580 Source: Data Consult

Profile of main producers of fiber optic PT Sucaco PT. Sucaco was established in 1970 and started operation two years later with technical assistance from Furukawa Electric Co. Ltd. of Japan and International Executive Corp. of the United States. The company, however, started producing fiber optic cables in 1998. Later that year PT. Sucaco started exporting fiber optic cable to Nepal and Sri Lanka. PT. Sucaco has a production capacity of 16,250 tons a year or the largest in Indonesia. Sucaco supplies fiber optic cables for PT. Telkom, and exports the material to a number of countries including Asia, Australia, Iran, Africa and Middle East. PT. Sucaco is 29.67% owned by PT.Moda Sukma (formerly Modasakti Rahardjo), 25.78% by PT. Tutulan Sukma, and 11.81% by The Furukawa Electric Co. Ltd, 5.32% by PT.Kustodian Sentral Efek Indonesia. PT. Tutulan Sukma is also a 6.25% shareholder of another cable maker PT. Kabelindo Murni. In 2007, Sucaco recorded a net income of Rp38 billion down form Rp52 billion the year before. Sucaco suffered a loss of Rap34 billion in 2004.

Industry


Voksel Voksel ‘s production capacity for fiber optic cables rose to 1,200 tons per year up from 500 tons after buying new production machines in 2007. In addition to fiber optic cables, Voksel also produces electrical cables, communication cables, and electric bare cables both from copper and aluminum. Most of its production is disposed of on the domestic market in 2007, sales on the domestic market made up 67.83% of its total sales. The rest was exported. Its largest consumer in the country is PT. Telkom for its communication cable. Around 70% of cables for the networks of PT. Telkom are supplied by Voksel. The largest consumer of its electrical cables is state-owned electricity company PLN. Voksel also supplies fiber optic cables to open market through a number of distributors. Its export markets include Brunei, the Philippines, Singapore, Malaysia, Thailand, Cambodia, Vietnam, Sri Lanka, Myanmar, Hong Kong, India, Bangladesh, Japan, Nepal, Korea, UAE, Yemen, Fiji Island, Australia, Egypt, Cyprus, Brazil, Pakistan, etc. PT. Voksel was established in 1971. In 1989, its status became a foreign investment (PMA) company as a joint venture with Howa Electric Wire & Cable Co. Ltd from Japan Voksel is now 21.97% owned by Perfect Prospect Limited, 10.2% by SWCC Showa Cable System Co.Ltd and the rest by investing public.

Table - 2 Sales of fiber optic cables by PT. Voksel 2003 – 2007

Year Sales value (Rp billion)

Growth (%)

2003* 13.5 2004** 14.5 7.4 2005** 44.2 204.8 2006** 20.7 -53.2 2007*** 78.9 281.2

* Not consolidation ** Consolidation with PT. Prima Mitra Elektrindo since 6 July 2004 *** Consolidation with PT. Prima Mitra Elektrindo and PT. Bangun Prima Semesta Source: PT. Voksel

Industry


In 2007, the net income of Voksel reached Rp44.7 billion or the highest since 2003. In 2003 and 2004, Voksel suffered losses at Rp15 billion and Rp37 billion respectively. It started posting net profit in 2005 - at Rp27 billion in 2005 and Rp 36 billion in 2006. Jembo Cable Jembo Cable was established in 1973 and started producing fiber optic cables in 1993 after establishing technical cooperation with Fujikura, Ltd. Fujikura is a producers of wires and cables including fiber optic cables in addition to fusion splicer. Jembo Cable is a producer of electrical cables, telecommunication cables, control cables, and special cables. Its fiber optic cable production capacity is 2,000 tons per year. Jembo Cable became a public company in 1992 and in 1997 its shares were split into two each. Jembo Cable is 52.57% owned by PT. Monas Permata Persada, 17.58% by PT. Indolife Pensiontana, 13.51% by Fujikura Ltd and 6.49% by Fujikura Asia Limited. In the first nine months of 2007, Jembo Cable reported a net income of Rp16.9 billion or the highest since 2003. In 2005, the company even suffered a loss of Rp2 billion. CCSI CCSI is a producer of fiber optic cables under the license of Corning Cable Systems Inc. (USA). Its has an annual production capacity of 580 tons. CCSI produces all types of loose tube including OPGW, ADSS, Aerial, Direct Buried and Submarine. CCSI is also a distributor of hardware and accessories for carrier and private network such as Fusion Splicer X60, X77, OTDR, Talk Set, OTB (Optical Termination Box), Pigtail, Patch Cord, HDC, which are produced by Corning Cable Systems. CCSI is owned by Corning Incorporated, which acquired it from the division of communication cable and hardware of Siemens AG in 2000. Corning Incorporated is a producer of special materials from ceramic and glass. Apart from optic cable, and network equipment, Corning Incorporated also

Industry


produces material display of TFT/ LCD, laboratory equipment and culture cells, medicine development equipment, etc. Sumi Kabel Sumi Kabel has an annual production capacity of 3,000 tons of fiber optic cables or the second largest in the country. The core business of PT. Sumi Indo Kabel is manufacturing of electric and telecommunications cables, but it also produces cable basic material in the form of copper wires. It is 88% owned by Sumitomo Electric Industries and 5% by Sumitomo. Its net income in 2007 totaled Rp54 billion, up from Rp44 billion in the previous year. In 2003 it suffered a loss of Rp 10 billion. Production still low The country fiber optic cable industry operates much below its installed capacity. In 2008, production was only 12,500 km or 50% of its installed capacity. The low capacity utilization was caused by large imports by telecommunication operators that depend much on vendors. Telecommunications operators generally develop networks of fiber optic in cooperation with large network vendors such as NEC, Fujitsu, Alcatel Lucent, etc. which has been bound in contract with producers of fiber optic cables abroad.

Table - 3 Indonesia’s production of fiber optic cables, 2005 - 2008

Year Production (tons )

Growth (%)

2005 5,000 2006 7,300 46.0 2007 9,700 32.9 2008 12,500 28.9 Rata-rata 36 Source: Data Consult

Exports and Imports Exports of fiber optic cables by Indonesia are relatively small compared to production capacity. In 2005, exports totaled only 414 tons valued at US $2.29

Industry


million. The exports rose in the following year to 482 tons valued at US$ 4.41 million. A sharp increase of 417% in exports was recorded in 2007 to 2,493 tons valued at US$18.56 million. In 2008, exports rose further to 3,100 tons valued at US$ 12.1 million.

Table - 4 Indonesia’s exports of fiber optic cables, 2005 – 2008

Year Exports (tons )

Growth (%)

Value (US$ million )

2005 414 - 2.29 2006 482 16.4 4.41 2007 2,493 417.2 18.56 2008* 3,100 24.3 23.1

Note: *) Estimate Source: BPS, Data Consult

Meanwhile, imports in 2007 totaled 1,404 km valued at US$ 9.8 million. The trend of import volume follows development of telecommunication projects in the country. In 2009 to 2010, imports are predicted to grow further as there are a number of telecommunications projects being built or planned. PT. Telkom is building a 3,139 km network called ‘JaKa2LaDeMa’ to be completed in 2010. In addition, there is the “Jakabare” project of Indosat 1,300 km in length to be completed this year. Excelcomindo also has project to build 550 km cable network this year. There is also the 4.450 km Palapa Ring project to be carried out by the government. A new player in this business PT. Powertel plans to build a 3,400 km network Conclusion Indonesia’s fiber optic cable industry has grown with the support of foreign principals as global players based in Japan, the United States, and Europe. Most of the local producers of fiber optic cables are owned by the foreign principals.

Industry


Fiber optic cable industry has good prospects as the country’s telecommunications industry is still growing and the telecommunication networks of fiber optic cables are still relatively small not up to 50,000 km as against 70,000 km in India. Telecommunications industry in the country is growing fast that large supply of fiber optic cables will be need in the coming years. The local producers of fiber optic cables, however, could take full advantage of the growing demand on the domestic market as network vendors are generally bound in contract with foreign suppliers. Local producers had only a share of less than 3% of the market of telecommunications and informatics components, which was valued at US$4.1 billion in 2008. The country’s production of fiber optic cables, therefore, remains small. The production in 2008 was less than 50% of the country’s installed capacity. The role of the government, therefore, is needed to protect the domestic industry. This year the industry ministry will propose a draft law on local content in a bid to boost the domestic telecommunications and informatics industry.

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ENERGY


SECOND PHASE OF ELECTRICITY CRASH PROGRAM AND

DEVELOPMENT OF TRANSMISSION AND DISTRIBUTION NETWORKS Backgrounds In a bid to prevent shortage in power supply in the country, the government has launched a crash program to build power plants with a total capacity of 10,000 MW. The first phase of the program has been in progress and it is to be followed with the second phase, the second phase is prepared in a Power Provision Plan for 2009-2018 by PLN. The first phase of the program was launched in 2006 to build coal-fired power plants with a total capacity of 10,000 MW, The projects has been more than 50% completed, it is to be completed in 2011. The second phase will follow in 2012 as additional capacity will still be needed, to meet fast growing requirement. In the period of 2009 – 2018, based on PLN’s estimate, power requirement in the Java-Bali system will rise from 107.8 TWh in 2009 to 250.9 TWh in 2018 or an annual increase of 9.5%. Meanwhile, the requirement outside Java-Bali in the same period is estimated to grow from 30.9 TWh in 2009 to 74.3 TWh in 2018 or an annual growth of 10.3%. The government is set to carry out the program as based on experience in 1998; demand for power supply has continued to increase despite the crisis. The second phase of the program also with a total capacity of around 10,000 MW is estimated to cost US$ 21.3 billion. The private sector is expected to provide 64% of the investment. Most of the plants with a total capacity of 6,000 MW are to be built in Java other regions will have a share of 4,000 MW of the total capacity. In the first phase there are only coal-fired power plants, but in the second phase priority will be given to development of power plants using renewable energy sources such as geothermal and water energy. The power plants are to include PLTU accounting for 26%, PLTGU for 14% and PLTP 42%. However, as renewable energy sources are not yet ready for development, coal fired power plants will still dominate power plants to be built in the second phase. The project will include development of transmission and distribution network. Large supply of electrical cables will be needed.

Energy


Second Phase of Power Plant Crash Program Until now details of the second phase of the program are still studied by the government and PLN. Whereas, PLN plans to hold tender for the development of power generating plants to be built in the second phase of the program by the end of first half of 2009. The power plants to be built in the second phase of the program will include various types by fuels. Although priority is to be given for renewable energy coal fired power plants (coal PLTU) will still be dominant. Based on the plan forwarded by PLN, the total capacity of power plants to be built in the second phase of the program will reach 11,144 MW including 7,366 MW to be built by PLN and the rest by IPP (Independent Power Producer).

Table - 1 Second phase of electricity crash program by owners

Owners Types of power plants

Capacity (MW) Composition

PLN Coal PLTU 5,306 PLTP 665 PLTGU 1,065 PLTA 300Sub total 7,336 65.8%IPP Coal PLTU 2,338 PLTP 1,470Sub total 3,808 34.2%Total Indonesia Total 11,144 100%Source : PLN, Data Consult/ICN

The power plants to be built in the second phase of the program will be located in 99 areas and 90% of which are in regions outside Java-Bali. Coal PLTU will account for 68% of the capacity or 7,644 MW, PLTP for 19% or 2,135 MW, PLTGU for 10% or 1,065 MW, and PLTA for 3% 300 MW.

Table – 2 Power plants to be built in second phase of program

Description Type of power plants

Capacity (MW)

Composition (%)

Java-Bali system Coal PLTU 5,000 PLTP 1,145 PLTGU 825 Sub total 6,970 100%

Energy



Description Type of power plants

Capacity (MW)

Composition (%)

Outside Java-Bali Coal PLTU 2,644 PLTA 300 PLTP 990 PLTGU 240 Sub total 4,174 100% Total Indonesia Coal PLTU 7,664 PLTA 300 PLTP 2,135 PLTGU 1,065 Total 11,144 100% Source: PLN

Java will have a share of 18 power plants with a combined capacity of 6,970 MW of the power plants with a total capacity of 11,144 MW of power plants to be built in the second phase of the crash program. The regions outside Java Bali will have a much larger number of 65 power plants but will smaller total capacity of 4,174 ME. The 18 power plants include the PLTGU of Muara Tawar with a capacity of 825 MW and three PLTU Cilacap Baru 2,000 MW, Indramayu Baru 1,000 MW, and JavaTengah Infrastruktur 2,000 MW, and 14 units of PLTP. The 65 units of power plants to be built in the outer regions include five units of PLTU in West Kalimantan with a total capacity of 164 MW, four units power plant in South Kalimantan and Central Kalimantan with a total capacity of 348 MW and six units of PLTU in East Kalimantan with a total capacity of 456 MW. In Maluku, there are five units of power plant with a total capacity of 64 MW including one unit of 20-MW PLTP in Tulehu and four units of 12-MW PLTU in Ambon, a 10-MW unit in Masohi , a 12-MW unit in Ternate and a 10-MW unit in Tual. There are four units power plant with a total capacity of 100 MW in NTB, consisting of two units PLTU of 50 MW in Lombok and 10 MW in Sumbawa and 2 units of power plant with a total capacity of 40 MW in NTT. In Sulawesi, there are seven power plants in South Sulawesi and Southeast Sulawesi 520 MW, nine power plants with a capacity of 189 MW in North Sulawesi , Central Sulawesi and Gorontalo.

Energy


In Southern Sumatra, there are 8 units of power plant with a total capacity of 1,115 MW and northern Sumatra seven units of power plant. The selection of coal PLTUs for the Java-Bali system with a capacity of 1,000 MW each is based on efficiency and to suit the system. The PLTGU project in Java- Bali with a capacity of 825 MW is Muara Tawar Add-On 2, 3, 4. This project is very strategic to meet requirement in 2011-2012, but very much dependent on the availability of gas supply. PLTP projects are to be built mainly by IPP.

Table - 3 Locations and capacity power plants to be built in second phase of crash

program

Locations/types of power plant Name of project Capacity

Java – Bali PLTGU Muara Tawar 825 MW PLTU (4 Projects) Cilacap Baru 2.000 MW Indramayu Baru 1.000 MW Pemalang, Jawa Tengah 2.000 MW PLTP (14 Projects) Bedugul 10 MW Cibuni 10 MW Cisolok-Sukarame 30 MW Darajat 75 MW Dieng 115 MW Tangkuban Perahu 110MW Ijen 30 MW Kamojang 60 MW Karaha Bodas 140 MW Patuha 180 MW Salak 40 MW Ungaran 55 MW Wayang Windu 180 MW Wilis/Ngebel 110 MW Outside Java – Bali West Kalimantan 164 MW PLTU (5 projetcs) Ketapang 20 MW Putusibau 10 MW Sanggau 14 MW Sintang 20 MW Parit Baru 100 MW South and Central Kalimantan 348 MW PLTGU Muara Teweh 120 MW PLTU (3 projects) New PLTU (Kalsel) 200 MW

Energy


Table 3 – cont’d Locations/types of power

plant Name of project Capacity Pangkalan Bun 14 MW Sampit 14 MW East Kalimantan 456 MW PLTU Berau 20 MW Melak 10 MW New PLTU (Kaltim) 200 MW Nunukan 12 MW Sangata 14 MW Muara Jawa 200 MW Maluku 64 MW PLTP (5 projects) Tulehu 20 MW Ambon 12 MW Masohi 10 MW Ternate 12 MW Tual 10 MW NTB 100 MW PLTP (2 projects) Huu 10 MW Sembalun 20 MW PLTU (2 projects) Lombok 50 MW Sumbawa 10 MW NTT (2 projetcs) 40 MW PLTP Mataloko 10 MW PLTU Kupang 30 MW. Papua 114 MW PLTU (6 projects) Biak 14 MW Jayapura 22 MW Manokwari 14 MW Timika 14 MW Sorong 30 MW Merauke 20 MW Source: PLN

Project Tenders Until now details of the second phase of the electricity crash program are still studied by the government and PLN. Whereas, PLN plans to hold tender for the development of power generating plants to be built in the second phase of the program by the end of first half of 2009. According to the Planning and Strategy Director of PLN Bambang Praptono, PT PLN (Persero) tender for the projects to be built in the second phase of the crash

Energy


program was to start in February and the first to be offered was a PLTU in PLTU Pemalang, Central Java with a capacity of 2,000 MW. The project will be built by independent power producer (IPP). PLN already invited bidders between January 9-16 in 2009 to submit a statement of express of interest in building the PLTU of Pemalang. Around 30 bidders including foreign companies already indicated interest. Among them are Marubeni, Siemens, WTL, Alstom, Areva, Hua Tien, and Da Tang. Construction of the PLTU alone is estimated to cost US$ 1.8 billion. The entire cost of the project is estimated to reach US$2.34 billion. The power plant with a capacity 2,000 MW could consist of three units with a capacity of 660 MW each or two units each with a capacity of 1,000 MW. Tender to be held in June 2009 The schedule has changed or not yet fixed and similarly the number of projects to be financed by PLN and IPP is yet to be set. The first phase of the crash program is carried out by PLN but the second phase will be built by PLN and IPP. PLN is to have 66% of the project by investment and IPP will take the rest. PLN already set aside US$9,924.3 million for capital expenditure including for power plants to be built in Java- Bali valued at US$ 5,022 million. The largest is for PLTU of Cilacap which has a capacity of 2x1000 MW to cost US$ 2,820 million , followed by PLTU of Indramayu Baru US$ 1,410 million and PLTU of Muara Tawar 825 MW to cost US$ 792 million. PLN has set aside US$ 4,902.3 million for 33 units of power generating plants to be built outside Java-Bali. The largest is for the PLTU of Tarahan and PLTU of Sumbagut (northern Sumatra) respectively with a capacity of 2 x 200 MW and to cost US$ 588.8 million.

Table - 4 Capital expenditure spending for power plant projects by PLN

Name of power plants Type Capacity (MW)

Capex (US$ million)

JAVA - BALI Muara Tawar PLTGU 1 x 825 792.0Cilacap Baru PLTU 2 x 1000 2,820.0Indramayu Baru PLTU 1 x 1000 1,410.0Total Java Bali 3,825 5,022.0Outside Java – Bali Parit Baru PLTU 2 x 25 159.0PLTU Kalsel baru PLTU 2 x 100 302.8PLTU Kaltim baru PLTU 2 x 100 302.8Muara Jawa PLTU 2 x 100 302.8Takalar PLTU 2 x 100 454.2

Energy



Name of power plants Type Capacity (MW)

Capex (US$ million)

Tarahan PLTU 2 x 100 588.8 PLTU Baru (Sumbagut) PLTU 2 x 200 588.8 Sumbar Pesisir PLTU 2 x 200 302.8 Putussibau PLTU 2 x 5 Masohi PLTU 2 x 5 Tual PLTU 2 x 5 Sumbawa PLTU 2 x 10 Merauke PLTU 2 x 10 Kolaka PLTU 2 x 10 Sorong PLTU 2 x 15 Biak PLTU 2 x 7 Manokwari PLTU 2 x 7 Timika PLTU 2 x 7 Muara Teweh PLTGU 1 x 120 104.8 Lhoksemawe PLTGU 1 x 120 104.8 Bakaru II PLTA 2 x 63 252.0 Asahan III PLTA 1 x 174 348.0 Hululais PLTP 3 x 55 232.7 Lumut Balai PLTP 2 x 55 232.7 Ulubelu PLTP 2 x 55 232.7 Sunagi Penuh PLTP 1 x 55 77.6 Lahendong Optimasi PLTP 1 x 25 35.0 Lahendong IV PLTP 1 x 20 28.0 Lahendong V PLTP 1 x 20 28.0 Kotamabagu PLTP 1 x 20 56.0 Merana PLTP 2 x 10 28.0 Bora PLTP 2 x 5 14.0 Lailena PLTP 2 x 10 28.0 Bituang PLTP 2 x 5 14.0 Mataloko PLTP 2 x 5 14.0 Sembalun PLTP 2 x 10 28.0 Huu PLTP 2 x 5 14.0 Tulehu PLTP 2 x 5 28.0 Total Outside Java-Bali 3,307 4,902.3 Total Indonesia 7,132 9,924.3 Source : PLN

Energy


Sources at the ministry of energy and mineral resources said the second phase of the crash program will cost around US$ 21.3 billion or around Rp234.3 trillion. The source said PLN was to build power plants with a total capacity of only 3,600 MW with an investment of US$ 7.8 billion or around Rp85.8 trillion. Development of transmission networks Development of new power generating plants in Java and outside Java will need the support in the availability of transmission and distribution networks. PLN, therefore, has prepared its Power Provision General Plan (RUPTL) for 2008-2018, which constitutes a long term plan for national power provision both by PLN and independent power producer (IPP) until 2018. In the RUPTL, PLN among other things estimates that total investment requirement needed for power installation until 2018 will reach US$83.7 billion. The investment fund will include for power plants valued at US$56.9 billion, transmission networks US$ 14.4 billion, and distribution systems US$12.4 billion. Transmission projects accounted for 45% or US$ 1,955.7 million of the total investment in 2008 . Transmission investment in 2009 is estimated to reach US$ 2,401.5 million in 2009 down to US$ 1,430.9 million in 2010 and to US$ 1,049.7 million in 2011 before rising to US$ 1,408.4 million in 2012. Investment needed for distribution system was around US$ 703 million in 2008, up to US$ 761.6 million in 2009, to US$ 959.9 million in 2010, and to US$ 974.5 million in 2011 and to US$ 1,029 million in 2012. Transmission Development Projects Early 2009, PLN signed 23 contracts for the construction of power transmission networks and main power relay station (GI) for the first crash program for Java-Bali and northern Sumatra valued at Rp2.1 trillion. With the signing, PLN had signed all contracts for transmission projects needed in the crash program. The contracts signed included 18 for the construction of 607 km transmission system valued at Rp1.601 trillion for the power systems in northern Sumatra (North Sumatra, Aceh and Riau) . For the power systems of Java-Bali, there were 5 contracts valued at Rp516,8 billion , including transmission system 154,4 KM long and power relay station with a capacity of 2x60 Mega Volt Ampere (MVA). Earlier on February 8, PLN already signed four transmission contracts valued at Rp127 billion for the power system in Pikitring, Southern Sumatra. The contracts were for the construction of transmission and main relay stations with a capacity of 4x30 MVA. The main power relay stations will be used for expansion of the distribution of power in the southern Sumatra system.

Energy


In addition, PLN will build 300-km long transmission network for Sumatra-Malaysia . The network will cross the sea via Pekanbaru, Riau to Peninsular, Malaysia . It will cost around US$ 300 million. The project will be finance d with a loan from Japan Bank for International Cooperation (JBIC). In the beginning, the project is to be completed in 2009 but there has not been agreement reached in negotiations on power price. The completion target, therefore, will likely be rolled over to 2011. There are three options for the form of the cooperation involving the two neighboring countries -- power "swap" under which Indonesia will sell power to Malaysia and Malaysia to sell power to Indonesia. The transmission system for the project also needs to wait for the completion of development of 275 KV transmissions in the Sumatra interconnection system. The interconnection project needs an investment of Rp5.7 trillion including for 1,200 km transmission network valued at Rp3.5 trillion , 11 new units of main power relay station valued at Rp1.5 trillion and for additional voltage from 150 KV to 275 KV needed by five units of main relay stations in Lubuk Linggau, Lahat, Bangko, Muara Bungo, and Kiliranjao, The fund for the 275 kV interconnection project will include Rp700 billion to be provided by PLN and US$155 million by Japan Bank for International Cooperation (JBIC). The fund from JBIC is to be used for the construction of 300 km transmission systems from Padangsidempuan to Payakumbuh. The cost of the remaining 900 km transmission network project is around Rp2.7 trillion covering Lahat-Gumawang-Seputih Bayak-Sutami, Kiliranjao-Semangkok, and Galang-Binjai. Construction of the 275 interconnection system, will support plan to build 650 km transmission of Sumatra-Java . The interconnection project is to be built in cooperation between PLN and Tenaga Nasional Berhad Malaysia. PLN and Tenaga Nasional will carry out joint studies on the feasibility of the Sumatra-Malaysia transmission project to be carried out by Shaw Power Technology Inc. Early 2008, PLN launched tender for the project of Sumatra-Java transmission system valued at US$ 1.2 billion. In line with the RUPTL target the transmission system is to be operational in 2011 or early 2012. The project is planned as the cost of building the 650 transmission system is cheaper than having to carry coal from Sumatra to fuel power plant in Java. In addition it is not easy to find good locations in Java for new power plants. It is reported that China will finance and build the project. Interest has been shown by China Huadian , which will build the mine mouth PLTU project in Bangko Tengah with a capacity of 4x600 MW. The power plant with such big capacity would be too big for Sumatra alone, therefore, China wants to build the Sumatra-Java transmission project.

Energy


The power to be generated by the PLTU of Bangko Tengah is too big for consumption in South Sumatra while Java will need additional supply. The project is to be completed in 2010. The transmission cable of ”high voltage direct current” (HVDC) will carry at least 2,000 MW of power from the power plant in South Sumatra to Java crossing the sea of Sunda strait . Transmitting such big power will require change in the electric current from alternating current (AC) to direct current (DC), that converter will need to be built in Sumatra and inverter in Java. Converter is instrument which changes the AC to DC. Inverter is an instrument to change DC to AC that the power could be distributed to subscribers. The DC system is the first to be use din Indonesia. It is needed for the transmission of large current covering a long distance. The transmission system will have the capacity of 400-500 KV with DC . It will need an investment of US$ 600 million for cables and transmission . The converters and inverter will cost around US$ 1.1 billion to be provided by Chinese financers. Large transmission and distribution systems still needed Construction of new power plants and increase in demand for power supply will required more transmission systems . Transmission systems needed until 2013 will reach 9,813 km circuit (kms) including 1,574 kms in length of 500 kV AC , 4,093 kms of 275 kV , 2,896 kms of 150 kV, and 1,252 kms of 70 kV .

Table - 5 Transmission networks needed in Indonesia, 2009-2013

Transmission Year Total

2009 2010 2011 2012 2013 Unit (kms) 500 kV AC 159 127 4 764 530 1.574500 kV DC - - - - - -275 kV - 2.152 - - 1.941 4.093150 kV 5.774 6.613 3.571 3.666 1.272 2.89670 kV 80 852 230 90 - 1.252Total 9.813Source : PLN

Medium voltage distribution system (JTM) requirement is estimated to reach, 7,217 kms in 2009 and up to 45,226 kms in 2013. The requirement for low voltage distribution system (JTR) is around 9,103 kms in 2009 to rise to 13,911 kms in 2013.

Energy


The need for transformers is estimated at 1,338 MVA in 2009 up to 7,261 MVA in 2013.

Table – 6 Distribution systems needed in Indonesia, 2009 -2013

Description Unit Year

2009 2010 2011 2012 2013 JTM Kms 7,217 9,469 9,134 9,441 9,965 JTR kms 9,103 11,654 12,022 13,011 13,911 Transformers MVA 1,338 1,740 1,791 1,959 2,173 Source : PLN

Fiscal Stimulus in electricity sector In a bid to boost the real sector, especially to cushion the impact of the global financial crisis, the energy and mineral resources ministry received a fiscal stimulus of Rp500 billion for 2009. Most or 85% or Rp425 billion of the fund will be for power projects and Rp75 billion for energy project. The Rp425 billion funds will be used to finance development of transmission system and main power relay station, and the rest for provision of electricity for rural energy. PLN will use the fund for electricity projects in Java, Bali, and Nusa Tenggara including PLTU of Lombok, PLTU of Atambua, and PLTU of Ulumbu. See the following table.

Table – 7 Allocation of fiscal stimulus in the electricity sector, 2009

Activities Location Budget

(Rp billion)

Workers

Construction of power plants and transmission network (Ikitring Java, Bali and Nusa Tenggara )

NTT, NTB and West Java 230 4,500

Construction of main network and main power relay stations (Ikitring Sulawesi, Maluku and Papua)

South Sulawesi , North Sulawesi and Gorontalo

195 2,850

Rural energy project (Electricity and energy utilization director general)

Spread in 79 village 75 7,600

Total 500 14,950 Source : ESDM

* * * *

TELECOMMUNICATION


DEVELOPMENT OF OPTIC FIBER NETWORK IN INDONESIA

A number of telecommunication operators and multimedia service providers in the country have used fiber optic network like PT. Telekomunikasi Indonesia (Telkom), PT Indosat, PT Excelcomindo, and Indonesia Comnet Plus (Icon+), PT. Supra Primatama Nusantara (Biznet) and PT. Powertel. The networks already cover a number of the country’s main islands such as Java, Sumatra, Bali, Kalimantan, and Sulawesi. Telkom, a state company and the country’s largest telecommunication company, has the longest fiber optic network in Indonesia reaching 13,600 km , followed by Excelcomindo’s 9,950 km and that of Icon + 6,000 km. Another fiber optic network operated by Telkom is an international network of Thailand-Indonesia-Singapore (TIS) coming into operation in December 2003. The TIS network is 1,200 km long linking Songkhla (Thailand), Batam (Indonesia), and Changi (Singapore) to be connected with high capacity submarine cables of other countries. This network is operated in cooperation between Telkom , Singapore Telecommunications Ltd (SingTel) and Communications Authority of Thailand (CAT). The three operators has invested US$30 million each

Table - 1 Fiber optic network providers, length of network and coverage, 2008

Players Length of network (km) Coverage

Telkom 13,600 Java-Sumatra, Java-Sulawesi - Kalimantan

PT Excelcomindo 9,950 Sumatra – Java – Sulawesi - Kalimantan

Icon + 6,000 Java – Bali Indosat 4,000 Java, Sumatra, Kalimantan,

Sulawesi Supra Primatama Nusantara (Biznet)

250 Jakarta, Karawang, Tangerang, Bogor, Bandung, Surabaya,

Powertel 141 Jakarta – Cikampek – Bandung, Tanah Abang – Ged. Cyber - Serpong

Source: Data Consult

Telecommunication


PT Telkom continues to expand net networks Telecommunications players have continued to expand their fiber optic networks to increase their capacity. Telkom plans to start construction of a submarine fiber optic network in 2009 to link Java – Bali – Lombok, several places in Kalimantan, and Sulawesi - Kalimantan. The fiber optic network of Sulawesi-Kalimantan will reach 3,139 kilometers consisting of network of 2,734 KM in Sulawesi and 405 KM in Kalimantan. Ring-1 will cover Makassar, Parepare, Watampone, Bulukumba and Makassar (South Sulawesi). Ring-2 to cover Parepare, Palopo (South Sulawesi) Parigi, Palu (Central Sulawesi), Majene, Mamuju (West Sulawesi), Pinrang, and Parepare (South Sulawesi) and Ring-3 to cover Parigi (Central Sulawesi), Gorontalo, and Manado (North Sulawesi). This project is named 'JaKa2LaDeMa' and will need an investment of US$110 million. It is to be completed in mid 2010. The network will be used as a backbone to promote data and voice traffic, e-commerce, and video. The contractor to build the project is Fujitsu from Japan. In this project, Fujitsu will cooperate with a German partner Norddeutsche Seekabelwerke GmbH (NSW). NSW will provide repeater which will be integrated with repeated cables, while Fujitsu as the main director, will provide terminal, repeaters, branching units system integration, and all services needed by the project. In mid 2008, Indosat also began to build submarine cable communication system (SKKL) to reach 1,300 kilometers linking Java - Kalimantan - Batam – Singapore. The project, which will have 4 landing points in each island such as: Tanjung Pakis (Karawang, West Java), Sungai Kakap (Pontianak, West Kalimantan), Tanjung Bemban (Batam) and Changi (Singapore), is named Jakabare. Construction of the Jakabare SKKL which will have a bandwidth capacity of 160 to 640 Gigabit per second (Gbps) is expected to be completed in the first half of 2009. This network will also be used to promote the network capacity of service of the Indonesia – Singapore route. The project will be built by Indosat in cooperation with NEC Corporation. Powertel, a new player, plans to continue to expand its fiber optic network to reach 3,400 km, including 2,400 km to link cities in Java connected with railways and 1,000 km to link electric poles.

Telecommunication


Powertel also plans to build 2,000 km long fiber optic network between cities connected with railways in Sumatra. Powertel was established in 2004 to operate in closed fixed line service using the technology of Broadband over Powerline (BPL). The players are mainly telecommunication companies which concentrate in development of network of backbone fiber optic between cities or islands to support voice and data traffic of their telecommunication business. However, there are some developing “last mile” network in the form of Metronet such as Indosat through its subsidiaries Indosat Mega Media (IM2), and Icon+ . Player like Biznet concentrates in development of fiber optic network for last mile in large cities. The strategy used by Biznet is developing Metronet to be connected with business buildings. Currently Biznet has established connections with 263 buildings including 248 buildings in Jakarta, 5 in Surabaya, 1 in Bogor, 3 in Bandung, 4 in Tangerang with its fiber optic.

Picture - 1 Map of fiber optic network of Telkom in Sulawesi and Kalimantan

Telecommunication


Contractors of fiber optic projects in Indonesia NEC from Japan is a vendor for fiber optic network often used by telecommunication operators in Indonesia. A number of projects like RMJ SKSO Fiber Optic cable of Package III in Kalimantan of Telkom, Dumai – Melaka Cable System (DMCS) of Telkom and Telekom Malaysia, and SKKL of Indosat using NEC as the vendor. Meanwhile, Fujitsu won other projects of Telkom such as 2,999 km long Jasuka (Jaea – Sumatra – Kalimantan).

Table - 2 Vendors of fiber optic networks in several network projects in Indonesia

Operator Projects Length

(km) Network vendor

Vendors of fiber optic

Value (US $ million) Year

Telkom Installation of Fiber Optic RMJ SKSO cable of Package III Kalimantan

NEC PT. Jembo Cable Company, Tbk

2008

'JaKa2LaDeMa' 3,139 Fujitsu and NSW

110

2009

Jasuka (Java – Sumatra – Kalimantan)

2,999 52

Telkom – Telekom (Malaysia)

Dumai – Melaka Cable System (DMCS)

150 NEC - 9,3

2005

Telkom High Performance Back Bone (HPBB) Sumatra

2,000 Siemens - Pirelly

65

Indosat Sea cable communications system (SKKL) Jakabare (Java, Kalimantan, Batam, Singapore)

1,300 NEC -

2008 - 2009

Icon+ Procurement of conductor and fiber optic project

PT. Voksel

2007

Excelcomindo 550 Alcatel Lucent

31 2008 - 2009

Source: Data Consult Development of Palapa Ring Project The Palapa Ring project is a fiber optic network project in eastern Indonesia initiated by the government and to be carried out by a number of major telecommunications companies PT. Telkom, PT. Indosat, PT. Excelcomindo Pratama and PT. Bakrie Telecom.

Telecommunication


This project was earlier estimated to cost only US$180.4 million . The networks total 4,450 km in length including 3,850 km under the sea and 600 km on land. It will have 15 landing points to go across 21 regencies/cities in eastern Indonesia . This project was to be completed this year, but its implementation has been delayed . The stumbling blocks include the soaring cost from earlier estimate of US$180 million to US$700 million as a result of the surges in the prices of optic cables and equipment. The joint venture investment of US$180 million was to be provided by PT Telkom US$90 million , PT Indosat Tbk US$30 million , PT Excelcomindo Pratama Tbk US$30 million and PT Bakrie Telecom Tbk US$30 million . The investment value was reduced with the falling value of the rupiah that has weakened to the level of 11,000 per US$ . With the rupiah was weakened to that level the joint venture investment fell by US$30 million . The cost was estimated when the rupiah was at 9,000 per US$. The government as the facilitator has decided to use the Universal Service Obligation (USO) fund as a soft loan for the consortium to cover the shortage in fund. The USO fund is raised from a contribution of 1.25% of the gross income of service and telecommunication network operators. Last year USU fund totaled Rp1.6 trillion. The funding is made through a special team called ICT (information communication technology) The team is made up of officials of the office of the state minister for communications and informatics, the National Development Planning Board, and the finance ministry and the office of the coordinating minister for economy. However, until now it is not yet clear how the funding mechanism will work. Meanwhile, vendors that took part in the tender as the contractors of the Palapa Ring project include NEC Corporation, NSW-Fujitsu and Alcatel-Lucent. The winner of the tender is yet to be announced as the prices offered by the bidders are much higher or twice as much as earlier estimate. Meanwhile the vendors already utilized their full capacity at present as there are many fiber optic network projects in the world. Therefore, its is almost impossible for them to complete the project this year as originally scheduled. The delay in the implementation of the project results in delay in the order for equipment needed by the project .

Telecommunication


Picture - 2 Map of the Palapa Ring project

Source: Data Consult Conclusion and prospects With the fast growing telecommunications industry in Indonesia and abroad, fiber optic network is expected to remain high in demand in the country and in the world in general. Fiber optic networks are vital for telecommunications companies. Telecommunications companies which focus on voice and data services will tend to develop backbone network inter city, inter-island with nation wide coverage. Ones which focuses on closed fixed service tend to develop last mile network in large cities. This network generally provide connections commercial buildings and later expected to also cover houses with the growing demand for data communication service. The global crisis is expected to affect plans of telecommunications companies in Indonesia in building fiber optic networks but when the condition improves they are expected to immediately resume their projects .

* * df * *

FINANCE


PLN TO ISSUE BOND TO FINANCE SECOND PHASE OF PROGRAM TO

BUILD 10,000 MW POWER PLANTS Backgrounds The government has launched a crash program to be carried out by PLN in the electricity sector to cope with growing shortage in power supply in Java and other regions. Under the crash program PLN is building coal-fired power plants with a total capacity of 10,000 megawatts to be completed in 2010 - 2011. The program starting in mid 2006 will include construction of 10 units of power generating plants with a total capacity of 6,900 MW in Java and 25 power generating plants with a capacity of 3,100 MW outside Java. The domestic demand for power is forecast to grow more than 9% annually in the next 10 years. Meanwhile, the government hopes to be able to meet 95% of household power requirement in 2018, up from 60.8% in 2007. A number of state banks and private banks have pledged to provide loans for the projects. Among the banks are Bank Mandiri, BNI, BRI, BCA and Bank Mega. The banks have been known to be involved in financing large infrastructure projects including toll roads and telecommunication projects. A number of foreign banks especially Chinese banks have pledged loans for the power projects such as China Exim Bank, Bank of China and Japan Bank for International Cooperation (JBIC). So far around 60% of the first crash program has been completed. In 2009, construction of a number of power plants with a total capacity of 2,000MW is expected to be completed including PLTU Banten and PLTU Rembang. The project of PLTU Indramayu, valued at around US$ 592 million is financed by Bank of China. Currently the project, which is part of the first crash program has been 71% completed. It is expected to be fully operational in September 2009. Meanwhile similar projects in Suralaya, Paiton, Pacitan, Pelabuhan Ratu, and Meulaboh are also to be financed by Chinese banks. The Suralaya and Paiton projects valued at US$ 615 million are now 64% completed financed by China Exim Bank, which already disbursed US$188 million. The projects in Pacitan, Pelabuhan Ratu, and Meulaboh are still in the process of negotiations all valued at around US$899 million. Meanwhile, China Development Bank has agreed to provide a loan of US$262 million for PLTU Rembang.

Finance


The government is optimistic that the construction of the power generating under the first crash program will be completed as scheduled although there has been delay in the disbursement of fund over disagreement in interest rate and the case of aircraft involving state airline company Merpati Nusantara Airlines, which failed to fully honor its contract to buy a number of aircraft from Chinas’ aircraft maker Xi’an Aircraft Industry. Second Crash Program to cost US$17.3 billion Vice President Jusuf Kalla has instructed PLN to immediately prepare for the launch of the second phase of the crash program building more power plants with a total capacity of 10,000MW. Tenders for the projects will be held in the second quarter of this year for projects to be built by independent power producers (IPP) and in the third quarter of this year for projects to be built by PLN. The second phase of the crash program will include construction of coal-fired power plants to make up 26% of the total additional capacity, hydropower and geothermal power plants to account for 60% and gas fired power plants for 14%. Investment needed for the second phase is around US$ 17.3 billion including US$ 15 billion for power plants and the rest for transmission and distribution systems. The projects to be built by PLN will cost around US$ 3.8 billion and those to be carried out by IPP to cost around US$ 13.5 billion. According to plan, PLN will build power generating plants with a total capacity of 3,600 MW, and IPP to build power generating plants with a total capacity of 6,400 MW. The government hands over the projects to the private sector as PLN has limited financing capacity. The private investors will be selected through tenders. Currently the government is finalizing the preparation for the tender documents. The government is considering providing guarantee for bank loans used for the PLN projects.

Table – 1 Investment for second phase of 10,000 MW power projects

Description Power generating plants to be built Investment

PLN 3,600 MW US$ 3.8 billion IPP 6,400 MW US$ 13.5 billion Total 10,000 MW US$ 17.3 billion Source : Energy and Mineral Resources Ministry

Finance


PLN’s bonds valued at Rp1.5 trillion PLN needs to raise up to Rp10.7 trillion in 2009 for Rp17.3 trillion second crash program. PLN has issued bonds when the bond market was tight. PLN issued conventional bond and sharia bonds valued at Rp1.5 trillion. The bond fund will be used to finance the construction of power generating plants and transmission systems. Under the second phase of he crash program there will be 99 projects to be built with a total power generating capacity of 10,000MW. Apart from the Rp1.5 trillion bonds, the projects will be financed with state budget fund totaling Rp2.4 trillion, export credits totaling Rp5.50 trillion and syndicated loans amounting to Rp1.33 trillion. The bonds served as alternative to raise funds in 2009. The coupon rate was based on the market rate to follow the trend of the benchmark interest rate of Bank Indonesia. The bonds carry fixed rates ranging from 15.7% to 17.2% with the B series to carry a coupon rate of 15.7%-16.7% and the A series 16.2%-17.2%. PT Danareksa Sekuritas, PT Trimegah Securities Tbk. and PT Indo Premier Securities were named the underwriters. The 10th conventional bond of PLN with a nominal value of Rp1,440 billion consists of two series A series for 5 years valued at Rp1,015 billion and B series for 7 years valued at Rp425 billion. The third sharia bond valued at Rp760 billion consists of two series A series for 5 years valued at Rp293 billion and B series for 7 years valued at Rp467 billion. The conventional and sharia bonds are given the idAA- (Double A Minus ; Stable Outlook) rating and idAA- (Double A Minus Syariah; Stable Outlook) rating respectively. The bonds are the first conventional and sharia bonds listed on the Indonesian Stock Exchange in 2009, but they are the 10th and the 3rd respectively for PLN. So far PLN has issued nine conventional bonds, two sharia bonds and two global bonds.

Table – 2

Conventional bonds and sharia bonds of PLN, 2009

Types Nominal Code Coupon rate Term Bond X A series Rp1,015 billion PPLN10A 16,2% - 17,2% 5 years B series Rp425 billion PPLN10B 15,7% - 16,7% 7 years Total Rp1.440 billion

Finance


Table 2 – cont’d Types Nominal Code Coupon rate Term

Sharia bonds A series Rp293 billion SIKPPLN02A 5 years B series Rp467 billion SIKPPLN02B 7 years Source : BEI

Financial performance PLN needs large fund for investment. Its income from its subscribers is not enough to cover its investment. The financial performance of the state company could improve with the growing power consumption of 9% annually in the country in the next 10 years. In the first half of 2008, PLN posted Rp78 trillion in income up from Rp52 trillion in the previous year. The increase in income was attributable to both an increase in sales and subsidy from the government. PLN hopes to be able to meet 95.5% of household power requirement in 2018, up from 60% in 2007. In 2009 it plans to invest in transmission network in the form of project program valued at Rp10.73 trillion including Rp3.7 trillion for power projects of 10,000 MW and Rp7.03 trillion for electric energy evacuation. The Rp10.73 trillion investment is to be covered with the bond fund of Rp1.5 trillion, state budget fund Rp2.4 trillion, export credits Rp5.5 trillion, and syndication Rp1.33 trillion. In the first half of 2008, PLN posted a net loss of Rp1.9 trillion and had a current liabilities of Rp155 trillion. Its earning before tax, interest, and amortization (EBTIDA) in 2008 was valued at Rp17 trillion, up from Rp13.3 trillion in 2007 and from only Rp9 trillion in 2006 and 2005. Its debt to EBTIDA ratio in 2008 dropped to 6.3 times from 15.7 times in 2007. The net loss posted by PLN was caused by cost of fund and foreign exchange loss. Its income in the first half of 2008 reached Rp78 trillion or a 50% increase year-on-year. The financial performance of PLN is propped up with additional electricity subsidy from the government. Financing by state banks PLN has received Rp21 trillion in loans to finance its second crash program. A consortium of three state banks has agreed to provide Rp21 trillion of its total requirement of Rp90 trillion. The deficit will be sought from foreign financers. The Rp21 trillion fund will be enough to cover funding in three years until 2010. Meanwhile, BRI said the Rp21 trillion loan is for three years to be serviced Rp7 trillion every year.

Finance


Regional Development Banks (BD) have formed a consortium to provide credits for 16 projects of PLTU valued at Rp5 trillion. The consortium is made up of 22 BPDs and PT Bank Rakyat Indonesia Tbk (BRI). General Chairwoman of the association of BPDs Winny E Hasan said the credits for power generating projects plants are guaranteed by the government, therefore, there is almost no risk. The lead arrangers of the consortium are Bank DKI, Bank Papua, Bank Jatim, Bank Kaltim, and Bank Sulsel. A number of BPDs have also formed a consortium to help finance the second phase of the 10,000 MW crash program with a credit of Rp4.6 trillion The guarantee for the credits to finance the construction of 13 power generating plants has been signed. In this consortium the lead arranger is Bank DKI with co-lead arrangers Bank Jatim and Bank Papua. PLN’s bonds bought by local investors Investors began to show interest in bond market as indicated by the purchases of a number of corporate bonds by local investors early this year. Insurance companies were the largest buyers of rupiah bond issued by PLN. Insurance companies bought Rp961.6 worth of the Rp1.5 trillion bonds issued by PLN. The bonds bought by insurance companies included Rp510 billion in conventional bonds and Rp451.5 billion in sharia bonds. Other buyers of the PLN’s bonds included pension fund companies accounting for Rp625,5 billion, banks Rp320 billion, corporation and institutions Rp135 billion, securities companies Rp39.5 billion, and investment managers Rp20 billion; foundations and individual investors Rp94 billion and Rp4.5 billion respectively. Market sources said state run workers insurance company Jamsostek bought 30% of the bonds valued at Rp450 billion. Jamsostek requested a higher interest rate of more than 16%. By the end of October 2008, the funds managed by Jamostek reached Rp57.2 trillion, down from end Rp61.2 trillion by the end of September. The decline was attributable to falling value of share investment. Jamsostek placed most of its investment in bonds valued at Rp29.536 trillion or 51.5%, followed by deposits at Rp18.279 trillion (35%), shares Rp7.696 trillion (13.5%), and mutual fund Rp1.81 trillion (3.1%), and the rest in property and participation. A number of investors have rushed to buy PLN’s bonds attracted by high coupon rate. The enthusiastic market response might encourage PLN to issue more bonds this year.

**rth**

CORPORATE NEWS IN BRIEF


SEMEN TONASA TO START CONSTRUCTION OF NEW FACTORY TO COST US$318 MILLION. PT Semen Tonasa, a subsidiary of state cement maker PT Semen Gresik will start construction this year of the new plant with a capacity of 2.5 million tons of cement annually . The project, its fourth unit, will cost around US$318 million. Semen Tonasa is expected to be able to turn out 5.9 million tons of cement a year when its new production facility comes on line by the end of 2011 PT Semen Tonasa already has three factories in operation in the regency of Pangkep, South Sulawesi. . Last year , the company produced an estimated 3.6 million tons of cement , up from 3.2 million tons in the previous year. Work is already in progress to build the new factory . Meanwhile, PT Semen Padang, another subsidiary of Semen Gresik in West Sumatra also plans construction of its fourth unit called Indarung IV with a capacity of 2.3 million tons a year . Construction of the project, however, may be delayed over problem in environmental issue . BAKRIE SUMATERA REPORTS RP2.9 TRILLION IN INCOME . PT Bakrie Sumatera Plantations Tbk recorded Rp2.9 trillion in income in 2009 from the sales of crude palm oil and rubber. The company plans to set aside US$10 million in capital spending this year only for routine work of asset maintenance. The finance director of the company Harry M. Nadhir said the company recorded improvement in financial performance in 2008 r compared with the previous year thanks mainly yo high prices of its commodities in the forst and second quarter of that year. . In the first three quarter of 2008, the company recorded Rp2.39 trillion in income and Rp451.54 billion in net profit or an increase of 115.3% from the same period in the previous year. Harry , however, predicted a sharp decline in performance this year with the falling prices of its commodities . The subsidiary of the Bakrie Group plans expansion of plantations over 100,000 hectares of lands its has . It hopes to use up to 50,000 hectares of the land to grow oil palm and rubber trees. BUKIT ASAM TO INVEST US$20 MLN IN POWER GENERATING PROJECT. State coal mining company PT Tambang Batubara Bukit Asam will invest US$20 million in it’s a power generating project in Lampung . The power plant will have a capacity of 16 megawatt . Bukit Asam already has planned to build a 30-MW power plant in Tanjung Enim, South Sumatra. The company builds the power plants to guarantee power supply for its own consumption. The Tanjung Enim plant will cost around US$41.4 million to be built by a consortium of China Overseas and PT Welter Energi Nusantara . The power plant is expected to be operational in 2011. The company more than doubled its net profit to Rp1.7 trillion last year from Rp726.21 billion in the previous year . Eko Budhiwijayanto, the company secretary, said Bukit Asam recorded Rp7.21 trillion in income in 2008 or an increase of 75% from the previous year largely on higher price.. Sales on the domestic market rose 77% in value to Rp4.24 trillion and exports surged 72% to Rp2.97 trillion, Eko said.

Corporate News in Brief


KIDECO POSTS 141.47% IN NET PROFIT. The net profit of the country’s third largest coal producer PT Kideco Jaya Agung shot up 141.46% year-on-year to US$229.4 million in 2008 on strong sales performance. The company sold 21.7 million tons of coal. The subsidiary of PT Indika Energy recorded US$1.08 billion in income or an increase of 54.11% in the same period, Rotina Rosabai, the vice president of Indika Energy said. Around 87.1% or US$200 million of the profit will be distributed as dividend and Indika will have a share of 46%, Rotina said Kideco, which has a proven reserve of 416 million tons of coal, plans to produce 30 million tons this year up from 22 million tons last year . Kideco is the largest contributor to the profit of Indika Energy. Last year it accounted for r 68.% of the total net profit Indika Energi. Other shareholders of Kidoco nclude Samtan Co.Ltd ( 49%) and PT Muji Inti Utama (5%) . It has a 30-year mining concession until 2023. PHILIPS LIGHTING TO BUILD ENERGY SAVING LAMP FACTORY. PT Philips Lighting Indonesia plans to build a factory to produce energy saving lamps in Surabaya, East Java with an investment of US$10 million. The factory will have a capacity to produce 12 million units of energy saving lamps . The subsidiary of the Dutch company Royal Philips Electronics already have an electric lamp factory in Surabaya producing bulbs . The new factory will produce small size energy saving lamps. Earlier Chairman of the association of electric lamp industry John Manoppo said the country’s consumption of energy saving lamps is predicted to reach 160 million units this year , up from 120 million units last year. The country’s production of energy saving lamp is estimated to reach 20million units in the first quarter of this year , or up 40% from 12 million in the same period last year. The surge in production followed a decline in imports as a result of the restriction imposed by the trade ministry on the imports of certain commodities including energy saving lamps. The country’s production of energy saving lamps will not be enough to meet the domestic consumption but the restriction has helped increase the capacity utilization of the producers, John said. ANTAM-KRAKATAU STEEL TO INVEST $63.5 MLN IN STEEL PROJECT. Two state companies will invest Rp700 billion (US$63.5 million) in an iron ore project in the area of Batulicin in the regency of Tanah Bumbu in South Kalimantan. Mining company PT Aneka Tambang (Antam) and steel maker PT Krakatau Steel have established a joint venture company PT Meratus Jaya Iron & Steekl to run the iron steel processing plant . Krakatau Steel has a 66% stake in the project and Aneka Tambang has the remaining 34%. The plant with a capacity 315,000 tons of sponge iron a year is expected to be operational in 2011, Antam President Alwin Syah Loebis said. Krakatau Engineering, a subsidiary of Krakatau Steel, has been named contractor to build the project, Alwin said. Work is already in progress in the project . He said the regional administration will be involved in the project . Antam will set aside Rp3 trillion in capital appending this year up from Rp2.5 trillion last year .

ECONOMIC NEWS IN BRIEF


GOVT OFFERS 8 INFRASTRUCTURE PROJECTS VALUED AT Rp4.4 TRILLION The government will offer 8 infrastructure projects valued at Rp4.4 billion to the private sector under public private partnership (PPP) scheme this year. The projects include toll road, railways, sea transport , drinking water and power generating facilities. The government has been set to make a big stride toward implementation of massive infrastructure projects this year. Earlier the finance ministry announced plan to disburse Rp12.2 trillion (US$1.02 billion) in stimulus . Implementation of the projects would create many badly needed jobs to cushion the impact of the global economic crisis, Chief Economics Minister Sri Mulyani Indrawati said. The Rp12.2 trillion funds is part of Rp73.3 trillion to be provided by the government in economic stimulus this year. The government has also established a financing company PT Sarana Multi Infrastrukture (SMI) which will finance infrastructure projects. SMI, which is expected to start operation in April, will provide financial support for projects especially ones failing to attract investors but considered having good prospects. SMI will start with an initial capital of Rp1 trillion (US$90 million) to be provided by the government INVESTMENT IN TEXTILE INDUSTRY FEARED TO FALL ON SHRINKING ORDERS . Shrinking orders for Indonesian textiles are feared to discourage investment in textile industry . Modernization program in tetxile industry is likely to be delayed as a result. The government has offered subsidized credit to finance textile factory restructuring to imrpove efficiency . The textile and textile product director at the industry ministry Aryanto Sagal said investment under the restructuring program in the industry totaled Rp1.8 trillion , but with the fall in order, investment is feared to shrink by 50%. Earlier, Industry Minister Fahmi Idris predicted that the country’s textile and apparel exports are feared to plunge 25.23% to US$8 billion this year from US$10.7 billion last year on weak demand in major markets. Meanwhile, the Indonesian Textile Association (API) said as the country exports 80% of its textile production, the impact of global economic slowdown is serious on the industry. API, however, will maintain its export target of US$11 billion as the Japanese market is still strong, the association chairman Benny Soetrisno said. The Japan Textile Importers Association said its imports of textiles and apparels from Indonesia were valued at US$135 million last year. TELECOM AND INFORMATICS INDUSTRY ASKED TO HAVE HIGHER LOCAL CONTENT. The industry ministry wants an increase in local content for the country’s the telecommunications and informatics industry saying the industry should use local components worth at least US$1.2 billion or 30% of its total capital spending which reaches US$... this year. An increase is expected in the use of local components with expected decline in exports this year. Exports of telecommunications and informatics products are expected to decline 10% this year as a result of the weak demand in international market. Based on data at the industry ministry, the local content of the country’s telecommunications and

Economic News in Brief


informatics products is low accounting for less than 5% of the capital spending by producers. The industry recorded production valued at Rp51.85 trillion last year or an increase of 13.38% from the previous year. The low use of local components makes it difficult for the industry to optimize its capacity. Most producers, therefore, operate below their capacity. INDONESIA TO USE MORE ORGANIC FERTILIZERS FOR FOOD CROPS. The government will set aside Rp7 trillion to increase the country’s capacity to produce organic fertilizers including bio-fertilizers in a bid to reduce the use of chemical fertilizer. Earlier Agriculture Minister Anton Apriyantono said. The government will soon replace 50% of chemical fertilizers with organic fertilizers for food crops Anton said the fund will be used to finance 20,000 units of organic fertilizer projects . He told farmers in Bone wide farmlands have been less fertile as a result of long use of chemical fertilizers Every year larger supply of fertilizers are needed to make up for the loss in fertility caused by chemical fertilizers, he said without giving more details about the plan. He said the plan will also open more jobs in rural areas as production of organic fertilizers will be produced by the farmers themselves. Indonesia still is dependent on imports for most of its chemical fertilizer requirement like KCl, ZA, he was quoted as saying GOVERNMENT MAINTAINS ZERO % EXPORT TAX ON CPO . The government will maintain the export tax of 0% on crude palm oil for April, 2009 based on the average price of that commodity in Rotterdam a month earlier . The price in Rotterdam averaged US$558.38 per ton in March or below the price level of US$700 that requires the slapping of an export tax. The trade ministry has not issued a new export benchmark price on which the export tax will be set. Based on the government regulation No. 55/2008 , a 1.5% export duty will be slapped on CPO if the average price of that commodity reaches US$701 to US$750 per ton and the export tax will be 3% if the price reaches US$751-US$800 per tons. Meanwhile, Indonesia’s exports of crude palm oil (CPO) and derivatives are forecast to rise by up to 7% to 15.5 million tons this year from 14.1 million tons last year. A chairman of the association of palm oil companies (Gapki) Susanto said strong demands are still expected from India, China and Europe to offset a decline in demand from the United States A number of factors including soybean production , the price of crude oil and industrial growth in destination countries will determine palm oil demand in the world market , he said. He said the world’s production of soybean is on the decline resulting in an increase in the price of that commodity. The price of CPO has been picking since early this year to reach US$550 per ton at present, he was quoted as saying by the newspaper Bisnis Indonesia. A decline has also been recorded in the production of CPO by Indonesia and Malaysia, which both dominate CPO production in the world.

* * *

APPENDICES


DIRECTORY OF CABLE COMPANY IN INDONESIA

PT. KABELINDO MURNI Tbk. Alamat : Jl. Rawagirang No. 2,

Kawasan Industri Pulogadung Jakarta Timur - 13930, Indonesia Phone : (62-21) 4609065, 4609550 Fax No.: (62-21) 4609064, 4604271 Web-site www.kabelindo.co.id Manajemen: Elly Soepono (Chairman) Tan Robert Tanto (President Director) M CH Abbas (Director)

PT. KMI WIRE AND CABLE Tbk. Alamat : Jl. Raya Bekasi Km. 23.1

Cakung, Jakarta Timur - 13910, Phone : (62-21) 4601733 Fax No.: (62-21) 4601738, 4610588 Web-site: www.kmi.co.id Herman Nursalim (President Director) Lie Than Hian (Director)

PT. SUCACO Tbk. Alamat : Jl. Kebon Sirih No. 71

Jakarta Pusat - 10340, Phone No.: (62-21) 3100525, 3101525 Fax No.: (62-21) 31931119, 3146426 Website: www.sucaco.com Management: Erwin Suryo Raharjo (Chairman) Elly Soepono(President Director)

PT. TRANKA KABEL Alamat: Jl. Raya Bogor Km. 29

Cimanggis, Depok - 16962, Phone No. : (62-21) 8718888, 8722222 Fax No.: (62-21) 8718666 Web-site : www.trankakabel.com

PT. SUMI INDO KABEL Tbk. Alamat : Jln Gatot Subroto Km. 7.8 Ds. Pasir Jaya, Kec. Jatiuwung, Tangerang - 15135 Phone No.: (62-21) 5922404, 5928066 Fax No.: (62-21) 5922576, 5901469 Website: www.sikabel.com Management: Uray Sjaiful Hamid (Chairman) Kojiro Ishese (President Director)

PT. JEMBO CABLE COMPANY Tbk. Alamat : Jl. Pajajaran Desa Gandaria, Kec. Jatiuwung, Tangerang - 15137 Phone No.: (62-21) 55650468, 5919442-45 Website: www.jembo.com Management: Santoso (President Director)

http://www.kabelindo.co.id/

http://www.kmi.co.id/

mailto:www.sucaco.com

http://www.bri.co.id/tentang/manajemen_profile.aspx?id=21

http://www.trankakabel.com/

http://www.jembo.com/

Appendices


Table cont’d PT. VOKSEL ELECTRIC Tbk.

Alamat : Jl. Narogong Km. 16 Cileungsi, Bogor - 16820

Phone No.: (62-21) 8230525, 8230527 Fax No.: (62-21) 8230526, 8230177, 82491701 Website: www.voksel.co.id Management: Chandra Gunawan (Chairman) Ferry Tjandrawinata (President Director)

PT. FURIN JAYA Alamat : Jalan Raya Serang Km. 17.5,

Desa Telaga Kec. Cikupa Tangerang Phone : (62-21) 6616736 - 7 Fax No.: (62-21) 6610439 Web-site www.furin.co.id

PT. AUTOCOMP SYSTEMS INDONESIA Alamat : Jalan Raya Serang Km. 24,

Balaraja, Tangerang - 15610, Phone : (62-21) 5951535 Fax No.: (62-21) 5951539 Web-site: www.pemi.co.id E-mail: [email protected], [email protected]

PT. COMMUNICATION CABLE SYSTEMS INDONESIA Alamat : Wisma Millenia Jl. MT. Haryono Kav. 16, Jakarta -12810 Phone No.: (62-21) 8310212, 8310216, 8310302 Fax No.: (62-21) 8310217 E-mail: [email protected], [email protected],

[email protected] Website: www.corning.com

PT. PRYSMIAN CABLES INDONESIA Alamat: Gedung BRI II, Room 1502 Jl. Jend. Sudirman 44-46, Jakarta - 10210, Phone No. : (62-21) 5713313, 5742301 Fax No.: (62-21) 2512715 E-mail: [email protected], [email protected] Web-site : www.prysmian.com

PT. INDOWIRE PRIMA INDUSTRINDO Alamat : Jl. Margomulyo Indah C-1 Buntaran Tandes, Surabaya - 60184 Phone No.: (62-31) 7491694, 7491695 Fax No.: (62-31) 7491696 E-mail: [email protected] Website: www.indoprimagroup.com

* * *

http://www.voksel.co.id/

http://www.furin.co.id/

http://www.pemi.co.id/






http://www.corning.com/



http://www.prysmian.com/


http://www.indoprimagroup.com/

Appendices


1. ECONOMIC INDICATORS Indonesia’s inflation by Group of Commodities, 2005– 2009*) (2002=100)

Year/ Food Prepared Food,

Housing, Water,

Cloth-ing

Medi-cal

Education, Trans-port,

General

Month Stuff Beverage Electricity Care Recreation Comm. & Cigarette Gas and & Sports Financial &Tobacco Fuel Services

2005 13.91 13.71 13.94 6.92 6.13 8.24 44.75 17.112006 12.94 6.36 4.83 6.84 5.87 8.13 1.02 6.602007 11.26 6.41 4.88 8.42 4.31 8.83 1.25 6.592008 16.35 12.53 10.92 7.33 7.96 6.66 7.49 11.062009 Jan. 0.76 0.95 -0.06 0.55 0.37 0.12 -2.53 -0.07Feb. 0,95 0,91 0,28 2,85 0,17 0,04 -2,43 0.21March April May June July August Sept. Oct. Nov. Dec.

Source: BPS (Central Bureau of Statistic) Monthly Indonesia's Consumers Price Indices and Inflations, 2006-2008, April (2002 = 100)

Months 2006 2007 2008 2009 Inflations Inflations Inflations Inflations

January 1.36 1.04 1.77 -0.07February 0.58 0.62 0.65 0.21March 0.03 0.24 0.95April 0.05 -0.16 0.57May 0.37 0.10 1.41June 0.45 0.23 2.46July 0.45 0.72 1.37August 0.33 0.75 0.51Sept. 0.38 0.80 0,97Oct. 0.86 0.79 0,45Nov. 0.34 0.18 0.12Dec. 1.21 1.10 -0.04Inflation rate 6.60 6.59 11.06

Source: BPS (Central Bureau of Statistic)

Appendices


2. EXPORT AND IMPORT Indonesia's Export Development, 2006 – 2009

FOB value (US$ million)

Descriptions

2006 2007 Jan-Des 2008

Jan 2009

% Growth Jan 2009 over 2008

Total Exports 100,799 114,023 136,761 7,153 -36.08Oil & Gas 21,209 22,081 28,958 947 -57.79Crude Oil 8,168 9,226 12,418 373 -55.15Oil Products 2,843 2,871 3,379 71 -93.65Gas 10,197 9,983 13,160 502 74.95Non Oil and Gas 79,589 91,942 107,803 6,206 -30.64Agriculture 3,365 3,937 4,937 292 -8.24Manufacturing 65,024 75,925 88,044 4,907 -35.52Mining & others 11,200.4 12,075 14,821 1,007 -1.24

Source: BPS (Central Bureau of Statistic) Indonesia's Import Development, 2006 – 2009

CIF value (US$ million)

Descriptions 2006 2007 Des 2008*)

Jan 2009*)

% Growth Jan. 2009 over Jan.

2008

Total Import 61,065.5 74,402.7 7,699.9 6,342.6 -33.99Oil & Gas 18,962.9 21,879.6 983.3 1,043.4 -45.61Crude Oil 7,852.6 9,056.7 458.4 257.4 -69.35Oil Products 11,080.3 12,733.7 498.8 737.0 -31.66Gas 30.0 89.2 26.1 49.0 48,900.00Non Oil and Gas 42,102.6 52,523.1 6,716.6 5,299.2 -31,09Consumption Goods 4,738.2 6,624.1 499.1 477.9 -26.30

Raw Materials/ Auxiliary Goods 47,171.4 56,527.3 5,007.5 4,535.8 -38.33

Capital Goods 9,155.9 11,251.3 2,193.3 1,328.9 -17.21Source: BPS (Central Bureau of Statistic)

* * *

Appendices


3. GROSS DOMESTIC PRODUCT The Value of Gross Domestic Product By Industrial Origin At Current Price and At Constant Price 2000

(Trillion Rupiahs) Industrial origin At Constant Price 2000

2005 2006 2007 2008 Agriculture, Livestock, Forestry and Fishery

254.4 262.4 271.6 284.3

Mining and Quarrying 162.6 168.0 171.4 172.3Manufacturing Industry 491.7 514.1 538.1 557.8Electricity, Gas and Water Supply 11.6 12.3 13.5 15.0Construction 103.4 112.2 121.9 130.8Trade, Hotel, and Restaurant 294.4 312.5 338.9 363.3Transport and Communication 109.4 125.0 142.9 166.1Financial, Ownership & Business Services

162.0 170.1 183.7 198.8

Services 160.0 170.7 182.0 193.7GDP 1,749.5 1,847.3 1,964.0 2,082.1GDP without oil and gas 1,604.2 1,703.6 1,821.4 1,939,3

Source: BPS (Central Bureau of Statistic) The Growth of GDP by Type of Expenditure

(Percentage) Type of Expenditure 2005 2006 2007 Qtr IV 2008

over Qtr IV 2007

Private Consumption Expenditure

3.9 3.2 5.0 5.3

Government Consumption Expend.

8.1 9.6 3.9 10.4

Gross Domestic Fixed Capt. Formation

9.9 2.9 9.2 11.7

Export of goods and services 8.6 9.2 8.0 9.5Import of goods & services 12.3 7.6 8.9 10.0GDP 5.6 5.5 6.3 6.1

Source: BPS (Central Bureau of Statistic) *) January – September 2007

* * *

Appendices


4. OIL PRICE AND FOREIGN EXCHANGE OIL PRICES

I T E M Market Latest 1 month 3 months One year Date Price ago Ago Ago

CRUDE OIL PRICE (US$/Barrel) - Sumatran Light 1) Tokyo 3/31/2009 41.89 57.61 71.41 53.22- Arabian Light 2) Europe 3/31/2009 38.53 62.78 123.42 56.46- Arabian Heavy 2) Europe 3/31/2009 35.85 59.97 127.88 59.10- Brent 2) Europe 3/31/2009 37.94 64.38 121.27 66.27- W. Texas 2) - 3/31/2009 43.06 69.87 114.59 67.35REFINED PRODUCT (US$/Gallon) - Fuel Oil 2) New York 3/31/2009 .4570 .4972 .4965 .5642- Gasoline, Premium 3)

New York 3/31/2009 .4241 .4446 .4237 .4440

Sources: 1) FEER - Telerate, 2) AWSJ- Dow Jones International Petroleum Report, 3) AWSJ - Oil Buyer Guide FOREIGN EXCHANGE AND GOLD PRICE IN JAKARTA

ITEM Today 1 month 3 months One year 03-31-2009 ago ago Ago

-FOREIGN EXCHANGE (RUPIAH) US$ Buying 11,075 11,915 9,111 8,895 Selling 12,075 12,035 9,203 9,895 Pound. 15,841 16,991 16,792 16,449 17,276 17,167 16,964 18,357 Aust. $ 7,604 7,408 7,867 6,608 8,294 8,055 7,951 7,352 Sin. $ 7,284 7,448 6,429 5,598 7,950 8,104 6,499 6,231 Mal. $ 3,238 3,238 2,706 2,425 3,275 3,275 2,736 2,700 Hk. $ 1,428 1,538 1,166 1,146 1,558 1,552 1,178 1,274 Yen 112.83 121.78 82.67 78.24 123.03 123.06 83.55 87.06 Euro 14,662 15,170 13,422 11,368 15,992 15,328 13,561 12,648 GOLD PRICE (RP/GRAM) - Gold 24 carat 353,000 353,000 273,000 186,500 AVERAGE INTEREST RATE - JIBOR a. Over night (O/N) 8.7 8.7 5.2 3.0 b. 1 month 9.2 9.2 12.4 13.7- BI Rate 1 month 8.25 8.25 9.00 8.00 - SBI (Primary market) 1 month 10.25 10.25 8.73 11.00

Notes : SBI = Bank Indonesia Certificates, SBPU = Money Market Securities JIBOR = (Jakarta Interbank Offered Rate) n.a. = Data not available Source: Bank Indonesia/Data Consult * * *

Appendices


5. THE INDONESIAN ECONOMIC TRENDS Items 2004r) 2005r) 2006r) 2007r) 2008p)

1. The growth rate of GDP 5.1 5.6 5.5 6.3 6.3 (% p.a.) - GDP per capita (US$) 1,207 1,320 1,663 1,946 2,100 - GNP per capita (US$) 1,165 1,256 1,591 1,700 1,8502. Total export (US$ bill) 71.6 85.6 100.7 113.9*) 128.0*) Total increase (%) 9.3 19.5 17.5 13,0 11.0 Non-oil/gas(US$ billion) 55.9 66.4 79.5 91.9 102.4 Non-oil Increase (%) 17.9 18.5 19.6 15.5 10.2 3. Total import (US$ bill) 46.2 57.5 61.07 74.4*) 95.3 Total increase (%) 39.5 23.6 5.8 21.8 21.9 Non-oil/gas(US$ billion) 34.5 43.4 42.1 52.5 75.3 Non-oil increase (%) 35.7 15.4 4.62 24.7 30.2 4. Current account (US$ bill) 5.9 8.0 9.6 11.0 10.1 *) 5. Reserve assets (US$ bill) 36.3 34.7 42.5 55.9 58.9 *) (End of the year) 6. Total money supply (Rp trill.) 253.8 281.9 361.0 424.4 420.3 *) Increase in 12 months (%) 11.8 12.9 9.4 6.0 6.0 7. Bank credit (Rp trill.) 553.5 689.6 787.1 953.2 980.2*) Increase in 12 months(%) 26.4 20.2 11.7 13.2 14.4 8. Comm. bank deposit (Rp trill.) 965.0 1,134.0 1,298.7 1,413.7 1,493.5 Increase in 12 months(%) 6.7 7.0 6.6 6.6 6.6 9. Average interest rate (% p.a.) a. 3 month time deposit in Rupiah -State bank 6.26 8.17 9.60 7.18 7.28 -Private bank 6.61 8.18 9.88 7.67 7.67b. Short-term credit -State bank 14.6 15.2 15.2 14.3 14.3 -Private bank 15.9 16.0 17.2 15.1 15.1 10. Inflation rate, % p.a 6.40 17.11 6.6 6.59 6.8 -Inflation Jan. – April 2008 4.01 11. Population (million peoples) 214.4 216.6 219.3 222.1 226.2

Notes : r) Revised figures *) January – March 2008 e) Estimate by Data Consult p) Projection revision figures n.a. = data not available Source: Bank Indonesia, Central Bureau of Statistic and Data Consult

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