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MDA Consulting SEA

Transcript of MDA Presentazione

  • Strategic Sectors FocusMr. Luca Vianelli, Partner and Managing DirectorMDA CONSULTING S.E.A. BANGKOK andPT. MUTUALLINK INDONESIA JAKARTAStrategy is important but execution is everythingINDONESIA: The Golden Chance SeminarConfindustria Vicenza, 29th November 2011*

  • AGENDAIndonesia at a GlanceFacts of IndonesiaStrategic Sectors FocusDoing Business in Indonesia


  • Indonesia at a Glance*

  • Country name:Republic of IndonesiaCapital city:Jakarta - 24 Million inhabitants (2010)Total Area:1,904,569 km2 - World ranking 16President:Susilo Bambang Yudhoyono (since October 2004)Population:240,271,522 (July 2009 est.) World ranking: 4Language:Bahasa Indonesia, English, Dutch and local dialectsCurrency:IDR (Indonesian Rupiah) Religion:Islam (majority), Christian, Catholic,Buddha, Hindu Indonesia is the largest Muslim country in the worldIndonesia at a Glance*

  • GDP (Purchasing Power Parity): US$ 1.03 trillion (2010 est.) World ranking: 16

    GDP real growth rate:6.1% (2010 est.) World ranking: 50

    Labor force: 116.5 million (2010 est.) World ranking: 5

    Imports: US$ 127.1 billion (2010 est.) World ranking: 30Indonesia at a Glance*

  • INDONESIA amongst ASEAN Countries*

  • Facts of Indonesia*

  • Sound Economic FundamentalsGDP size of nearly US$ 707 billion in 2010, Indonesia is the largest economy in Southeast Asia.

    Indonesias economy grew by 4.5% in 2009, 6.1% in 2010 and is expected to reach 6.4% this year, providing a case for Indonesias inclusion in the so-called BRIC economies.

    Private consumption accounts for 70% of GDP and has increased by 5.3% in 2008

    Future economic expansion is expected to include more inclusive growth as nominal per-capita GDP is expected to quadruple by 2020, according to a Standard Chartered report.


  • Sound Economic FundamentalsIndonesias debt to GDP ratio has steadily declined from 83% in 2001 to 26% by the end of 2010; the lowest among ASEAN countries, aside from Singapore which has no government debt.

    In April 2011,Standard & Poors had improved Indonesias credit rating to BB+. The rating reflected Indonesias resilience to the global financial crisis, improving government and external credit-metrics, and an ability to manage domestic political challenges to the reform agenda.

    Listed as one of the top 10 most attractive destinations for foreign direct investment (FDI) as per UNCTAD Worlds Investment Prospects Survey in 2010.*

  • GDP Growth in Percentage (year on year)Sound Economic Fundamentals*

  • An Upward Trend in FDI (Foreign Direct Investment) InflowSound Economic Fundamentals*

  • Indonesias Economic PotentialSound Economic Fundamentals*

  • Stronger Investment ClimateAll the improvements that have been and continue to be applied have placed Indonesia as #1 country for entrepreneurship in the recent 2011 BBC survey. It has also managed to jump 10 places to 44thfrom a total of 139 ranked countries in the World Economic Forums Global Competitiveness Report in 2011.Listed as one of 10 countries improving investor protections as per Doing Business Report 2010 by IFC (The World Bank).*

  • Dynamic Demographic BaseOver 50% of the population (240 million people) is under 29 years old and lives in the urban area.

    Education spending accounts for 16% of total government expenditures, higher than any other sector, and university graduates are trained in technical fields such as finance and economics (28%) or engineering and sciences (27.5%).

    Labor cost is relatively low.The services sector has grown by over 16% (from 1998 to 2009).*

  • Populations Growth Projection*

  • Labor Cost in 2009*

  • Abundant Natural ResourcesIndonesia is rich in non-renewable energy (coal), renewable energy (geothermal and hydro power), and agricultural products (palm oil, cocoa and rubber).

    Natural resource-based export has expanded to 52.7% of total share in 2010 from 50.3% in 2009.

    The mining industry accounted for 28% of the total Foreign Direct Investment as of 1st quarter of 2011.

    Development potential is far from saturated, particularly in renewable energy.*

  • Abundant Natural ResourcesIndonesia is home to a biodiversity that is only second to Brazil.Indonesia has become a commodities powerhouse and a leading commodities exporter:*

  • Indonesias mining companiesSource: Kompas Newspaper 23 May 2011*

  • Expanding Global InfluenceA leading member of ASEAN, Indonesia shapes integrative approaches in the region for security, trade and commerce and will be the integral part of the ASEAN Economic Community in 2015.

    Southeast Asias only member of the G-20, the latest global grouping for transnational economic policy.

    Standard Chartered sees Indonesias inclusion in the G-7 by 2030, projecting that Indonesias economy could be the 10thlargest in 2020 and the 5thlargest in 2030.

    Emerging as a key player on cross-cutting policy issues such as climate change, which have direct and indirect impacts on business and investment decisions.*

  • Strategic Sectors FocusAgriculture: Palm Oil, Rubber and CocoaEnergy: Crude Oil, Fuel, Gas, Coal, CBM, Bio-FuelRenewable Energiea: Geo, Hydro, Waste to EnergyInfrastructures: Road, Railways, Seaport*

  • 2010 GDP Composition*

  • 2010 GDP Growth (06 - 10)*

  • The growth of manufacturing industry non-oil and gas amounted 5.1% in 2010 showed a significant increase compared to same period in 2009 which is only reached 2.6%. The highest increases are:

    transportation and parts amounted to 10.35%; fertilizer, chemical and rubber industry grew by 4.67%;other goods industries by 2.98 %2010 GDP Growth (06 - 10)*

  • 2010 GDP Growth (05 - 10)*

  • Agriculture: Sector SnapshotContribution to GDP:15.3% (2010)Contribution to Exports:3.17%Number Employed:41million (2010)Main Products:Palm Oil, Rubber, Cocoa, Cassava, Coffee, Tea, Tobacco, Rice.Main Export Markets: China, USA, Japan, Singapore, Korea, EU.Changes to the Negative Investment List for 2010 have opened up parts of the agricultural sector that were previously closed to foreign investment.

    For example, investors can now own up to 49% in staple crop plantations over 25 hectares such as soybeans, sweet potato, rice and cassava;*

  • Agriculture: World Palm Oil Production (2009)*

  • Agriculture - Palm Oil Plantation Plan*

  • Agriculture: Palm Oil Production and Export*

  • Agriculture Palm Oil Fertile land, a favorable climate and low labor costs have made Indonesia the leading producer of crude palm oil (CPO) worldwide.

    4.5% of GDP and nearly 7% of total export value for 2010. Government targets of a 16% rise in exports for 2011 and more ambitious goals to 2020 which would double output.

    Private enterprises accounting for an estimated 48% of production, small hold farmers at 40% and state owned plantations at 12%.

    Sumatra ha 70% of cultivation while other plantations are found in East and West Kalimantan.

    Government Regulation No. 62/2008 provides a 30% net tax deduction for 6 years for investors in various sectors including the downstream CPO industry.*

  • Source: Oil Palm Business AssociationThe 2007s EU directive that makes mandatory to use at least 10% of biofuel in transportation by 2020 is also contributing to the growing demand.Demand for exports is being driven by China and Indias rapid growth for use as edible oils in foodstuffs and for bio-fuel production. Agriculture Palm Oil *

  • Indonesia is the worlds 2nd largest natural rubber exporter after Thailand, while having the largest area of rubber plantations.

    Demand is predicted to reach 16.2 million MET by 2020 up from 11.2 million MET for 2011 (International Rubber Study Group).

    Consumption of national production is currently only at 15%.Agriculture RubberInvestors may own up to 95% of a 25 hectare or more plot of land for cultivation and integrated downstream facility; this includes sheet rubber, thick latex and the crumb rubber industry. (as per the Negative Investment List 2010)*

  • Association of Natural Rubber Producing Countries (ANRPC)Agriculture Rubbers worldwide production*

  • Indonesia is the worlds 3rd largest cocoa exporter for 18% of global market share with 470,000 MET produced in 2010.

    Demand is arising out of increased confectionary and chocolate consumption from markets such as China and India as well as the European Union.

    Indonesias cocoa production is concentrated in Sulawesi where 63% of the countrys raw cocoa is produced.

    The value added chain in cocoa is a priority area for the government with the target of $6.25 billion USD in export value by 2025.

    The target of 1 million MET annual output over the period 2013-2014 requires investments and meet Agriculture Cocoa*

  • Agriculture Cocoas worldwide production*

  • Cocoa is a priority area for the government as stated in Presidential Decree No. 28/2008. In order to incentivize investment into the downstream cocoa industry, a progressive tax was introduced in April 2010 that increases in line with global prices for raw cocoa beans under Ministry of Finance Decree No. 67/2010.

    Incentives for investors include expected revisions to Government Regulation Number 62/2008 on income tax facilities, which will soon cover cocoa.

    Other incentives include the exemption of import tax on machinery and capital goods needed for production as well as exemption of VAT on cocoa beans.Agriculture Cocoas government incentives*

  • Energy Sector Snapshot

    Contribution to GDP:1