ISSN 0853-2086

INDONESIAN COMMERCIAL NEWSLETTER

MONTHLY REPORT

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

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
 List of Content
INDONESIAN COMMERCIAL NEWSLETTER
MARCH 2009

¾ 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

¾ 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

¾ 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

¾ 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

¾ 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

March 2009 - Indonesian Commercial Newsletter i

 List of Content
¾ 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

¾ 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

¾ 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

¾ 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

¾ 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

¾ APPENDICES:
Directory of Banking companies in Indonesia .............................................................. 74

¾ ECONOMIC INDICATOR:
Economic Indicators.................................................................................................................... 76
Export and import........................................................................................................................ 77
Gross Domestic Product............................................................................................................. 78
Oil Price and Foreign Exchange .................................................................................................79
The Indonesian Economic Trends ............................................................................... 80
* * *

ii Indonesian Commercial Newsletter - March 2009

 FOCUS

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)

Income % Net profit %

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

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.

Indonesian Commercial Newsletter –March 2009 1

 Focus

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

2 Indonesian Commercial Newsletter – March 2009

 Focus

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 Profit
2008 2007 2008 2007) 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%

Indonesian Commercial Newsletter – March 2009 3

 Focus

Table 4 – cont’d
Income Profit/Loss
Issuers/sector Profit
2008 2007 2008 2007) 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

4 Indonesian Commercial Newsletter – March 2009

 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**

Indonesian Commercial Newsletter – March 2009 5

 INDUSTRY PROFILE

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.

6 Indonesian Commercial Newsletter - March 2009

 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
Enam
Bare Bare Telecom Fiber Sp.
XLPE XLPE XLPE PVC Cu Al -eled Others
Copper Alu Cable Optic Cable
HV MV LV LV Rod Rod Wire
Cond Cond

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

Indonesian Commercial Newsletter – March 2009 7

 Industry Profile

Table 1 – cont’d
Electric cable
Enam
Bare Bare Telecom Fiber Sp.
XLPE XLPE XLPE PVC Cu Al -eled Others
Copper Alu Cable Optic Cable
HV MV LV LV Rod Rod Wire
Cond Cond

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

8 Indonesian Commercial Newsletter – March 2009

 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
2X
Helix ( following F or R)
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.

Indonesian Commercial Newsletter – March 2009 9

 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- N2XK2Y/NA2XK2Y N2XK2Y/NA2XK2Y
110,BCC-Hard 150 KV 150 KV
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

Cable specification Rated Voltage : 1,8/3 IEC 840

kv up to 18/30 kv
Cable content Bare Copper SPLN 43-5/IEC 502 Copper / Aluminum
Conductor Half Single Core Power conductor, XLPE
Hard Or Hard Cable, Copper Or Insulated, Lead
Used For Aluminum sheathed, PE
Overhead Conductor, XLPE Sheathed Cable
Transmission & Insulated, With Or
Distribution 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
Telecommunication
Cable type Cable specification Cable content
Cable
R-V (Pe)V INDOOR SCREEN Copper Conductor,
CABLES PVC insulated,
SII 0710 Aluminum tape
screened, PVC
sheathed. Used for
indoor installation
and telephone.

Source : Sucaco

10 Indonesian Commercial Newsletter – March 2009

 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

XPLE for isolation of electric cable Min. decision
1 SNI 04-2697-1992
with voltage of 1 kV to 30 kV 407/M/SK/10/1980
PVC isolated wire , voltage of
2 SNI 04-2698-1999
450/750 Volt (NYA)
Isolated cable and sheathed with
3 SNI 04-2699-1999 PVC with voltage of 300/500 volt
(NYM)
Isolated ground cable and sheathed
with PVC protected with steel wire or
4 SNI 04-2700-1999 aluminum 0.6/1 kV
(NYFGbY/NAYFGbY/NYRGbY/NYRY
/NA YRY)
Isolated ground cable and sheathed
5 SNI 04-2701-1999 with PVC with voltage of 0.6/1 kV
(NYY/NAYY)
Isolated ground cable and sheathed
with PVC protected with steel or
6 SNI 04-6122-1999
aluminum wires with voltage of
0,6/1 kV (NYBY/NAYBY)
Flexible cable isolated and sheathed Min. decision
7 SNI 04-3234-1992 with PVC with voltage of 500 V 74/M/SK/2/1988
(NYMHY)
Flexible cable isolated and sheathed
8 SNI 04-3235-1992 with PVC with nominal voltage of
500 V (NYMHY Oval)

Indonesian Commercial Newsletter – March 2009 11

 Industry Profile

Table 4 – cont’d
No Standard Title Remarks
Flexible wire isolated with PVC with
9 SNI 04-3236-1992
nominal voltage of 1000 V (NYAF)
Flexible cable twins and triplets
10 SNI 04-3237-1992 isolated with PVC for working voltage
of up to 380 V (NYY/NYD)
Flexible cable twins to triplets to
quintuplets isolated , sheathed with
11 SNI 04-3238-1992
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
Production capacity
Types of cable
(ton/ year)
• Telecommunication Cable 132,900
• Power Cable 258,650
• Special Cable 43,150
• Enameled Wire 8,800
TOTAL 445,090
Source: Apkabel

12 Indonesian Commercial Newsletter – March 2009

 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

Production
Companies Status capacity Investment
(ton/year)
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 PMDN
29,750 Rp. 162,193,790,000
PT GT KABEL INDONESIA) TBK
PT. SUPREME CABLE PMDN
MANUFACTURING CORPORATION 25,200 Rp. 205,583,400,000
TBK
PMDN
PT. KABELINDO MURNI TBK 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

Indonesian Commercial Newsletter – March 2009 13

 Industry Profile

Table 6 – cont’d
Production
Companies Status capacity Investment
(ton/year)
PT PRYSMIAN CABLE INDONESIA PMA
(Formerly PT. PIRELLI CABEL 15,200 US$ 67,300,000
INDUSTRI )
PMDN
PT. JEMBO CABLE COMPANY TBK 15,195 Rp.
34,627,000,000
PT. BICC BERCA CABLES PMA 10,000 US$ 35,198,000
Non
PT. JAYAKO MURNI ABADI 8,400 Rp. 5,330,000,000
Facility
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

Production Growth
Year
(ton) (%)
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

14 Indonesian Commercial Newsletter – March 2009

 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.

Indonesian Commercial Newsletter – March 2009 15

 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.

16 Indonesian Commercial Newsletter – March 2009

 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.

Indonesian Commercial Newsletter – March 2009 17

 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 Net Profit
(Rp million)
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.

18 Indonesian Commercial Newsletter – March 2009

 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
Growth Growth
(Tons) 000 US$
(%) (%)
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
Winding wire of copper,
8544.11.0010 laquered/enamelled 355
2,731
Winding wire of copper, cover with
8544.11.0020 paper textile material/pvc 14,719
70,262

Indonesian Commercial Newsletter – March 2009 19

 Industry Profile

Table 10 – cont’d
HS Description 2004 2005 2006 2007
Winding wire of copper,
laquer/enamelled & cover with
8544.11.0030 paper, textile material/pvc 165
1,404
Winding wire of copper, rect
cross-sect. and without
8544.11.0040 connectors 10
617
8544.11.0090 Other winding wire of copper 70
966
Rectangular winding wire of
8544.11.110 copper 233 1,269
1,288 7,610
Winding wire of copper in other
8544.11.190 forms 96 -
1,187 -
Winding wire of copper covered
8544.11.200 with Textile 57 4,675 5,040
179 14,372 23,118
Winding wire of copper insulated
8544.11.300 with PVC 830 290 27
1,235 868 207
Winding wire of copper of oth,
rectang. Cross-section & without
8544.11.4000 connector 1 1
8 3
8544.11.9000 Winding wire of copper of oth 7,384 7,898
17,583 19,210
Rectangular winding wire of other,
8544.11.910 cover with paper 600
1,598
8544.11.990 Other winding wire 9,030
20,654
Winding Wire not of copper of
8544.19.1000 laquered/enameled 69 107
389 492
Inding wire not of copper of
8544.19.2000 manganese resistance wire 1 1
2 2
8544.19.300 Manganese resistance wire 1
1
Winding wire of other than copper
8544.19.900 of other type 63 25 961 241
573 166 6,137 1,792
Co-axial cable fitted with
8544.20.100 connectors 10,376 5,901 12,105 5,220
116,701 85,131 157,107 92,566
Insult cables cot fitted with conec.,
8544.20.2000 fo ra voltage <=66.000 volts 182 446 91
939 1,973 626

20 Indonesian Commercial Newsletter – March 2009

 Industry Profile

Table 10 – cont’d
HS Description 2004 2005 2006 2007
Co-axial cable not fitted with
8544.20.210 Connectors insulated with PVC 246
1,245
Other co-axial cable not fitted with
8544.20.290 Connectors 23
123
Insul.cables not fitted with
8544.20.3000 connec., fo ra voltage>66.000 volt 1 21 1
2 208 2
Insulated cables not fitted with
connectors, for a voltage >66.000
8544.20.4000 volt 26
88
Wiring harnesses for motor
8544.30.1000 vehicles 10,534 14,799 20,831
134,831 200,303 338,094
8544.30.9000 Wiring harnesses for aircraft/ship 4,522 2,406 2,356
52,803 38,644 32,096
Elect. Conductor for a voltage <
8544.41.000 80 V fitted with connector 861
3,869
Telephone cables, submarine
8544.41.1100 fitted with conectors 7 182
516 1,637
Telephone cables, oth than
8544.41.1200 submarine fitted with conectors 142 1,207
658 5,133
Oth plastic insulated electric cable
having cross sect<=30mm fitt w
8544.41.1500 co 1
16
Oth elec.conduc o than
8544.41.11-15 fitted with
8544.41.1900 connectors 666 58
1,556 620
Plastic insul. Electric cable having
8544.41.9100 cross section<=30mm fitt w co 3 14
148 495
Plastic insulated electric
8544.41.9300 conductors fitted connectors 2
54
Controlling cables fitted with
8544.41.9400 connectors 1
18
oth electris conductor oth than
8544.41.9900 8544.41.91-95 fitted connectors 233 158
10,247 2,962
Telephone, telegraph, radio relay
cable submarine, for
8544.42.1100 communication, <=8V 55
2,224

Indonesian Commercial Newsletter – March 2009 21

 Industry Profile

Table 10 – cont’d
HS Description 2004 2005 2006 2007
Other fitted with connectors for
8544.42.1900 telecommunication, voltage <=8V 401
1,620
Fitted with connectors for
telecommunication voltage
8544.42.2000 >8V&<=1V 12
28
Oth fitted with conector, for
8544.42.9000 voltage <=1 volts 1,908
14,794
Elect. Conductor for a voltage <
8544.49.1100 80 V insulated with PVC 2,209 585 868 235
17,506 9,180 19,385 8,224
Telep.teleg & radio relay cables,
8544.49.1200 oth than submarine not fitt with 89 74
264 314
Other cable for electrical
8544.49.1900 conductor for a voltage < 80 V 433 482 147 823
4,861 10,178 5,395 12,715
Shielded wire for mnfact. Of auto-
wiring harnesses, not for
8544.49.2100 communication, <=8V 1,967
16,543
Oth fitted with connectors, <=80V,
not for used for
8544.49.2900 telecommunications 213
4,442
Telephone, telegraph, radio relay
cable submarine, for
8544.49.3100 communication, >8V & <=1V 2
14
Oth fitted with connectors for
telecommunication, voltage > 8V
8544.49.3900 and < 1V 25,277
158,756
Other fitted with connectors, >
80V & <= 1V of a kind not used
8544.49.4000 for telecom 115
4,030
Other elect. Conductor for voltage
8544.49.910 < 80 V insulated with PVC 1 66 81
37 408 614
Shielded wire of kind used in the
8544.49.9500 mfd of auto wiring harns not fit w 1
2
Other electric conductor < 80 V
8544.49.990 insulated with other materials 172 2,966 2,299
1,043 20,728 22,786
Elect. Conductor of 80 V < Volt <
8544.51.000 1000 V with fitted connectors 11,330
34,082

22 Indonesian Commercial Newsletter – March 2009

 Industry Profile
Table 10 – cont’d
HS Description 2004 2005 2006 2007
Teleph.teleg & radio relay cables,
submarine fitted with connec for
8544.51.1100 80v<volt< 1,390 497
4,501 2,419
Teleph, telegrap & radio relay
cables, oth than submarine fit w
8544.51.1200 conn for 80 V < V 174
466
oth elec conduc oth than
8544.51.11-12 fitt with connec for
8544.51.1900 80 V < V 484 8
2,232 62
Plastic insult. Elec. Cable having
a cross sec<=300mm fitt w conn
8544.51.9100 for 80V<V=1000V 3,865 3,477
12,587 14,696
Plastic insul. Elec. Cable having a
cross sec > 300 mm fitt w conn for
8544.51.9200 80 V < V < 5 16
13 63
Controlling cables fitted with
connectors for
8544.51.9400 80V<Voltage<=1,000V 1
1
Oth elec conduc o than
8544.51.91-94 fitted with connec
8544.51.9900 for 80V<Volt<= 482 850
3,718 22,860
Elect. Conductor of 80 V < Volt <
8544.59.110 1000 V insulated with PVC 220 156 5,700
429 449 25,646
Telp. Teleg. & rad relay cab, o.
thn submarine not fitted with conn
8544.59.1200 for 80 V<V< 125 995
385 6,625
Other cable for electric conductor
8544.59.190 of 80 V < Volt < 1000 V 19,973 23,539 18,237
54,298 87,282 111,787
Other electric conductor of 80 V <
8544.59.910 Volt < 1000 V insulated with PVC 119
277
Plastic insulated elec. Cable
having cross sec > 300 mm &
8544.59.9200 80V<Voltage<=1000 14
55
Controlling cables not fitted with
connectors for
8544.59.9400 80V<Voltage<=1000V 1
4
Other elect. Conductor 80V < Volt
8544.59.990 < 1000V 1,090 1,286 806
3,510 3,995 3,800

Indonesian Commercial Newsletter – March 2009 23

 Industry Profile

Table 10 – cont’d
HS Description 2004 2005 2006 2007
Other electric conductors, for a
8544.60.000 voltage exceeding 1000 V 7,593 33,056
17,017 130,103
Plastic insulated elec. Cable
having cross sec<= 400 mm for 1
8544.60.1100 KV<Volt<=36 K 5,134 6,829
18,689 34,708
Plastic insulated elec. Cable
having cross sec<400 mm for 1
8544.60.1900 KV<Volt<=36 K 8 1
25 13
Plastic insulated elec. Cable
having cross sec <= 4mm for 36
8544.60.2100 KV<volt<=66KV 94
114
Plastic insulated elec. Cable
having cross sec>400 mm for
8544.60.2900 Voltage>66 K 1 773
3 3,752
Other electric conductors, for a
8544.60.3000 voltage >66 KV 135
700
Plastic insulated elec. Cable
having cross sec>400 mm for
8544.60.3900 Voltage>66 K 1
1
Teleph, Telegraph, Radio relay
cables, oth than submarine for
8544.60.9200 voltage>1KV 347
1,810
Oth electric conductors oth than
8544.60.9900 8544.60.91-92 for voltage >1 Kv 53 1
106 1
8544.70.000 Optical Fibre Cables 1,269
5,988
Optical Fibre Cables Teleph,
telegraph & Radio relay Cables,
8544.70.1000 oth than submarine 114 59 22
473 859 207
Optical Fibre Cables Teleph,
telegraph & Radio relay Cables
8544.70.2000 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

24 Indonesian Commercial Newsletter – March 2009

 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

Volume Value
Year
(Tons) (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.

Indonesian Commercial Newsletter – March 2009 25

 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

26 Indonesian Commercial Newsletter – March 2009

 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

Projected consumption
Year
(‘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.

Indonesian Commercial Newsletter – March 2009 27

 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**

28 Indonesian Commercial Newsletter – March 2009

 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.

Indonesian Commercial Newsletter – March 2009 29

 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

Prod. capacity
Types of cable
(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

30 Indonesian Commercial Newsletter – March 2009

 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

Indonesian Commercial Newsletter – March 2009 31

 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.

32 Indonesian Commercial Newsletter – March 2009

 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 1,126,782 1,293,677
equity

Profit & loss

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

**R**

Indonesian Commercial Newsletter – March 2009 33

 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

Production capacity Number of

Industry
(tons/year) 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.

34 Indonesian Commercial Newsletter – March 2009

 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.

Indonesian Commercial Newsletter – March 2009 35

 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

Production capacity
Producers Location
(tons/year)
PT. Tembaga Mulia Semanan, Tbk 48,000 Jakarta
PT. IKI Indah Kabel Indonesia / 33,000 Tangerang
PT. Sumi Indo Kabel, Tbk
PT. GT Kabel Metal Indonesia 15,000 Jakarta
PT. Phenolic Prima Indonesia 5,600 Jakarta

36 Indonesian Commercial Newsletter – March 2009

 Industry

Table 2 – cont’d
Production capacity
Producers Location
(tons/year)

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
Production capacity
Producers Location
(tons/year)
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.

Indonesian Commercial Newsletter – March 2009 37

 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

Production capacity
Producers Location
(tons/year)
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

38 Indonesian Commercial Newsletter – March 2009

 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

Production capacity
Producers Location
(tons/year)
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

Indonesian Commercial Newsletter – March 2009 39

 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.

* * df * *

40 Indonesian Commercial Newsletter – March 2009

 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).

Indonesian Commercial Newsletter – March 2009 41

 Industry

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

Production
Status of
Name of companies capacity
companies
(km/y)
PT. Supreme Cable Manufacturing
PMDN 16,250
Corporation Tbk (SUCACO)
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.

42 Indonesian Commercial Newsletter – March 2009

 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

Sales value Growth

Year
(Rp billion) (%)
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

Indonesian Commercial Newsletter – March 2009 43

 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

44 Indonesian Commercial Newsletter – March 2009

 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

Production Growth
Year
(tons ) (%)
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

Indonesian Commercial Newsletter – March 2009 45

 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

Exports Growth Value

Year
(tons ) (%) (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.

46 Indonesian Commercial Newsletter – March 2009

 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.

* * df * *

Indonesian Commercial Newsletter – March 2009 47

 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.

48 Indonesian Commercial Newsletter – March 2009

 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
Types of power Capacity
Owners Composition
plants (MW)
PLN Coal PLTU 5,306
PLTP 665
PLTGU 1,065
PLTA 300
Sub total 7,336 65.8%
IPP Coal PLTU 2,338
PLTP 1,470
Sub 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
Type of power Capacity Composition
Description
plants (MW) (%)
Java-Bali system Coal PLTU 5,000
PLTP 1,145
PLTGU 825
Sub total 6,970 100%

Indonesian Commercial Newsletter – March 2009 49

 Energy

Table 2 – cont’d
Type of power Capacity Composition
Description
plants (MW) (%)
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.

50 Indonesian Commercial Newsletter – March 2009

 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
Name of project Capacity
plant
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

Indonesian Commercial Newsletter – March 2009 51

 Energy

Table 3 – cont’d
Locations/types of power
Name of project Capacity
plant
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

52 Indonesian Commercial Newsletter – March 2009

 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
Capacity Capex
Name of power plants Type
(MW) (US$ million)
JAVA - BALI
Muara Tawar PLTGU 1 x 825 792.0
Cilacap Baru PLTU 2 x 1000 2,820.0
Indramayu Baru PLTU 1 x 1000 1,410.0
Total Java Bali 3,825 5,022.0
Outside Java – Bali
Parit Baru PLTU 2 x 25 159.0
PLTU Kalsel baru PLTU 2 x 100 302.8
PLTU Kaltim baru PLTU 2 x 100 302.8
Muara Jawa PLTU 2 x 100 302.8
Takalar PLTU 2 x 100 454.2

Indonesian Commercial Newsletter – March 2009 53

 Energy

Table 4 – cont’d
Capacity Capex
Name of power plants Type
(MW) (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 2x5
Masohi PLTU 2x5
Tual PLTU 2x5
Sumbawa PLTU 2 x 10
Merauke PLTU 2 x 10
Kolaka PLTU 2 x 10
Sorong PLTU 2 x 15
Biak PLTU 2x7
Manokwari PLTU 2x7
Timika PLTU 2x7
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 2x5 14.0
Lailena PLTP 2 x 10 28.0
Bituang PLTP 2x5 14.0
Mataloko PLTP 2x5 14.0
Sembalun PLTP 2 x 10 28.0
Huu PLTP 2x5 14.0
Tulehu PLTP 2x5 28.0
Total Outside Java-Bali 3,307 4,902.3
Total Indonesia 7,132 9,924.3
Source : PLN

54 Indonesian Commercial Newsletter – March 2009

 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.

Indonesian Commercial Newsletter – March 2009 55

 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.

56 Indonesian Commercial Newsletter – March 2009

 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 1.574
500 kV DC - - - - - -
275 kV - 2.152 - - 1.941 4.093
150 kV 5.774 6.613 3.571 3.666 1.272 2.896
70 kV 80 852 230 90 - 1.252
Total 9.813
Source : 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.

Indonesian Commercial Newsletter – March 2009 57

 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
Budget
Activities Location (Rp Workers
billion)
Construction of power plants
and transmission network NTT, NTB and
230 4,500
(Ikitring Java, Bali and Nusa West Java
Tenggara )
Construction of main network
South Sulawesi ,
and main power relay stations
North Sulawesi and 195 2,850
(Ikitring Sulawesi, Maluku and
Gorontalo
Papua)
Rural energy project
Spread in 79
(Electricity and energy 75 7,600
village
utilization director general)
Total 500 14,950
Source : ESDM
****

58 Indonesian Commercial Newsletter – March 2009

 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

Length of network
Players Coverage
(km)
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 250 Jakarta, Karawang,
Nusantara (Biznet) Tangerang, Bogor,
Bandung, Surabaya,
Powertel 141 Jakarta – Cikampek –
Bandung, Tanah Abang –
Ged. Cyber - Serpong
Source: Data Consult

Indonesian Commercial Newsletter – March 2009 59

 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.

60 Indonesian Commercial Newsletter – March 2009

 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

Indonesian Commercial Newsletter – March 2009 61

 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

Length Network Vendors of Value

Operator Projects Year
(km) vendor fiber optic (US $ million)
Telkom Installation of NEC PT. Jembo 2008
Fiber Optic RMJ Cable
SKSO cable of Company,
Package III Tbk
Kalimantan
'JaKa2LaDeMa' 3,139 Fujitsu 2009
and 110
NSW
Jasuka (Java – 2,999
Sumatra – 52
Kalimantan)
Telkom – Dumai – Melaka 150 NEC - 2005
Telekom Cable System 9,3
(Malaysia) (DMCS)
Telkom High Performance 2,000 Siemens
Back Bone (HPBB) - Pirelly 65
Sumatra
Indosat Sea cable 1,300 NEC - 2008 -
communications 2009
system (SKKL)
Jakabare (Java,
Kalimantan,
Batam, Singapore)

Icon+ Procurement of PT. Voksel 2007

conductor and
fiber optic project
Excelcomindo 550 Alcatel 2008 -
31
Lucent 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.

62 Indonesian Commercial Newsletter – March 2009

 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 .

Indonesian Commercial Newsletter – March 2009 63

 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 * *

64 Indonesian Commercial Newsletter – March 2009

 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.

Indonesian Commercial Newsletter – March 2009 65

 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

Power generating
Description Investment
plants to be built
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

66 Indonesian Commercial Newsletter – March 2009

 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

Indonesian Commercial Newsletter – March 2009 67

 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.

68 Indonesian Commercial Newsletter – March 2009

 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**

Indonesian Commercial Newsletter – March 2009 69

 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.

70 Indonesian Commercial Newsletter – March 2009

 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 .

Indonesian Commercial Newsletter – March 2009 71

 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

72 Indonesian Commercial Newsletter – March 2009

 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.

***

Indonesian Commercial Newsletter – March 2009 73

 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)

74 Indonesian Commercial Newsletter – March 2009

 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

* * *

Indonesian Commercial Newsletter – March 2009 75

 Appendices

1. ECONOMIC INDICATORS

Indonesia’s inflation by Group of Commodities,

2005– 2009*) (2002=100)
Year/ Food Prepared Housing, Cloth- Medi- Education, Trans- Gene
Food, Water, ing cal port, ral
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 17.11
2006 12.94 6.36 4.83 6.84 5.87 8.13 1.02 6.60
2007 11.26 6.41 4.88 8.42 4.31 8.83 1.25 6.59
2008 16.35 12.53 10.92 7.33 7.96 6.66 7.49 11.06
2009
Jan. 0.76 0.95 -0.06 0.55 0.37 0.12 -2.53 -0.07
Feb. 0,95 0,91 0,28 2,85 0,17 0,04 -2,43 0.21
March
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 -0.07
February 0.58 0.62 0.65 0.21
March 0.03 0.24 0.95
April 0.05 -0.16 0.57
May 0.37 0.10 1.41
June 0.45 0.23 2.46
July 0.45 0.72 1.37
August 0.33 0.75 0.51
Sept. 0.38 0.80 0,97
Oct. 0.86 0.79 0,45
Nov. 0.34 0.18 0.12
Dec. 1.21 1.10 -0.04
Inflation rate 6.60 6.59 11.06
Source: BPS (Central Bureau of Statistic)

76 Indonesian Commercial Newsletter – March 2009

 Appendices

2. EXPORT AND IMPORT

Indonesia's Export Development, 2006 – 2009

FOB value (US$ million)

% Growth Jan
Jan-Des Jan
Descriptions 2006 2007 2009 over 2008
2008 2009
Total Exports 100,799 114,023 136,761 7,153 -36.08
Oil & Gas 21,209 22,081 28,958 947 -57.79
Crude Oil 8,168 9,226 12,418 373 -55.15
Oil Products 2,843 2,871 3,379 71 -93.65
Gas 10,197 9,983 13,160 502 74.95
Non Oil and
Gas 79,589 91,942 107,803 6,206 -30.64
Agriculture 3,365 3,937 4,937 292 -8.24
Manufacturing 65,024 75,925 88,044 4,907 -35.52
Mining &
11,200.4 12,075 14,821 1,007 -1.24
others
Source: BPS (Central Bureau of Statistic)

Indonesia's Import Development, 2006 – 2009

CIF value (US$ million)

% Growth Jan.
Des Jan 2009 over Jan.
Descriptions 2006 2007
2008*) 2009*) 2008

Total Import 61,065.5 74,402.7 7,699.9 6,342.6 -33.99

Oil & Gas 18,962.9 21,879.6 983.3 1,043.4 -45.61
Crude Oil 7,852.6 9,056.7 458.4 257.4 -69.35
Oil Products 11,080.3 12,733.7 498.8 737.0 -31.66
Gas 30.0 89.2 26.1 49.0 48,900.00
Non Oil and
Gas 42,102.6 52,523.1 6,716.6 5,299.2 -31,09
Consumption
4,738.2 6,624.1 499.1 477.9 -26.30
Goods
Raw Materials/
47,171.4 56,527.3 5,007.5 4,535.8 -38.33
Auxiliary Goods
Capital Goods 9,155.9 11,251.3 2,193.3 1,328.9 -17.21
Source: BPS (Central Bureau of Statistic)

* * *

Indonesian Commercial Newsletter – March 2009 77

 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 254.4 262.4 271.6 284.3
and Fishery
Mining and Quarrying 162.6 168.0 171.4 172.3
Manufacturing Industry 491.7 514.1 538.1 557.8
Electricity, Gas and Water Supply 11.6 12.3 13.5 15.0
Construction 103.4 112.2 121.9 130.8
Trade, Hotel, and Restaurant 294.4 312.5 338.9 363.3
Transport and Communication 109.4 125.0 142.9 166.1
Financial, Ownership & Business 162.0 170.1 183.7 198.8
Services
Services 160.0 170.7 182.0 193.7
GDP 1,749.5 1,847.3 1,964.0 2,082.1
GDP 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 3.9 3.2 5.0 5.3
Expenditure
Government Consumption 8.1 9.6 3.9 10.4
Expend.
Gross Domestic Fixed Capt. 9.9 2.9 9.2 11.7
Formation
Export of goods and services 8.6 9.2 8.0 9.5
Import of goods & services 12.3 7.6 8.9 10.0
GDP 5.6 5.5 6.3 6.1
Source: BPS (Central Bureau of Statistic)
*) January – September 2007

* * *

78 Indonesian Commercial Newsletter – March 2009

 Appendices

4. OIL PRICE AND FOREIGN EXCHANGE

OIL PRICES
ITEM Market Latest 1 month 3 months One year
Date Price ago Ago Ago
CRUDE OIL PRICE
(US$/Barrel)
- Sumatran Light 1) Tokyo 3/31/2009 41.89 57.61 71.41 53.22
- Arabian Light 2) Europe 3/31/2009 38.53 62.78 123.42 56.46
- Arabian Heavy 2) Europe 3/31/2009 35.85 59.97 127.88 59.10
- Brent 2) Europe 3/31/2009 37.94 64.38 121.27 66.27
- W. Texas 2) - 3/31/2009 43.06 69.87 114.59 67.35
REFINED PRODUCT
(US$/Gallon)
- Fuel Oil 2) New York 3/31/2009 .4570 .4972 .4965 .5642
- Gasoline, New York 3/31/2009 .4241 .4446 .4237 .4440
Premium 3)
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 * * *

Indonesian Commercial Newsletter – March 2009 79

 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 1,850
2. 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 7.67
b. 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

* * *

80 Indonesian Commercial Newsletter – March 2009

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