Category: Goverment

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Profit of State-Owned Enterprises in 2021 Reaches Rp126 Trillion, BRI Becomes the Biggest Contributor

PT Bank Rakyat Indonesia (Persero) Tbk will be the biggest profit contributor for the Ministry of State-Owned Enterprises (BUMN) in 2021. It is recorded that in 2021 the SOE’s profit will reach Rp126 trillion or an increase of Rp13 trillion from 2020. BRI President Director, Sunarso said BRI became a BUMN that recorded the highest profit of Rp32.22 trillion in 2021, or equivalent to 25.5% of the total profit of all SOEs in 2021. This growth was due to the state-owned company carrying out a number of transformations.
One of the pillars of BRI’s 2021 profit, namely credit performance and the collection of Third Party Funds (DPK) grew positively accompanied by a significant decrease in interest costs. At the same time, the company is able to manage portfolio mix and asset quality so as to increase asset yields. From 2019 to 2021 BRI has paid taxes and dividends to the state with a total amount of Rp82.03 trillion.
For 2022, Sunarso explained that his party already has four strategies so that BRI’s growth can continue to be positive. One of them is selective growth, BRI focuses on sectors that have high potential with minimum exposure to external shocks, namely the agricultural sector, chemical industry, and food and beverage.
Focus on quality and be selective in determining the feasibility of restructuring customers by carrying out a number of considerations. BRI will implement a soft landing strategy by establishing sufficient reserves to anticipate a deterioration in the credit quality of restructuring customers. Meanwhile, to maintain profitability, BRI will focus on high-yield loans, namely the micro and consumer loan segments as well as increasing efficiency through increasing low-cost funds (CASA).

June 11, 2022, DetikFinance
(https://finance.detik.com/moneter/d-6122233/laba-bumn-di-2021-tembus-rp-126-triliun-bri-jadi-penyumbang-terbesar)

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LG Invests in Upstream to Downstream Electric Vehicles, Jokowi: First in the World

LG Energy Solution built an Electronic Vehicle (EV) battery factory in the Batang Integrated Industrial Estate (KIT), Central Java. The investment value is estimated at US$ 9.8 billion or Rp142 trillion. This investment is a form of cooperation between the LG consortium and the IBC BUMN consortium, which consists of LG Energy Solution, LG Chem, Huayou, LX International, Posco, Mind ID, Antam, Pertamina Power, and PLN. President Joko Widodo (Jokowi) said that this investment was the first upstream to downstream investment in the world.
“LG’s investment is the first investment in the world that integrates the production of electric vehicles from upstream to downstream,” said Jokowi at KIT Batang, Wednesday (8/6/2022).
Nickel as the main raw material for electric batteries is mined in Halmahera, Maluku. Meanwhile, the industrial location, purification, and cathode production are at KIT Batang. This is what he calls downstream, which is spread over the territory of Indonesia. President Joko Widodo appreciated LG’s investment in Indonesia. This is because it creates jobs for up to 20,000 people. This large-scale project can support the production of 3.5 million units of electric vehicle batteries with a potential of up to 200 GWh/year. He added that a battery factory is being built in Karawang and an electric car factory in Cikarang, West Java.
Minister of Investment/Investment Coordinating Agency (BKPM) Bahlil Lahadalia said the economic impact of this investment reached US$ 5.6 billion or Rp80.6 trillion (exchange rate of Rp14,400) annually. President of LG Energy Solutions Lee Bang Soo called this investment an important key to national development. He hopes this EV factory will become one of the most important in Southeast Asia in the future. LG is collaborating with the State Electricity Company (PLN) on the project. This project will contribute to the global secondary battery industry in the next 26 years.

June 08, 2022, DetikFinance
(https://finance.detik.com/industri/d-6116340/lg-investasi-kendaraan-listrik-hulu-ke-hilir-jokowi-pertama-di-dunia)
(https://finance.detik.com/industri/d-6122732/lg-dan-bumn-punya-proyek-raksasa-rp-142-triliun-ini-rinciannya)

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Kalbe Farma to Open Business Unit in the Philippines

Indonesian pharmaceutical producer PT Kalbe Farma said on Friday it would establish a business unit in the Philippines to expand its global market reach. Kalbe Farma, through subsidiary Kalbe International Pte. Ltd, signed on May 17 a deal with the Philippines’ Ecossential Foods Corp (ECO) to form a joint venture firm to market all products, apart from prescription drugs, in the country. ECO specializes in the distribution of fast-moving consumer goods. The two companies are still in the process of establishing the joint venture, publicly listed Kalbe said in a filing with the Indonesia Stock Exchange (IDX).
“The Philippines has strong market potential for Kalbe Farma,” said the company.
Kalbe Farma will own 60 percent of the joint venture firm and ECO the remaining 40 percent. The two firms plan to inject 130 million Philippine pesos (US$2.48 million) in initial capital. Kalbe will finance its share using cash. The joint venture is part of Kalbe’s plan to strengthen its foreign market presence this year, specifically in Myanmar, the Philippines, Sri Lanka, Nigeria, Malaysia, and Cambodia, as it seeks to raise the contribution of exports to between 5 and 6 percent of its total revenue, up from 4.8 percent last year.
The joint venture is part of Kalbe’s plan to strengthen its foreign market presence this year, specifically in Myanmar, the Philippines, Sri Lanka, Nigeria, Malaysia, and Cambodia, as it seeks to raise the contribution of exports to between 5 and 6 percent of its total revenue, up from 4.8 percent last year. Kalbe’s 2021 annual report showed that its most popular products in the Philippines included cereal bars of the Fitbar brand and the diabetic-friendly nutritional product line Diabetasol.
Kalbe is also in the process of establishing a subsidiary, Kalbe Philippines Inc. (KPI), that cost an advance fee of $200,000. The move was pending regulatory approval as of March 31, according to Kalbe’s latest financial report. Kalbe posted a 16.5 percent year-on-year increase in net profit to Rp835 billion in the first quarter of this year, as revenue rose 16.6 percent to Rp7.01 trillion.

May 30, 2022, The Jakarta Post
(https://www.thejakartapost.com/business/2022/05/30/kalbe-farma-to-open-business-unit-in-philippines.html)

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Jokowi Meets Elon Musk After Nickel Talks

President Joko “Jokowi” Widodo met Tesla Inc Chief Executive Elon Musk on Saturday in Texas to discuss potential investments and technology, Indonesia’s government said in a statement. The meeting between Musk and Jokowi came after a round of working-level discussions on a potential investment in Indonesia’s nickel industry and supply of batteries for electric vehicles, Indonesian officials told Reuters.
Representatives from Tesla were in Indonesia last week for meetings regarding a potential battery-related investment, Indonesian officials and two people familiar with the talks have said. Indonesia for years has been trying to secure a deal with Tesla on battery investment and potentially for Musk’s SpaceX aerospace company. Indonesia for years has been trying to secure a deal with Tesla on battery investment and potentially for Musk’s SpaceX aerospace company.
“There could be room for partnerships in many things because Indonesia has a lot of potentials”, Elon Musk said.
Indonesia has the world’s biggest nickel reserves, and Jokowi is keen to develop a nickel-based EV industry at home – from making nickel metal to producing battery components and assembling electric vehicles. In the past, he has also urged Musk to consider a rocket launch site in Indonesia. Two deals over the past month have given new momentum to Jokowi’s push to develop an EV-related industry at a time when global automakers have been scrambling to secure supplies of battery materials and reduce their reliance on China.
A consortium led by South Korea’s LG Energy Solution Ltd, the global No. 2 maker of EV batteries, announced plans last month to invest $9 billion in Indonesia as part of a deal that would include everything from nickel refining to producing battery cells in Indonesia. LG’s larger rival, China-based Contemporary Amperex Technology, a Tesla supplier, announced a $9 billion Indonesia investment in April.

May 15, 2022, TheJakartaPost
(https://www.thejakartapost.com/business/2022/05/15/jokowi-meets-elon-musk-after-nickel-talks.html)

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Jokowi Woos Investors in Meetings with US Congress, Businesses

President Joko Widodo met with United States officials and businesses ahead of the ASEAN-US Special Summit, trying to woo potential investors to Indonesia and the region while stressing the importance of ASEAN for peace and prosperity. Jokowi and several other ASEAN leaders met with US businesses at the Intercontinental Willard Hotel in Washington, DC.
The President told the business leaders that as the president of the Group of Twenty this year, Indonesia wanted to make sure that the upcoming G20 Summit could catalyze global economic recovery, especially for developing countries.
“This will need strong partnership between governments and business communities. I hope that CEOs of US companies can build concrete cooperation in the G20 with ASEAN, especially in Indonesia. Indonesia had potential in raw industries, green energy, as well as the digital economy, being one of the largest nickel-producing nations and the second-largest producer of stainless steel. Indonesia is also home to copper and bauxite as materials for aluminum, which could become the backbone for renewable energies such as lithium batteries and electric vehicles and other sources of green energy such as hydro, solar, and geothermal powers” Jokowi said.
“We are making sure to produce important commodities for environmentally friendly electricity generators. We invite American businesses to invest in Indonesia,” Jokowi said.

May 14, 2022, TheJakartaPost
(https://www.thejakartapost.com/indonesia/2022/05/14/jokowi-woos-investors-in-meetings-with-us-congress-businesses.html)

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Pertamina and Chevron Sign Cooperation of Rp146 Trillion

Minister of Investment/Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia revealed the investment value of the collaboration between PT Pertamina (Persero) and Chevron Corporation through its subsidiary, Chevron New Ventures Pte. Ltd. The total deal is worth US$ 10 billion or equivalent to Rp146 trillion (exchange rate of Rp14,600/US$). This investment is to encourage the optimization of Indonesia in promoting new and renewable energy.
“Geothermal is one of our mainstays that has been driven so far. Incidentally, Chevron and Pertamina have had good relations for decades. This will optimize the total investment of US$ 10 billion for the next 10 years,” he said at a press conference, quoted by Antara. from the Presidential Secretariat YouTube channel Friday (13/5/2022). Bahlil believes that if the agreement is carried out, then Indonesia’s goal to become the center of the downstream industry for new and renewable energy can be achieved.
For information, PT Pertamina (Persero) with its subsidiary Chevron Corporations, Chevron New Ventures Pte. Ltd. has signed a Memorandum of Understanding (MoU) to explore potential low-carbon business opportunities in Indonesia.

May 13, 2022, DetikFinance
(https://finance.detik.com/energi/d-6077075/bahlil-buka-bukaan-kerja-sama-pertamina–chevron-rp-146-triliun)

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Indonesia Ranks Third in ASEAN on Manufacturing PMI Uptick

The mood of the local manufacturing industry has improved slightly over the past month to rise above most other ASEAN countries, a report released on Thursday shows.
Indonesia’s manufacturing purchasing managers’ index (PMI) booked a monthly increase of 0.6 to 51.9 in April, while Thailand’s rose 0.1 to the same level, according to a report published by HIS Markit, a subsidiary of financial information firm S&P Global.
The two countries rank third among ASEAN states according to the latest manufacturing PMI. The report also shows that Indonesia’s rate of improvement was the fastest since January, which it attributes to increased economic activities as a result of relaxed COVID-19 restrictions. The report is based on a survey of manufacturing purchasing managers who were asked whether business conditions had improved or worsened over the past month on several indicators, including customer orders, supply deliveries, and employment levels.
Singapore and the Philippines top the list, with the former booking an astounding 3.1-point month-to-month (mtm) increase in its manufacturing PMI to 58.1, while the latter increased 1.1 points to 54.1. Meanwhile, Vietnam’s manufacturing PMI remained unchanged at 51.7 while Malaysia saw a 2- point mtm increase to 51.6. The overall manufacturing PMI for ASEAN grew 1.1 points to 52.8 in the seventh consecutive month of improving figures.

May 6, 2022, TheJakartaPost
(https://www.thejakartapost.com/business/2022/05/06/indonesia-ranks-third-in-asean-on-manufacturing-pmi-uptick.html)

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Palm Oil Board Confident Export Ban Could End in May

Indonesia should be able to tackle its cooking oil shortage in the next few weeks and lift an export ban on palm oil and its refined products in May, an industry body said on Thursday, a day after a last-minute policy U-turn sparked more alarm for markets. The world’s top palm oil producer expanded an export ban on raw materials for cooking oil to include shipments of crude palm oil and most of its refined products just hours before it took effect at midnight Wednesday, in an attempt to secure domestic supply and bring down soaring prices.

Sahat Sinaga, the senior official at the Indonesian Palm Oil Board, said that decision had shocked the industry, but that he was confident the supply issue could be resolved not long after the Muslim festival of Idul Fitri in early May. He added that a palm oil export target of 34 million tonnes in 2022 would be met. Asked about the timeline suggested by the palm oil board, Trade Ministry senior official Veri Anggrijono said “we are all hoping this can be solved quickly”.

A trade ministry regulation on Wednesday said the export policy would be reviewed monthly, or as often as needed, while Chief Economics Minister Airlangga Hartarto said it could be lifted when bulk cooking oil recedes to 14,000 rupiahs ($0.97) a liter nationwide. Previous measures to tame prices had failed due to distribution problems, not supply shortages at factories, Sinaga said. “It will be a great success. It won’t take long. After Eid, the market will be flooded,” he said.

Markets had shown relief when Indonesia’s chief economic minister said on Tuesday the ban would only cover refined, bleached, and deodorized (RBD) palm olein, but a day later authorities announced other products would be included. That had an immediate impact on global vegetable oil prices, sending palm oil futures in Malaysia up by 9.8 percent. The jitters spilled over into markets on Thursday as the ban took effect.

Trade Minister Muhammad Lutfi said the decision was taken after careful consideration and monitoring the cooking oil supply daily.  “I hope we all understand the urgency of this policy,” Lutfi said.

April 29, 2022, The Jakarta Post

(https://www.thejakartapost.com/business/2022/04/29/palm-oil-board-confident-export-ban-could-end-in-may.html)

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Best Stock Exchange in the Asia Pacific: IDX Composite

Indonesian financial market trading, including the stock market aka IDX Composite in April 2022 officially ended on Thursday (28/4/2022), wherefrom April 29 to May 6, 2022, JCI trading was closed due to Eid long holiday 1443 H. Throughout April this year, the IDX Composite recorded a fairly good performance, where the index of the country’s stock exchange rose to 2.23% point-to-point. In fact, the IDX Composite’s performance in April was the best in the Asia-Pacific region, where the majority recorded a correction. Only the IDX Composite and the Malaysian stock exchange (KLCI) recorded positive performances in April this year.   

            The IDX Composite’s bright streak in April this year was supported by net purchases by foreign investors, where foreigners continued to hunt for Indonesian stocks throughout this month, even though market sentiment continued to fluctuate. Throughout April this year, foreigners have been chasing Indonesian stocks up to Rp40.87 trillion in all markets, with details of Rp17.73 trillion in the regular market and Rp23.14 trillion in the cash market and negotiations.  

            Indeed, from its movement, the IDX Composite also tends to be volatile due to market sentiment which tends to fluctuate throughout April this year. However, the JCI has never touched the psychological level of 6,900 this month. Even in April this year, the IDX Composite still set a record high (all-time high/ATH), where the highest level of the IDX Composite is currently at 7,276.19, which was created on April 21.

April 29, 2022, CNBC Indonesia

(https://www.cnbcindonesia.com/market/20220429153647-17-336097/bursa-saham-terbaik-di-asia-pasifik-ihsg)

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Jokowi’s Target in 2023: Economy Grows 5.9%, Poverty Becomes 7.5%

The government of President Joko Widodo (Jokowi) has compiled a government work plan (RKP) for 2023 which contains economic targets and targets to development plans for next year. The theme of the RKP is “Increasing Productivity for an Inclusive and Sustainable Economic Transformation”.

Minister of National Development Planning/Head of Bappenas Suharso Monoarfa said “The development target in the initial draft RKP 2023 was economic growth of 5.3% to 5.9%,” in the 2022 National Development Planning Consultation (Musrenbangnas), Thursday (28/4/2022).

Indonesia’s poverty rate, which had risen due to the COVID-19 pandemic, is expected to fall again next year. At least it can reach the 7.5% level. Not only poverty, but the government also hopes that the open unemployment rate can drop to the level of 5.3%-6% in 2023. Currently, Indonesia’s open unemployment rate until August 2021 is 6.49%.

Another development target is the Gini ratio, which is expected to drop to 0.375 next year. And the Human Development Index headed to the level of 73.31. The government also plans to reduce greenhouse gas emissions to 27.02%. Meanwhile, the exchange rate for farmers is 103-105 and the exchange rate for fishermen is 106-107.

April 28, 2022, detikFinance

(https://finance.detik.com/berita-ekonomi-bisnis/d-6055167/target-jokowi-di-2023-ekonomi-tumbuh-59-kemiskinan-jadi-75)