Daily Business Briefing – Oct. 12

JAKARTA (TheInsiderStories) – Good morning; here we provide several pieces of important news that might help your business decisions today:

Sarulla Geothermal Second Unit Starts Operation

The second unit of the Sarulla Geothermal Power Plant in Tapanuli, North Sumatra, started commercial operation this week, thus increasing the plant’s total capacity to 220 megawatts. Further expansion is underway, which will eventually boost the plant’s capacity to 330 megawatts, by 2018. Inpex owns a 18.25 percent stake in the project. Other investors, Itochu Corporation and Kyushu Electric Power, each hold 25 percent, US-based Ormat Technologies commands 12.75 percent and PT Medco Power Indonesia has a 19 percent stake in the project. Sarulla will sell electricity to state utility firm Perusahaan Listrik Negara over a period of 30 years.

Trade Expo Indonesia Targets US$223 Million Transaction

Minister of Trade Affair Enggartiasto Lukita said Trade Expo Indonesia 2017 is expected to rake in trade contracts worth US$223.23 million, with potential large deals emerging from Nigeria, Arab Saudi, India, Pakistan, Bangladesh, Netherlands, Malaysia, Afganistan and Australia. In his opening speech, President Joko Widodo urged the Ministry of Trade to keep expanding into new non-traditional markets such as Africa, Eurasia, Middle East, South Asia, Turkey as well as Vietnam. During January-August 2017, Indonesian trade marked a $108.79 billion surplus, rising 17.58 per on an annual basis. Non-oil and gas trade account reached $98.76 billion, up 17.73 percent on an annual basis.

Government Prepares Rp400 Billion for Sky Toll Program

Transportation Minister Budi Karya Sumadi said the government has prepared Rp400 billion budget for the upcoming sky toll program. The funds will be used to build airport infrastructure such as runways and air traffic controllers in airports along the sky-toll route. The sky-toll program was introduced to reduce the price disparities of staple foods in Indonesia’s Eastern regions by up to 20 percent. It will also supply basic goods to cities that are located in elevated areas of Papua and Kalimantan. Three cities will be set as the center of the sky toll route, namely, Timika, Wamena, and Dekai: these will then provide staple needs to 12 other urban centers. The aircraft models that will be used include a Boeing 737 Freighter Conversion, Civilian Turbo Props, and Fokker 27 and 25.

OJK Sets Up 10 Key Policies

Indonesian Financial Services Regulator (OJK) has set up 10 key policy priorities for the period of 2017-2022. One is to optimize the use of information technology in overseeing industry players, in a bid to reform the non-bank financial sector and the capital markets. Chairman Wimboh Santoso said the purpose of these 10 policies is to reinforce the profile of his agency as independent and credible in overseeing and monitoring the financial services sector.

IDX May Exceed Target on New Listed Companies 

The Indonesia Stock Exchange (IDX) said the number of initial public offerings (IPO) this year has the potential to exceed the target of 35 companies. IDX Corporate Assessment Director Samsul Hidayat said there are already 26 companies that have listed their shares on IDX through an IPO mechanism. He noted that 80 percent of the companies that are still in process will be listed on the development board, while the rest are on the main board.

Blue Bird Obtains US$73 million loan

Taxi operator PT Blue Bird Tbk (IDX: BIRD) has obtained a 1-trillion-rupiah ($73 million) loan facility from Sumitomo Bank, it announced in a stock exchange filing on Wednesday (10/11). BIRD plans to use the facility for fleet expansion. In addition, the loan will also support the operational activities of BIRD and its subsidiaries, in support of business continuity of the company and its subsidiaries.

Indonesia Total Mutual Fund at US$29.6 billion in September

At the end of September 2017, total funds under management of mutual funds reached Rp401 trillion (US$29,6 billion), up from Rp 394 trillion at end of August. Overall, mutual fund managed funds grew by 22.13% year-to-date. In terms of percentage, the highest managed fund growth was achieved by money market mutual funds, which amounted to 82.51%. As of September 2017, the managed money market mutual fund has reached Rp53 trillion.

JICA Invited to Boost Manufacturing in East Java

Government invited Japan International Cooperation Agency (JICA) to boost manufacturing sector in East Java, through small and medium enterprises development. Director General of International Industrial Access (KPAII), Harjanto said, JICA has expressed the intention to improve the competitiveness of Indonesian industry. He said JICA has conducted a study focusing on three industrial sectors, namely automotive, electronics and food processing industries.