September 06th, 2007 - IFCCI -

Jakarta told to improve export support

Jakarta should improve its transportation system to maintain its significant role in the country's export activities and enhance its competitiveness in global trade, businesspeople say.
The capital plays a crucial role in service and trade activities, which are supported by the existence of Tanjung Priok Port in North Jakarta and Soekarno-Hatta Airport in Cengkareng, West Jakarta, said Jakarta Chamber of Commerce and Industry vice chairman Syafrizal.
"Jakarta has better infrastructure and facilities than other regions. While other regions develop their manufacturing industries, Jakarta is a hub for services and trades," he said in an interactive dialogue on Jakarta's role in the country's export activities Tuesday.

However, this means the city needs to seriously improve its transportation facilities, especially those at the Tanjung Priok Port, which has been the country's international trade hub since the era of Dutch occupation, he added.
The port, with a one-way narrow canal, has a limited capacity to accommodate large ships and the port roads are partly damaged, causing long truck queues that have to wait for hours to enter the storage area.
The Tanjung Priok port is currently "overloaded", Syafrizal said.
He said the situation had resulted in high transportation and distribution costs, making Indonesia less competitive compared to other countries in the global market.
"Transportation and distribution costs contribute around 18 percent to the price of manufacturing products and around 38 percent to the price of agricultural products here. In our neighboring countries, the costs only contribute between 8 and 12 percent to prices."
Indonesian Textile Association (API) chairman Benny Soetrisno agreed that high transportation and distribution costs in the country had hampered efforts to boost national exports.
He said the high costs were a result of the queues as well as 76 legal and illegal levies.
"These levies burden us. It's too much," he said
According to the Trade Ministry's director-general for foreign trades, Diah Maulida (foto), Jakarta contributes around 40 percent to the country's total non-oil-and-gas exports, which amounted to around US$80 billion in 2006.
In response to the remarks on the port's poor condition, the technical manager of PT Pelindo II, the state-owned company operating Tanjung Priok port, Mulyadi, told the audience Pelindo planned to develop the port.
He said development of the port would cover both sea and land areas.
He said Pelindo would widen the entrance-and-exit canal and deepen and widen the ship pool by moving the breakwater.
Pelindo would also improve roads at the port, he said.
"Development will begin next year ... to be completed by 2010."

Oil prices rise; above US$75 on storm worries

Oil prices rose Wednesday on expectations that the Atlantic hurricane season would intensify, and that a midweek U.S. government petroleum data would report declines in crude and gasoline stocks.
Light, sweet crude for October delivery rose 11 cents to US$75.19 a barrel in Asian electronic trading on the New York Mercantile Exchange, midmorning in Singapore. The contract rose US$1.04 to settle at US$75.08 a barrel Tuesday.
A U.S. hurricane expert Tuesday predicted that five more hurricanes are likely this season. Two of the hurricanes would be major, said Colorado State University forecaster William Gray.
Hurricane Felix slammed into Central America near the Nicaragua-Honduras border as a Category 5 storm early Tuesday, then weakened, but it has largely spared oil and gas infrastructure in the Gulf of Mexico.
Traders were also eyeing the release of U.S. government data Thursday expected to show domestic crude oil and gasoline stockpiles fell.
Analysts surveyed by Dow Jones Newswires predicted gasoline stocks would decline by 1.1 million barrels in the week ended Aug. 31, and that refinery utilization would rise by 0.2 percentage point to 90.5 percent.
With the minor increase in refinery activity, analysts expect that crude oil stocks will fall by 1.1 million barrels. Distillate stocks, which include heating oil and diesel fuel, are predicted to build by 100,000 barrels.
The report by the U.S. Energy Department's Energy Information Administration, which is normally released on Wednesdays, will be delayed by one day due to Monday's U.S. Labor Day holiday.
Reports of problems at Port Arthur, Texas, refineries operated by Motiva Enterprises LLC and Valero Energy Corp. also supported prices, as did a general expectation that the Organization of Petroleum Exporting Countries will hold production steady when members meet next week.
October Brent crude added 7 cents to US$73.99 a barrel on the ICE futures exchange in London.

Billions in trade deals expected during Putin's visit to Indonesia

JAKARTA(AP): Russia and Indonesia are expected tosign billions of dollars (euros) worth of weapons, mining and oil deals during Russian President Vladimir Putin's first visit (foto) to the country this week, a presidential spokesman said Tuesday.
Russia will grant Indonesia a US$1 billion creditline to buy Russian military hardware, said spokesman Dino Pati Djalal, without providing details.
Indonesian mining company Aneka Tambang will sign a US$3 billion deal with Russian aluminum giant United Company Rusal, while state-owned oil company Pertamina plans to sign a US$1 billion agreement with Russia's LukOil, he said.
Putin will meet with Indonesia President Susilo Bambang Yudhoyono on Thursday during a one-day stop over on his way to the Asia-Pacific Economic Cooperation forum in Australia.
The Russian investment will bring a much-needed boost to foreign capital inflow and help revamp Indonesia's aging mining and oil facilities. It comes just weeks after South Korea announced it signed S$8.5 billion in trade and investment deals with Jakarta. (***)