May 11 th , 2009 - IFCCI -

IFCCI JOINED THE 33rd IPA EXHIBITION

IFCCI had the opportunity to join the IPA Exhibition from 5 May until 7 May 2009 at the Jakarta Convention Center, Indonesia. This year, the convention and exhibition theme is "Managing Resources and Delivering Energy in a Challenging Environment".

The exhibition was first began with the opening speech by Mr. Roberto Loratto - Chairman of IPA. The rundown continued by the signing of 20 oil and gas contracts worth a total of US$1.37 billion which was witnessed also by The president of Indonesia H.E Dr. Susilo Bambang Yudhoyono. Total E&P Indonesie represented by The President Director - Mrs. Elizabet Proust was one of companies who signed the contract.

After striking the gong which officially marked the opening ceremony, Mr. President took a tour in the exhibition area accompanied by Mr. Purnomo Yusgiantoro (Minister of Energy and Mineral Resources), Mr. Roberto Loratto (Chairman of IPA), Mr. Widodo AS (Minister of Defense), Mr. Fahmi Idris (Minister of State Owned Enterprises), Mr. Fauzi Bowo (Governor of DKI Jakarta), Mr. R. Priyono (Chairman of BP Migas), and Mrs. Evita Legowo (Director General of BP Migas).

Mr. President gave his appreciation to IPA for gathering all oil and gas stakeholders in this convention and exhibition. Not to forget to mention IFCCI is also committed to continue support oil and gas industry by continuously informing news to people in France that Indonesia will still be a prospective country to invest to.

Halmahera to have $4.6b nickel smelter

A consortium of the Indonesian state-owned PT Aneka Tambang (Antam) and three foreign companies will develop a US$4.6 billion nickel smelting plant in Weda Bay, Halmahera, North Maluku.

Chairman of the Indonesian Investment Coordinating Board (BKPM), M. Luthfi, said Wednesday PT Antam and foreign companies from Western Europe and Japan had managed to secure financing for the smelting project.“It’s a big project. It’s in the final stage and hopefully, Antam and partners will start  the development later this year,” Luthfi said after speaking on the second day of the 33rd annual convention and exhibition  of the Indonesian Petroleum Association (IPA) on Wednesday.

However, he declined to mention the identities of the foreign business partners since the consortium is still finalizing business procedures.

Halmahera operates a nickel mining concession belonging to PT Weda Bay Nickel, 90 percent owned by listed French company Eramet, a world leading producer of metal alloys, and 10 percent by Antam, a  firm specializing in mining.

The Weda Bay deposit is one of the largest undeveloped nickel projects in the world, with an updated estimated reserve of 5.1 million tons of measured and inferred ore resources.

An Eramet press release last February stated that the volume of nickel ore anticipated from the Halmahera project would enable it to almost double its nickel production, with a total targeted annual capacity of up to 65,000 tons of nickel.

Currently, PT Inco is the largest nickel producer in the country with targeted production this year of around 79,000 tons. But due to weakening prices, this production target could be reduced this year.

Last February, Eramet announced that it had agreed to sell 33.4 percent of its stake in the Weda Bay mining project to Mitsubishi Corporation, Japan’s largest general trading company with over 200 commercial operations in approximately 80 countries worldwide.

The Weda Bay smelting plant project will be the first in the country as the one planned by PT Inco and PT Antam in Pomalaa, Southeast Sulawesi, has been cancelled recently. “The feasibility study by a number of independent consultants show that the project is not feasible commercially,” said Jannus T. Siahaan, the chief spokesman of the Canadian based Inco Limited.

According to Luthfi, in addition to the Weda Bay smelter project, there are several other large investment projects upcoming, including oil refineries and energy projects, requiring $7.6 billion of new investment. “These are huge [investments], considering that we are still in a global crisis that has cut the availability of investment capital in the world market,” he said, adding that the new investments would include geothermal energy and oil refineries.

Luthfi noted Indonesia would still attract 9 percent growth in inward investment this year. BKPM had targeted 12 percent growth in investment for 2009 but the figure was revised down to 9 percent to take account of the global financial crisis. Even so the total was still expected to reach about $17 billion.

Last year, inward investment grew by about 16 percent with the cumulative total amount reaching $16 billion, from $13.9 billion in 2007.

Government Limits offshore Investment Products

To prevent local investors from falling victim to sophisticated yet risky offshore investment products, a regulation is being drafted that will ban retail investors from buying such products and set tougher conditions for companies selling them to institutional ones.

The new regulation, currently being drafted by the Capital Market and Financial Institutions Supervisory Agency (Bapepam-LK), aims to provide greater protection for retail investors, following huge losses suffered recently by local individual investors exposed to such products.

Under the draft, overseas-based investment products can only be offered for sale to mutual funds (institutions), general insurance companies, re-insurance firms and pensions funds (institutions), meaning the products are not allowed to be sold to retail investors.

At present, retail investors can buy investment products freely in the market, either through banks or investment managers in securities firms as selling agents.

A clear monitoring system by the authorities, Bapepam or the central bank, is also currently absent for existing foreign investment products in Indonesia, leaving the investors - in particular individual ones - vulnerable to fraud.

Under the new policy, selling agents will be required to submit a monthly report on the product transactions to Bapepam.

The requirement is expected to prevent a repeat of a recent case involving Citibank customers in Indonesia, who suffered billions of rupiah in losses after buying investment products linked to bonds issued by the now-defunct Lehman Brothers, following the US banking giant's bankruptcy announcement. The investors bought the products through Citibank Indonesia.

In addition to the obligation to report, selling agents are also required to show permits, approval and license of the products from the regulators in the countries where the product issuers are headquartered.

The new policy will also require selling agents to meet a number of criteria before they can sell to institutional investors. Among them is the requirement to include information on the type of investment products, the risks, as well as investors' rights and obligations.

Bapepam has the right to hand out sanctions to those who fail to meet the requirements. The draft does not detail what the sanctions are. The draft can be viewed at the Bapepam website.

Commenting on the planned new policy, Allianz Insurance Management Asia Pacific chief investment officer Nikhil Srinivasan said in a recent interview the regulation should not include banning, but put more emphasis on more disclosure of products.

"I would suggest ensuring much better disclosure of any products in Indonesia. Let the products be sold, however you must ensure the customers understand the risks they're taking," he said.

Information required to be included in selling documents:

1. Type of products
2. Investment purposes
3. Risks and benefits
4. Investor rights and obligations
5. Fees
6. Reputation of foreign institutions that issue the products
7. Permits, license and approval from regulators in the origin countries
8. Legal connection between the selling agents and the products' issuers
9. Rating for the products (if available)
10.Ratio of value of products sold in Indonesia to those sold globally
11.The way the products are sold in the origin countries

The effect of the international financial and economic crisis
on the garments sector in developing countries

The crisis has completely cut off garment exporters from developing countries from access to credit, whether for working capital or investment capital. Export financing activities have also been paralysed.

84% of the garment exporters expect a decline in exports this year. Similar negative developments are anticipated for their export margins. Almost 60% expect to have to cut jobs this year, with 16% expecting a decline in employment of over 25%. For downloading all the information please

Source: CBI (Centre for the promotion of Imports from Developing Countries) - http://www.cbi.eu/?pag=1

Central Jakarta to hold Passer Baroe Festival

JAKARTA: To enliven the celebrations of the city's anniversary, Central Jakarta will hold the Passer Baroe Festival from June 19-21 at one of the city's oldest shopping arcades - Pasar Baru.

Central Jakarta Tourism Agency head Dewi Susanti said the festival would feature traditional art performances, Chinese lion dance and a singing contest, as well as competitions involving local residents, like duck hunting and pole climbing."We hope the attractions will draw Jakarta residents here," Dewi said as quoted by beritajakarta.com.

Shops along the arcade will also offer discounts from June 19 to July 19 as part of the city's anniversary celebrations.

A similar festival will also be held on Jl. Jaksa, which is known as the city's spot for foreign backpackers, from June 18-20.

The Signing of an MoU between AFD and Bank Mandiri

Agence Française de Développement (AFD), a French bilateral financial institution, and Bank Mandiri have signed a Memorandum of Understanding (MOU) that will support both institutions to develop a long term partnership focussed on “energy management and climate change”.

The MOU was signed by M. Joël Daligault, AFD Country Director for Indonesia and M. Thomas Arifin, Director of Treasury & International Banking Bank Mandiri, with the aim to provide a medium and long term funding, as well as credit risk sharing scheme, for supporting investments related to energy efficiency, use of renewable energy and switch from fuel to gas, which are more environmental friendly and have a positive impact on climate change.

Partnering with an international financial institution like AFD shows that Bank Mandiri has transparently made some good changes on their corporate governance, hence has brought high confidence of International financial institution to the bank.

AFD’s financing solution is one alternative source of funds of Bank Mandiri to meet its customers’ long term financing requirements. This financing solution from AFD is expected to improve the funding structure of the bank.

International SOS has launched a special website on the swine flu (H1N1)

In response to the latest developments surrounding the swine flu outbreak in Mexico and the United States, International SOS has launched a special website that has the latest information and travel advice for your international business travelers, expatriates and other globally-mobile workforce.

www.internationalsos.com/pandemicpreparedness

Use this website as your primary source of information as it will be continuously updating it.

Source: FCCS Newsletter/Monday 4 May 2009

MICHELIN Consumer Offer Program

Michelin offer 6 months installment free  for any purchase of Michelin tires, at 66 participating  outlets across Jakarta , Jawa  and Bali. This offer is applicable from 1 April until 30 September 2009 for all HSBC Credit Card Holder.

For detailed  information on outlets location , Michelin price & product range, please visit its website:www.id.michelin.com