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About Indonesia

Indonesia’s population of 258 million makes it the fourth most populous country in the world. The country has a young, growing and rapidly urbanizing population that makes it one of the fastest growing consumer markets in the world. Its economy is ranked as the tenth largest in the world. Valued at US$ 941 billion, it is projected to grow by 5.5% in 2017.

The government has unveiled various measures to stimulate investment, strengthen competitiveness, and diversify the economy. Given its abundant natural resources; political stability; attractive investment climate; and strong focus on developing its infrastructure, Indonesia is poised to transform into a great economic power.

Population: 258.32 million
Inflation Rate: 3.8%
Currency: Indonesian Rupiah (IDR)
Ave Exchange Rate: IDR 13,483 : US$ 1
Imports: US$ 129.1 billion
Exports: US$ 144.4 billion
GDP: US$ 941 billion
GDP per capita (PPP) US$ 11,700
Real GDP Growth 5%
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INDUSTRY REPORTS

This report is designed to provide an overview of the medical technologies sector in Indonesia, which is valued at US$ 900 million. The country harbors ambitions to develop its local medtech sector, and local factories are starting to produce medical equipment such as laboratory tools, radiolo...

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This report is designed to provide an overview of the smart cities sector in Indonesia. The country offers a number of opportunities in the smart city space, bolstered by its rapid urbanization and development. According to market research firm International Data Corporation (IDC), the Indones...

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Indonesia Country Profile

The report offers a wide range of data and information collected from various sources that were built together in order to provide not just facts but deeper insights about the country. Unlike other country reports that focus more on macro-economic data, we think that the most valuable part of ...

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This report is designed to provide an overview of the water and wastewater sector in Indonesia, which is facing multifaceted challenges, given that almost 40% of Indonesians have no access to adequate sanitation facilities, while a third do not have clean drinking water. The Indonesian governm...

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Indonesia

ECONOMIC NEWS

Indonesia And Australia Sign Economic Partnership Agreement

Indonesia  -  March 2019

On 4 March 2019, Indonesia and Australia signed the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA). Indonesia, which is expected to be the world’s fifth-largest economy by 2030, was Australia’s 13th largest trading partner in 2018.

The purpose of IA-CEPA is to reduce non-tariff barriers to trade and increase investment between the two countries. The newly signed agreement would allow 99% of Australia’s exports to enter Indonesia duty free or with significantly improved preferential arrangements by 2020. Indonesia will guarantee automatic issue of import permits for key products such as live cattle, frozen beef, sheep meat, feed grains, rolled steel coil, citrus products, carrots and potatoes. All Indonesia’s exports will enter Australia duty free.

Market access outcomes on services and investment will provide increased certainty to Australian businesses and services suppliers in the Indonesian market, including guaranteed levels of Australian ownership. Indonesia will not be able to limit the level of Australian ownership – or require that ownership be divested – below the percentages agreed (with limited exceptions).

The IA-CEPA builds on commitments under the existing free trade agreement, the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA). Further steps are required to to bring IA-CEPA into force. For Australia, this will include tabling the text of the agreement in Parliament and an inquiry by the Joint Standing Committee on Treaties (JSCOT).  

The Indonesian Chamber of Commerce and Industry (KADIN) predicts that textile and footwear industries in Indonesia will benefit most. In turn, Australia will be able to see an increase of wheat, fruits, vegetables, dairy and cattle export. Beyond free trade in goods, IA-CEPA would also open up the service industry in Indonesia, such as education, mining, power plant, hospital, telecommunications, tourism, construction, wastewater, transport and power plant, with possible Australian ownership up to 100%.


(Source: Reuters; Department of Foreign Affairs and Trade, Australia)


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Digital learning

ICT

Ping An's Fintech Subsidiary Commences Operations In Indonesia

Indonesia  -  March 2019

OneConnect, a subsidiary of China-based Ping An insurance group commenced operations in Indonesia on 20 February. OneConnect is a Fintech SaaS provider of advanced technology-enabled business solutions to small and medium-sized financial institutions. 

OneConnect has 101 products in four business disciplines including Digital Banking Solutions, Digital Insurance Solutions, Digital Investment Solutions, and SaaS Cloud Platform, covering sales, product development, risk management, operations and technology. It offers tested technology solutions which range from Artificial Intelligence, Blockchain, Biometrics Identification and other advanced technology solutions that were utilized by Ping An. 

Among the company’s highlighted technologies in Biometric Authentication is the Facial Recognition (FR) technology with 99.8% facial recognition accuracy. Financial institutions in Indonesia could use this technology to accurately and safely verify customers’ identities during the consumer onboarding process. The Blockchain technology could equip Indonesian banks and other financial institutions with end-to-end services that would increase their efficiency, enhance risk-control capabilities and reduce costs. 

OneConnect is partnering with Indonesia’s traditional market association (ASPARINDO) to conduct workshops and perform site visits at markets to help traders and kiosks digitize themselves.  


(Source: PR Newswire)


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ENERGY

Repsol Makes Largest Gas Discovery In Indonesia In 18 Years

Indonesia  -  March 2019

Repsol, the Spanish energy company, has made the largest gas find in Indonesia in 18 years. The discovery was made in the Sakakemang block in South Sumatra. The KDB-2X well in South Sumatra provides preliminary estimation of at least 2 TCF of recoverable resources or over 250 million barrels of oil equivalent. As an operator, Repsol holds a 45% working interest, while PETRONAS and MOECO owns 45% and 10% respectively.

The discovery is located 25km away from the Grissik gas plant which has the ability to gather and process production from ConocoPhillips-operated Corridor PSC. Corridor PSC is the main supplier of gas to Singapore and West Java. Repsol’s gas discovery came as a positive source for new supply to prolong the life of the Corridor PSC.

Repsol will continue the exploratory work in the coming months with an additional planned appraisal well. It has cooperated closely with SKK Migas on the exploration activity and continues to work on the next steps with Indonesian authorities.

SKK Migas, Indonesia’s upstream regulator, has been upbeat in its exploration efforts notwithstanding a decline in new investment activity. It is targeting of a discovery of at least one new giant field (500 million boe) by 2023.


(Sources: Energy Voice; Energy Global)


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MEDICAL

Indonesia Opens Up Universities And Hospitals To Foreign Investment

Indonesia  -  March 2019

The Investment Coordination Board (BKPM) of Indonesia revealed that government is considering revising its Negative List (Daftar Negatif Investasi) to allow foreigners to operate foreign universities and hospitals in the country.

Under the new proposed regulation, foreign universities could own up to 67% of shares. Those located in special economic zones (SEZs) are allowed to have as much as 100% shares. In response, BKPM has received interests from mainly Australian universities.

As for hospitals, the Indonesian government plans to relax foreign investment rules as the country is still dealing with hospital shortages. Currently, the country allows 67% ownership in foreign investment in private hospitals and 70% ownership if investors came from ASEAN countries. The number is expected to go up after the implementation which will take place after Indonesia’s election in April 2019.  


(Source: The Jakarta Post)


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Co2 emissions

ENVIRONMENT

Indonesia And UK Sign Low Carbon Energy MoU

Indonesia  -  March 2019

On 20 February 2019, the United Kingdom and Indonesia signed a Memorandum of Understanding (MoU) on low carbon energy development. Under the MoU, the UK will provide a USD 19.5 million grant to fund programs across Indonesia over the period of four years, starting from June 2019.

The targeted programs are matchmaking between the private sector and the government, capacity building for stakeholders, policy making assistance and pilot projects focused on Eastern Indonesia.

In addition, the MoU will cover programs such as the flagship Prosperity Fund Indonesia Renewable Energy Programme and the Prosperity Fund ASEAN Low Carbon Energy Programme (Green Finance). The UK Cross-Government Prosperity Fund aims to foster economic growth through revamping infrastructure and energy in the country.


(Sources: Tempo; The Jakarta Post)


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Infrastructure   highway   airport

INFRASTRUCTURE

Construction Of New Jakarta Airport To Start In 2021

Indonesia  -  March 2019

The state-owned airport operator, PT Angkasa Pura II, plans to build a new greenfield airport in Jakarta starting 2021. It is estimated that Indonesia would invest as much as USD 7 billion dollars for the project. The move is motivated by the unprecedented travel boom in the region, as well as in response to Indonesia’s president identifying tourism as a key foreign-exchange earner of the country.

Currently, PT Angkasa Pura II is carrying out a feasibility study. The new airport might be constructed near the existing Soekarno-Hatta International airport or built on 2,000 hectares land reclaimed from the sea. Moving forward, the airport operator will have to make the decision as to whether to construct the airport on its own or seek another’s firm collaboration.

PT Angkasa Pura II has been investing hundreds of million dollars in revamping the existing airport. A new terminal and runway were built to accommodate approximately 25 million passengers from about 9 million.

Other than Jakarta, PT Angkasa Pura is selecting a strategic investor for Kualanamu International Airport in Medan. Out of the 16 preferred bidders, the winning partner may own a maximum of 49% in the joint venture operating the newly built airport.


(Sources: Airport Technology; South China Morning Post)


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Factory inside steel

MANUFACTURING

IPhone Manufacturer Commencing Operation In Batam, Indonesia

Indonesia  -  March 2019

Pegatron Corporation, an Apple’s iPhones manufacturer, is looking to start production in April this year after it confirmed the rental of a 2-hectare factory in Riau Islands in Batam. The Taipei-based company’s investment is estimated to reach up to USD 300 million, including an initial investment of USD 40 million. The news came after Pegatron released statement that it has chosen Batam-based PT Sat Nusapersada to assemble electronic products for export purposes.

Pegatron’s decision came just as the deadline to resolve dual leadership in Batam looms. Earlier, there was a lack of clarity on issuance of business licenses, as both the Batam Development Industrial Authority, which reports directly to the central government and the Batam administration had the authority to issue them. The government took a decision to merge the two bodies but it was not supported by the ruling party's coalition partners. Hence, the implementation has been postponed till after the election in April. 

Furthermore, Batam is still waiting on the approval of the Special Economic Zones (SEZs) set forth to incentivize foreign companies to relocate to the island as a consequence of the United States – China trade war. The development of two special economic zones (SEZs) on Batam has been proposed, offering bigger tax incentives for businesses, while retaining its Free Trade Zone status. 


(Source: The Jakarta Post)


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DEFENSE / AEROSPACE / AVIATION

British Energy Firm BP Enters Indonesia's Avtur Market

Indonesia  -  March 2019

PT AKR Corporindo, Indonesia’s logistics and supply chain company operating in fuel and basic chemical distribution, has entered a joint venture with British Energy Firm BP to be a new player in Indonesia’s avtur or jet fuel market. This step was taken to curb the recent price increase of jet fuel in the market, with President Joko Widodo hinting the possibility of opening the market to private companies.

Currently, Pertamina, the state-owned oil and gas holding company, is the only supplier of jet fuel to Soekarno-Hatta International Airport. Their monopoly has received negative response from domestic airlines, such as PT Garuda Indonesia, Lion Air and PT AirAsia Indonesia, as the recent price increase from Pertamina had given them no choice but to pass it on to customers.

Backlash over the price hike has prompted the president to order a review on domestic jet fuel prices. In response, Pertamina has lowered avtur price by 3% to 56 cents per liter. The airlines have followed through by reducing the price of plane tickets by as much as 60% for certain domestic routes.

(Sources: The Jakarta Post; Bloomberg)

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Escalator stairs metal segments architecture

RETAIL / FMCG

IFC Approves USD 275 Million Loan To Indonesia's Trans Corp

Indonesia  -  March 2019

International Finance Corporation (IFC), a member of the World Bank Group, is providing a loan package of USD 275 million to PT Trans Corpora (Trans Corp), a wholly owned subsidiary of CT Corp. CT Corp is a diversified Indonesian-based holding company, active in the financial services, media, lifestyle & entertainment and natural resources industry. The aim of the financing is to support the growth of its retail, tourism and property operations across the country.

IFC’s investment will help Trans Corp to add new retail stores across 25 cities by 2025 which is expected to create over 30,000 new jobs in Indonesia. Furthermore, they are also working with over 6,000 suppliers in Indonesia, of which 70% are Small and Medium Enterprises (SMEs), and create approximately 23,000 jobs in areas such as farming and distribution.

In terms of tourism, IFC’s investment will assist Trans Corp to expand its tourism operations. Trans Corp has an agreement with Accor, a global hospitality company, to develop 30 new hotels, creating another 6,000 rooms across Indonesia.

The loan would also help address Indonesia's housing deficit, as Trans Corp property operations as the company is developing more than 10,000 affordable apartments across multiple locations. The company is also committed to promote resource efficient building to meet IFC EDGE (Excellence in Design for Greater Efficiencies) Green Building Standard. The building sector is Indonesia’s third-largest energy consumer and made up as much as 27% of Indonesia’s total final energy consumption.


(Source: International Finance Corporation; Antara News)


Companies

1   customized agent   distributor search

Customized Agent/ Distributor/Reseller Search

Having completed over 1000 customized agent/distributor/reseller searches for our clients over the years, this is one of the most popular trade services that we offer to potential clients. Typic...

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Sourcing Services

There is a growing interest in sourcing for products from South East Asia for strategic and competitive reasons. Companies from around the world are looking for suppliers in Malaysia, Thailand, ...

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Business Incorporation/ Site Selection

We counsel businesses on where to locate their office and industrial operations and what the optimal business structure should be to meet local government and tax requirements. Some of the quest...

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3   market research

Market Research

To successfully export your products or services, you need to learn about your customers, your competitors and your industry. Our market research process starts off with brainstorming effective ...

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2   trade show support

Trade Show Support

Many companies participate in trade shows hoping to find customers or local agents or distributors. However, they come away from these events with less than desired results. But with our trade s...

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Additional Services

Based on past experience in helping companies that are looking to grow their exports to one or more markets in South East Asia, we have found that some of these additional services that we offer...

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Economic Development Agencies & Trade Associations

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Trade Mission Organization

Visiting a market to meet with prospective customers or partners is essential as business is built on developing personal connections and understanding the local culture. Traveling ...

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2   trade show support

Trade Show Support

Trade shows can be an excellent option for companies and trade organizations to make key business and industry connections overseas. But to maximize the benefit of participating in ...

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Trade Representation

With over 20 years of experience providing dedicated representation in South East Asia to economic development organizations (EDOs) from North America and Europe, we offer EDOs the ...

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Market Research

Our strong track record in performing a targeted analysis of specific industry sectors in multiple markets has helped many economic development organizations (EDOs) to develop strat...

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9   investment attraction

Investment Attraction

Attracting investment from overseas can mean new or retained jobs in your area. Our investment attraction support services will position your economic development organization (EDO)...

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Additional Services

Having worked with government agencies and trade associations for over 20 years, we also provide a range of additional services customized to the requirements of these organizations...

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COMPANIES SEEKING AGENTS/DISTRIBUTORS/RESELLERS IN Indonesia

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Lovinflame, Inc.

Taiwan, Republic Of China
Consumer Goods; Furniture & Wood; Others
Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam
Innovative Candles: Lovinflame’s Ceramic Candles are po...
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Crown Hardwood Co., Inc.

USA
Furniture & Wood
Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam
US Hardwood Logs: Cherry, Hickory, Hard Maple, Poplar, Wa...
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Visual Software Inc.

USA
Education; Medical; Others
Philippines, Singapore, Indonesia, Malaysia, Thailand, Vietnam
We create, market and support products that allow various...
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