The Jakarta Globe RSS: Business http://www.thejakartaglobe.com 2013 The Jakarta Globe Your City, Your World Wed, 30 Jul 2014 07:55:41 +0000 en-US hourly 1 http://www.thejakartaglobe.com/images/jakarta-globe.gif http://www.thejakartaglobe.com Malaysian Air Faces Passenger Cancellations After Disasters http://www.thejakartaglobe.com/?p=310565 Tue, 29 Jul 2014 14:11:19 +0700 Sydney/Singapore. Malaysian Airline System Bhd. is facing an influx of passenger cancellations after the carrier’s second disaster this year, adding to the strains of a company that’s bracing for a fourth consecutive annual loss. Travel agents from Melbourne to Singapore, New Delhi and Malaysian Air’s home country said they’ve seen a spike in withdrawn reservations since MH17’s downing this month — with cancellations climbing above 20 percent in some places. The Samoan women’s rugby team switched to Thai Airways from Malaysian Air on July 27 for a flight to a world cup event in France. The cancellations may add to the financial difficulties of an airline whose state-run parent, Khazanah Nasional, estimated it only had enough cash to operate for a year even before the latest crash. Malaysian Air has suffered the loss of 537 people this year, as the airline industry heads toward its worst year in almost a decade for fatalities. Passengers “are very, very afraid about anything else happening again,” said Ann Chitumbalam, manager at Escape Travel’s branch in Petaling Jaya, who’s seen about 30 percent of Malaysian Air bookings through her office canceled. Ticket holders “don’t want to take a risk,” she said. Chitumbalam said she received a text-message from a businessman within hours of the crash, canceling a trip to Amsterdam on Malaysian Air. Four months The airline said July 19 it would refund fares to customers postponing travel or canceling their tickets, including non-refundable ones. It also agreed to waive any fees for people changing travel plans to any destination Malaysian Air flies to during 2014, as long as they applied from July 18 to 24. Subang-based Malaysian Air, responding by e-mail to questions about passenger traffic, declined to give numbers of cancellations or to comment on ticket prices. While passenger traffic figures since the July 17 downing of Flight 17 aren’t available, Webjet in Melbourne estimates it’s canceled about a quarter of its Malaysian Air bookings since the disaster, which killed all 298 people on board and occurred four months after the disappearance of Flight 370. Yatra.com, a New Delhi-based online travel agent, saw an increase in cancellations and a dip in Malaysian Air bookings after the latest incident, said Sharat Dhall, the company’s president. ‘Double Whammy’ “It’s just natural to be worried,” Sera Mika, manager of the female Samoan rugby team, said by phone from Auckland. “We did have a lot of concerns.” In Singapore, Dynasty Travel estimates passengers will think twice before booking flights with the airline. “Many will avoid Malaysian Air for the time being,” said Alicia Seah, spokeswoman at Dynasty Travel, one of the three largest leisure travel agents in Singapore, without specifying any number for cancellations. “This is certainly a double whammy for the airline.” Malaysian Air, which racked 4.13 billion ringgit ($1.3 billion) in losses in the past three years, will probably lose more than 1 billion ringgit in 2014 as it grapples with costs and an exodus of passengers, according to the average analyst estimate compiled by Bloomberg. Loyal customers Thirteen of 15 analysts whose ratings are tracked by Bloomberg say investors should sell the airline’s stock while two say hold. The carrier’s shares have declined 29 percent this year, after dropping in each of the past six years. In June, before the latest disaster, Malaysian Air carried 3.1 percent fewer passengers than a year ago, the second straight monthly drop. The previous month saw the highest proportion of empty seats since 2009. Reversing that trend would involve restoring the loyalty of customers such as Vincent Sim, a 35-year-old self-employed Singapore resident. “The airline is going through such bad time, but I will definitely fly with them in the future as their prices, service and aircraft are on par with that of Singapore Airlines and Emirates,” Sim said. Malaysian Air has sought to lure passengers by offering lower fares. For example, it has four of the five cheapest single-stop fares for early-December return flights between Sydney and London on price comparison site skyscanner.net, undercutting China Southern Airlines and Cathay Pacific Airways. Cutting Prices At A$1,818 , Malaysian Air’s cheapest return fare on Monday was 4.2 percent cheaper than its lowest-priced option a week earlier. The new rate would result in the carrier being paid less than 5 US cents per kilometer over the 34,260- kilometer round trip. That compares to average costs of 5.34 cents per kilometer on Malaysian Air’s network in 2013, according to data compiled by Bloomberg. “They are under severe cost pressure,” Tan Kam Meng, an analyst at TA Securities Holdings in Kuala Lumpur, said by phone. “I don’t think cutting airfares would be an advantage.” While travelers and prices adjust to perceived risks, the downing of Flight MH17, 60 kilometers from the Ukrainian city of Donetsk, brought that region’s conflict back into the global spotlight. Rather than prompting a pause in the fighting, it risks escalating hostilities while world leaders pressure Russian President Vladimir Putin to speed an investigation. Some evidence points toward the plane being brought down by a surface-to-air missile. Appreciating Service Malaysian Air Chief Executive Officer Ahmad Jauhari, who said in a June interview that he may modify the airline’s future plane orders as a result of the MH370 disappearance, may need to reduce frequencies on some international routes, according to a May 16 report by CAPA Centre for Aviation, a Sydney-based consultancy. The carrier had previously anticipated ordering as many as 100 planes for delivery from late 2016 or early 2017, a person familiar with the matter said in February. While cheaper prices may deter defections, some people will be harder to convince. “I will not travel MAS,” Chen Shiying, a science tutor in Singapore, said in reference to Malaysian Air. He says he’s been shunning the carrier for some time because it is “suay,” or unlucky in the Hokkien dialect. “It might not be their fault, but still, I would want to avoid taking them.” Bloomberg]]> Sydney/Singapore. Malaysian Airline System Bhd. is facing an influx of passenger cancellations after the carrier’s second disaster this year, adding to the strains of a company that’s bracing for a fourth consecutive annual loss. Travel agents from Melbourne to Singapore, New Delhi and Malaysian Air’s home country said they’ve seen a spike in withdrawn reservations since MH17’s downing this month — with cancellations climbing above 20 percent in some places. The Samoan women’s rugby team switched to Thai Airways from Malaysian Air on July 27 for a flight to a world cup event in France. The cancellations may add to the financial difficulties of an airline whose state-run parent, Khazanah Nasional, estimated it only had enough cash to operate for a year even before the latest crash. Malaysian Air has suffered the loss of 537 people this year, as the airline industry heads toward its worst year in almost a decade for fatalities. Passengers “are very, very afraid about anything else happening again,” said Ann Chitumbalam, manager at Escape Travel’s branch in Petaling Jaya, who’s seen about 30 percent of Malaysian Air bookings through her office canceled. Ticket holders “don’t want to take a risk,” she said. Chitumbalam said she received a text-message from a businessman within hours of the crash, canceling a trip to Amsterdam on Malaysian Air. Four months The airline said July 19 it would refund fares to customers postponing travel or canceling their tickets, including non-refundable ones. It also agreed to waive any fees for people changing travel plans to any destination Malaysian Air flies to during 2014, as long as they applied from July 18 to 24. Subang-based Malaysian Air, responding by e-mail to questions about passenger traffic, declined to give numbers of cancellations or to comment on ticket prices. While passenger traffic figures since the July 17 downing of Flight 17 aren’t available, Webjet in Melbourne estimates it’s canceled about a quarter of its Malaysian Air bookings since the disaster, which killed all 298 people on board and occurred four months after the disappearance of Flight 370. Yatra.com, a New Delhi-based online travel agent, saw an increase in cancellations and a dip in Malaysian Air bookings after the latest incident, said Sharat Dhall, the company’s president. ‘Double Whammy’ “It’s just natural to be worried,” Sera Mika, manager of the female Samoan rugby team, said by phone from Auckland. “We did have a lot of concerns.” In Singapore, Dynasty Travel estimates passengers will think twice before booking flights with the airline. “Many will avoid Malaysian Air for the time being,” said Alicia Seah, spokeswoman at Dynasty Travel, one of the three largest leisure travel agents in Singapore, without specifying any number for cancellations. “This is certainly a double whammy for the airline.” Malaysian Air, which racked 4.13 billion ringgit ($1.3 billion) in losses in the past three years, will probably lose more than 1 billion ringgit in 2014 as it grapples with costs and an exodus of passengers, according to the average analyst estimate compiled by Bloomberg. Loyal customers Thirteen of 15 analysts whose ratings are tracked by Bloomberg say investors should sell the airline’s stock while two say hold. The carrier’s shares have declined 29 percent this year, after dropping in each of the past six years. In June, before the latest disaster, Malaysian Air carried 3.1 percent fewer passengers than a year ago, the second straight monthly drop. The previous month saw the highest proportion of empty seats since 2009. Reversing that trend would involve restoring the loyalty of customers such as Vincent Sim, a 35-year-old self-employed Singapore resident. “The airline is going through such bad time, but I will definitely fly with them in the future as their prices, service and aircraft are on par with that of Singapore Airlines and Emirates,” Sim said. Malaysian Air has sought to lure passengers by offering lower fares. For example, it has four of the five cheapest single-stop fares for early-December return flights between Sydney and London on price comparison site skyscanner.net, undercutting China Southern Airlines and Cathay Pacific Airways. Cutting Prices At A$1,818 , Malaysian Air’s cheapest return fare on Monday was 4.2 percent cheaper than its lowest-priced option a week earlier. The new rate would result in the carrier being paid less than 5 US cents per kilometer over the 34,260- kilometer round trip. That compares to average costs of 5.34 cents per kilometer on Malaysian Air’s network in 2013, according to data compiled by Bloomberg. “They are under severe cost pressure,” Tan Kam Meng, an analyst at TA Securities Holdings in Kuala Lumpur, said by phone. “I don’t think cutting airfares would be an advantage.” While travelers and prices adjust to perceived risks, the downing of Flight MH17, 60 kilometers from the Ukrainian city of Donetsk, brought that region’s conflict back into the global spotlight. Rather than prompting a pause in the fighting, it risks escalating hostilities while world leaders pressure Russian President Vladimir Putin to speed an investigation. Some evidence points toward the plane being brought down by a surface-to-air missile. Appreciating Service Malaysian Air Chief Executive Officer Ahmad Jauhari, who said in a June interview that he may modify the airline’s future plane orders as a result of the MH370 disappearance, may need to reduce frequencies on some international routes, according to a May 16 report by CAPA Centre for Aviation, a Sydney-based consultancy. The carrier had previously anticipated ordering as many as 100 planes for delivery from late 2016 or early 2017, a person familiar with the matter said in February. While cheaper prices may deter defections, some people will be harder to convince. “I will not travel MAS,” Chen Shiying, a science tutor in Singapore, said in reference to Malaysian Air. He says he’s been shunning the carrier for some time because it is “suay,” or unlucky in the Hokkien dialect. “It might not be their fault, but still, I would want to avoid taking them.” Bloomberg]]> http://www.thejakartaglobe.com/?p=310565 With PlayStation Network, Sony Goes Back to the Future in Search of Revival http://www.thejakartaglobe.com/?p=310544 Tue, 29 Jul 2014 11:11:46 +0700 Tokyo. Japan's Sony Corp is hammering out plans to rise from the ashes of nearly $10 billion lost in six years by building a future around its last consumer electronics blockbuster — the PlayStation.

Sony plans to reposition the video console warhorse as a hub for a network of streamed services, according to three senior officials, offering social media, movies and music as well as games. The executives spoke to Reuters on condition they not be named because the matters are still in early stages of discussion.

The plans to coax more revenue from the PlayStation's network of users are being developed by a new breed of managers brought in by Chief Executive Kazuo Hirai. Analysts say if Sony gets it right, the game and network business could earn about $1 billion in the fiscal year from April 2016  making it the most profitable part of the company bar a financial services unit.

"Network services have been a long-running issue for Sony," said Atsushi Osanai, associate professor at Waseda University's business school. It's a field Apple has dominated with iTunes, while established movie and music services like Netflix and Spotify are expanding fast.

"In the past there was a time when they [Sony] were all over the place and went after everything, but zeroing in first on game users is effective," said Osanai. The company's next progress report will come with its first-quarter earnings on July 31.

At 200 billion yen ($1.96 billion) last fiscal year, some 90 percent of it from games, Sony Entertainment Network's revenue is small compared with the 5 trillion yen at the company's broader electronics business. The division lost 10 billion yen last year and more losses are expected this year as it spends on servers and systems for a surge in users, but the executives  and analysts  expect it to ramp up quickly after that to double-digit margins.

The new thinking is far from Sony's first effort to kickstart a revival. Yet the company that was once the symbol of Japan's technology prowess has often failed in attempts to deliver innovative hits to match successes of old, like the Walkman music player.

The managers lining up Sony's new strategy know a PlayStation network won't fix mainstream loss-making businesses, like its TV division  "a grim electronics portfolio," according to brokerage Jefferies. It's also not the first time Sony has tried to develop networked content services.

But under plain-speaking Kenichiro Yoshida, a former head of Sony's Internet services unit now leading the charge as chief financial officer since April, managers believe focusing on PlayStation to develop a network is potentially Sony's best chance of securing a money-making springboard for revival.

"These are crucial assets that offer the greatest potential upside," said one of the senior officials.

Game on

The network's base of 52 million active users is dwarfed by Apple's iTunes with over 800 million, and now just about the same size as fast-growing Netflix. But Sony Entertainment Network's peg to a hit piece of hardware with a potentially captive audience can give the service a future edge, executives say.

Yoshida, 54, knows networks so far have been a black spot for Sony. A PlayStation security breach in 2011 was a major setback to its plans at the time for a looser network that was designed to allow a range of Sony devices to be connected.

The CFO's message to executives is that things must change. "What's made it tough for Sony in electronics is that we were never able to take the lead role in the networking era," Yoshida told a gathering of about 500 managers earlier this year, according to a person who attended the meeting.

While the network plans take shape, this year Yoshida is also overseeing restructuring across the company. Sony is axing thousands of white-collar jobs, has ditched the Vaio personal computer brand, and has placed the TV business in a separate subsidiary — to fend for itself.

High-tech components such as image sensors and batteries for smartphones, and next-generation consumer gadgets such as wearables, have been identified by Sony managers as key potential areas of hardware growth.

"Game and network services are a core part of Sony's electronics and we are currently strengthening our network services by expanding sales of the PlayStation 4 in a bid to raise revenue," said Mami Imada, Sony's general manager of public relations, asked to comment on future strategy for this article.

The latest iteration of the now 20-year-old console has outsold rivals easily, attracting committed gamers rather than the casual game playing audience that is migrating to smartphones and other mobile devices.

Even as Sony plans to extend the PlayStation's role, games are still driving the network services division forward, accounting for 90 percent of revenue. From July 31, Sony is launching a streaming game service, PS Now, the first ever for a console game maker, in the United States.

Sony has sold 8.7 million PlayStation 4s against 5 million Microsoft Corp Xbox Ones as of July 19, according to market research firm VGChartz. Nintendo's Wii U console, released a year earlier than its rivals, also trails with sales of 6.7 million.

Reuters

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Tokyo. Japan's Sony Corp is hammering out plans to rise from the ashes of nearly $10 billion lost in six years by building a future around its last consumer electronics blockbuster — the PlayStation.

Sony plans to reposition the video console warhorse as a hub for a network of streamed services, according to three senior officials, offering social media, movies and music as well as games. The executives spoke to Reuters on condition they not be named because the matters are still in early stages of discussion.

The plans to coax more revenue from the PlayStation's network of users are being developed by a new breed of managers brought in by Chief Executive Kazuo Hirai. Analysts say if Sony gets it right, the game and network business could earn about $1 billion in the fiscal year from April 2016  making it the most profitable part of the company bar a financial services unit.

"Network services have been a long-running issue for Sony," said Atsushi Osanai, associate professor at Waseda University's business school. It's a field Apple has dominated with iTunes, while established movie and music services like Netflix and Spotify are expanding fast.

"In the past there was a time when they [Sony] were all over the place and went after everything, but zeroing in first on game users is effective," said Osanai. The company's next progress report will come with its first-quarter earnings on July 31.

At 200 billion yen ($1.96 billion) last fiscal year, some 90 percent of it from games, Sony Entertainment Network's revenue is small compared with the 5 trillion yen at the company's broader electronics business. The division lost 10 billion yen last year and more losses are expected this year as it spends on servers and systems for a surge in users, but the executives  and analysts  expect it to ramp up quickly after that to double-digit margins.

The new thinking is far from Sony's first effort to kickstart a revival. Yet the company that was once the symbol of Japan's technology prowess has often failed in attempts to deliver innovative hits to match successes of old, like the Walkman music player.

The managers lining up Sony's new strategy know a PlayStation network won't fix mainstream loss-making businesses, like its TV division  "a grim electronics portfolio," according to brokerage Jefferies. It's also not the first time Sony has tried to develop networked content services.

But under plain-speaking Kenichiro Yoshida, a former head of Sony's Internet services unit now leading the charge as chief financial officer since April, managers believe focusing on PlayStation to develop a network is potentially Sony's best chance of securing a money-making springboard for revival.

"These are crucial assets that offer the greatest potential upside," said one of the senior officials.

Game on

The network's base of 52 million active users is dwarfed by Apple's iTunes with over 800 million, and now just about the same size as fast-growing Netflix. But Sony Entertainment Network's peg to a hit piece of hardware with a potentially captive audience can give the service a future edge, executives say.

Yoshida, 54, knows networks so far have been a black spot for Sony. A PlayStation security breach in 2011 was a major setback to its plans at the time for a looser network that was designed to allow a range of Sony devices to be connected.

The CFO's message to executives is that things must change. "What's made it tough for Sony in electronics is that we were never able to take the lead role in the networking era," Yoshida told a gathering of about 500 managers earlier this year, according to a person who attended the meeting.

While the network plans take shape, this year Yoshida is also overseeing restructuring across the company. Sony is axing thousands of white-collar jobs, has ditched the Vaio personal computer brand, and has placed the TV business in a separate subsidiary — to fend for itself.

High-tech components such as image sensors and batteries for smartphones, and next-generation consumer gadgets such as wearables, have been identified by Sony managers as key potential areas of hardware growth.

"Game and network services are a core part of Sony's electronics and we are currently strengthening our network services by expanding sales of the PlayStation 4 in a bid to raise revenue," said Mami Imada, Sony's general manager of public relations, asked to comment on future strategy for this article.

The latest iteration of the now 20-year-old console has outsold rivals easily, attracting committed gamers rather than the casual game playing audience that is migrating to smartphones and other mobile devices.

Even as Sony plans to extend the PlayStation's role, games are still driving the network services division forward, accounting for 90 percent of revenue. From July 31, Sony is launching a streaming game service, PS Now, the first ever for a console game maker, in the United States.

Sony has sold 8.7 million PlayStation 4s against 5 million Microsoft Corp Xbox Ones as of July 19, according to market research firm VGChartz. Nintendo's Wii U console, released a year earlier than its rivals, also trails with sales of 6.7 million.

Reuters

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http://www.thejakartaglobe.com/?p=310544
Citi to Hire 100 Bankers in Asia, Eyes More Business From Smaller Clients http://www.thejakartaglobe.com/?p=310541 Tue, 29 Jul 2014 11:02:24 +0700 Hong Kong. Citigroup plans to hire as many as 100 bankers in a renewed push into Asia-Pacific commercial banking, following in rival HSBC's footsteps with a strategy that focuses on selling smaller corporate clients a wider range of products.

Global banks like Citi and HSBC are now concentrating on small to medium-sized clients due to a dwindling number of $10 billion-plus IPOs from Chinese state-owned companies  deals which had sustained investment banks in the region over the last decade.

The increase in headcount, which represents a 10 percent boost for Citi's Asia-Pacific commercial banking unit, is aimed at offering firms with annual sales of between $10 million and $500 million additional services such as foreign exchange and cash management.

"This is not about adding hundreds of new clients in the region, but winning more wallet share from commercial banking clients who have cross-border business by providing them with more loans, FX, cash and trade products," Citi's Asia-Pacific commercial banking head Ashish Bajaj said in an interview.

He noted that Citi's role as joint global coordinator on Luye Pharma Group's IPO this month came from a commercial banking relationship with the Chinese pharmaceutical company, saying this was an example of the kind of deal the bank is hoping to do more of.

Citi also plans to target suppliers to major Asian firms such as China's Lenovo Group and India's Tata Motors and build relationships with start-ups that have the potential to develop into large companies.

Bajaj cited the example of Indian search engine Just Dial, a commercial banking client that had capital of only $1,000 in 1996 but which now has a market value of $1.9 billion after listing last year.

Banking revenue from small and medium-sized companies in emerging markets is set to grow at a rate of 20 percent per year and could reach over $350 billion by 2015, up from $150 billion in 2010, according to a survey by McKinsey & Company.

Citi created its commercial banking unit as a separate entity just over two years ago, operating in 32 of the more than 100 countries in which the U.S. bank has a presence and employing around 4,000 staff.

A source at Citi says its revenues from commercial banking in the region last year were around $1 billion. Bajaj declined to comment on that figure.

Although earnings figures are not directly comparable as banks include different businesses in their commercial banking units, HSBC's is much larger. It had profits before tax for its commercial bank in Asia Pacific of $4.4 billion last year, according to its annual report.

Citi also said it will begin commercial banking in Vietnam, adding around 18 staff to the 600 it has there. It will focus on companies from countries such as Korea and Taiwan who have manufacturing businesses in Vietnam.

Reuters

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Hong Kong. Citigroup plans to hire as many as 100 bankers in a renewed push into Asia-Pacific commercial banking, following in rival HSBC's footsteps with a strategy that focuses on selling smaller corporate clients a wider range of products.

Global banks like Citi and HSBC are now concentrating on small to medium-sized clients due to a dwindling number of $10 billion-plus IPOs from Chinese state-owned companies  deals which had sustained investment banks in the region over the last decade.

The increase in headcount, which represents a 10 percent boost for Citi's Asia-Pacific commercial banking unit, is aimed at offering firms with annual sales of between $10 million and $500 million additional services such as foreign exchange and cash management.

"This is not about adding hundreds of new clients in the region, but winning more wallet share from commercial banking clients who have cross-border business by providing them with more loans, FX, cash and trade products," Citi's Asia-Pacific commercial banking head Ashish Bajaj said in an interview.

He noted that Citi's role as joint global coordinator on Luye Pharma Group's IPO this month came from a commercial banking relationship with the Chinese pharmaceutical company, saying this was an example of the kind of deal the bank is hoping to do more of.

Citi also plans to target suppliers to major Asian firms such as China's Lenovo Group and India's Tata Motors and build relationships with start-ups that have the potential to develop into large companies.

Bajaj cited the example of Indian search engine Just Dial, a commercial banking client that had capital of only $1,000 in 1996 but which now has a market value of $1.9 billion after listing last year.

Banking revenue from small and medium-sized companies in emerging markets is set to grow at a rate of 20 percent per year and could reach over $350 billion by 2015, up from $150 billion in 2010, according to a survey by McKinsey & Company.

Citi created its commercial banking unit as a separate entity just over two years ago, operating in 32 of the more than 100 countries in which the U.S. bank has a presence and employing around 4,000 staff.

A source at Citi says its revenues from commercial banking in the region last year were around $1 billion. Bajaj declined to comment on that figure.

Although earnings figures are not directly comparable as banks include different businesses in their commercial banking units, HSBC's is much larger. It had profits before tax for its commercial bank in Asia Pacific of $4.4 billion last year, according to its annual report.

Citi also said it will begin commercial banking in Vietnam, adding around 18 staff to the 600 it has there. It will focus on companies from countries such as Korea and Taiwan who have manufacturing businesses in Vietnam.

Reuters

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http://www.thejakartaglobe.com/?p=310541
Malaysia Airlines Crew Reel After Disasters http://www.thejakartaglobe.com/?p=310485 Mon, 28 Jul 2014 14:31:27 +0700 Kuala Lumpur. Jonathan Takom has been a Malaysia Airlines steward for 16 worry-free years, but after the carrier's loss of two planes and nearly 30 crew, when he touches down these days his anxious family calls to check he's safe.

Pain and doubt have replaced the sense of security that he and his colleagues had previously taken for granted at the airline which once had a solid safety record.

"Especially when we arrive they will check whether we arrived safely. They want to know when is the flight and especially the flight number," said Takom, 37.

"The pressure from my family to stop [working on planes] is there. They ask me to think about it."

Malaysia Airlines' once strong reputation has been shattered by the still-unsolved disappearance of flight MH370 in March with 239 aboard, and the downing of flight MH17 in Ukraine on July 17, which killed all 298 on the plane.

The twin tragedies claimed the lives of 27 Malaysia Airlines crew.

"Obviously MH17 is a very traumatic situation where you see it happening  the plane going down," said Ismail Nasaruddin, president of Malaysia's national flight attendants union, referring to grainy video of MH17's fiery last moments.

"It will take quite a while to accept. We have to wait and see what are the side effects. Some have lost their very good friends."

'Like family'

No reports have yet emerged indicating any exodus by the carrier's cabin crew  who have won numerous industry quality awards over the years.

But it is with heavy hearts that many now don the carrier's distinctive blue batik-design cabin-crew uniforms.

At an interfaith prayer session held last Friday at the airline's training center on the outskirts of the capital Kuala Lumpur, many staff arrived in uniform, some in tears.

Many lingered afterwards, crying openly and hugging each other.

"We are still feeling the pain, but we have to go on," said a 39-year-old female flight attendant, a 17-year veteran with the carrier.

Most airline staff spoke on condition of anonymity as the company generally requests them not to speak to the media.

"It's very hard. We were just coming out of the shock of MH370," said another flight attendant, 41.

Another colleague said the tragedies were fuelling a sense of togetherness, while Takom and others were buoyed by well-wishes, hugs and even gifts of flowers and chocolates from sympathetic passengers.

"I will continue flying but deep inside when we work we think of all those who are still missing. Anything can happen to any of us," Takom said. "We are like family."

Zulkifli Abdul Rahman, brother-in-law of MH17 flight attendant Azrina Yakob, a mother of two, said his family was stunned by the twin disasters.

"We were shocked by the news," he said at his home in a residential area near the airport where many Malaysia Airlines staff live. "We did not expect there will be another incident. It was a big surprise."

Tribute walls have gone up on- and off-line, including photo montages of crew aboard MH17.

"R.I.P. We miss you all," a Malaysia Airlines staff member wrote on a tribute wall at the training centre.

"We luv u MH370 and MH17," another posting read.

Low morale

Malaysia Airlines was already struggling with years of financial losses, a situation now deeply compounded by the double tragedies.

A turnaround plan, which airline analysts say must include cuts to a bloated payroll, is expected soon, increasing the sense of a workforce under pressure.

One 43-year-old pilot told AFP that cabin crew morale was suffering.

"We don't see the usual joy in their faces after we land," he said.

A flight steward said he was now considering a job change.

"They [my family] are worried but they don't show or express their emotions. I know they are concerned," said the 12-year veteran.

Agence France-Presse

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Kuala Lumpur. Jonathan Takom has been a Malaysia Airlines steward for 16 worry-free years, but after the carrier's loss of two planes and nearly 30 crew, when he touches down these days his anxious family calls to check he's safe.

Pain and doubt have replaced the sense of security that he and his colleagues had previously taken for granted at the airline which once had a solid safety record.

"Especially when we arrive they will check whether we arrived safely. They want to know when is the flight and especially the flight number," said Takom, 37.

"The pressure from my family to stop [working on planes] is there. They ask me to think about it."

Malaysia Airlines' once strong reputation has been shattered by the still-unsolved disappearance of flight MH370 in March with 239 aboard, and the downing of flight MH17 in Ukraine on July 17, which killed all 298 on the plane.

The twin tragedies claimed the lives of 27 Malaysia Airlines crew.

"Obviously MH17 is a very traumatic situation where you see it happening  the plane going down," said Ismail Nasaruddin, president of Malaysia's national flight attendants union, referring to grainy video of MH17's fiery last moments.

"It will take quite a while to accept. We have to wait and see what are the side effects. Some have lost their very good friends."

'Like family'

No reports have yet emerged indicating any exodus by the carrier's cabin crew  who have won numerous industry quality awards over the years.

But it is with heavy hearts that many now don the carrier's distinctive blue batik-design cabin-crew uniforms.

At an interfaith prayer session held last Friday at the airline's training center on the outskirts of the capital Kuala Lumpur, many staff arrived in uniform, some in tears.

Many lingered afterwards, crying openly and hugging each other.

"We are still feeling the pain, but we have to go on," said a 39-year-old female flight attendant, a 17-year veteran with the carrier.

Most airline staff spoke on condition of anonymity as the company generally requests them not to speak to the media.

"It's very hard. We were just coming out of the shock of MH370," said another flight attendant, 41.

Another colleague said the tragedies were fuelling a sense of togetherness, while Takom and others were buoyed by well-wishes, hugs and even gifts of flowers and chocolates from sympathetic passengers.

"I will continue flying but deep inside when we work we think of all those who are still missing. Anything can happen to any of us," Takom said. "We are like family."

Zulkifli Abdul Rahman, brother-in-law of MH17 flight attendant Azrina Yakob, a mother of two, said his family was stunned by the twin disasters.

"We were shocked by the news," he said at his home in a residential area near the airport where many Malaysia Airlines staff live. "We did not expect there will be another incident. It was a big surprise."

Tribute walls have gone up on- and off-line, including photo montages of crew aboard MH17.

"R.I.P. We miss you all," a Malaysia Airlines staff member wrote on a tribute wall at the training centre.

"We luv u MH370 and MH17," another posting read.

Low morale

Malaysia Airlines was already struggling with years of financial losses, a situation now deeply compounded by the double tragedies.

A turnaround plan, which airline analysts say must include cuts to a bloated payroll, is expected soon, increasing the sense of a workforce under pressure.

One 43-year-old pilot told AFP that cabin crew morale was suffering.

"We don't see the usual joy in their faces after we land," he said.

A flight steward said he was now considering a job change.

"They [my family] are worried but they don't show or express their emotions. I know they are concerned," said the 12-year veteran.

Agence France-Presse

]]>
http://www.thejakartaglobe.com/?p=310485
Kerry to Woo Modi's India, but Quick Progress Unlikely http://www.thejakartaglobe.com/?p=310465 Mon, 28 Jul 2014 16:45:46 +0700 India's Prime Minister Narendra Modi comes out of a meeting room to receive his Bhutanese counterpart Tshering Tobgay before the start of their bilateral meeting in New Delhi May 27, 2014.  (Reuters Photo) India's Prime Minister Narendra Modi comes out of a meeting room to receive his Bhutanese counterpart Tshering Tobgay before the start of their bilateral meeting in New Delhi May 27, 2014. (Reuters Photo)[/caption]

Washington. US Secretary of State John Kerry visits India this week as Washington tries to revitalize ties it sees as a counterbalance to China's rising power, but rapid progress is unlikely, despite the reformist reputation of India's new leader.

The visit by Kerry, and a trip by Defense Secretary Chuck Hagel next month, follow the resounding election win of Prime Minister Narendra Modi in May and are meant to create a good climate for Modi's planned visit to Washington in September.

Analysts say it is only once Modi meets President Barack Obama that the United States may have a more realistic hope for progress on big defense projects, on removing obstacles to US firms' participation in India's nuclear power industry, and for firmer statements of shared interests in Asia.

"India will play a much greater role in Asia under the Modi administration, but it will do so for its own reasons and under its own terms," said Ashley Tellis of Washington's Carnegie Endowment for International Peace think tank.

Four years ago, Obama declared the US-India relationship would be "one of the defining partnerships of the 21st century" and last week the State Department called it one of "enormous strategic importance."

But while the two countries are in many ways natural allies, as big democracies with shared concerns about Islamist militancy and the rise of China, the relationship falls far short of Obama's rhetorical billing.

Disputes over protectionism and intellectual property rights have soured the business climate and India has remained cautious about committing to US strategic designs, given concerns that US power, eroded by domestic budget battles, may be waning.

The relationship took a dive last year after an Indian diplomat was arrested in New York on charges of mistreating her domestic help, an episode that provoked outrage and resentment in New Delhi.

Modi, whose Hindu nationalist Bharatiya Janata Party swept to an overwhelming victory after years of shaky Indian coalitions, has yet to make clear how closely he plans to work with Washington.

The potential for tension was always high. He was banned from visiting the United States after Hindu mobs killed more than 1,000 people, most of the Muslims, while he was chief minister of his home state of Gujarat.

The Obama administration sought to turn a new page by quickly inviting Modi to Washington after his election, and was pleased by his quick positive response.

Kerry will be heading the US team at the annual Strategic Dialogue with India on Thursday, and will be accompanied by US Commerce Secretary Penny Pritzker.

Modi mystery

The BJP has a strong streak opposed to Western dominance of world affairs and this meshes with the rise of the BRICS block of five powerful emerging nations, which includes China, that see themselves as a counterbalance to US hegemony.

One of Modi's first moves on the world stage since taking office was to sign up to a BRICS development bank intended to wrest control over global finanacial institutions away from the United States and Europe.

On Friday India threatened to block a worldwide reform of customs rules agreed last December, prompting a US warning that its demands on food stockpiling could kill global trade reform.

The deadline for agreeing the trade facilitation deal falls during Kerry's time in New Delhi and a failure to overcome India's objections by next week could overshadow his visit.

The Indian stance has fueled doubts about the extent of Modi's commitment to pushing through economic reforms seen as necessary to spur growth and attract investment.

US officials say Modi's first budget contained some positive signs. But ownership limits in the defense sector were not relaxed enough to allow US firms the controlling stakes they seek in joint ventures, which will make them reluctant to share technology India craves.

Nisha Biswal, US assistant secretary of state for South Asia, spoke this month of the US desire for Indian growth and its greater involvement in Southeast and East Asia, where China's territorial claims have caused increasing alarm.

India, which for decades had close military links with the Soviet Union while leading the world non-aligned movement, is cautious about being too closely associated with US strategic policy, not least because of its economic links with China.

"They will resist packaging their initiatives as a favor done to the United States, or as part of grand American strategy," said Tellis, of the Carnegie think tank.

"They may end up doing pretty much what the United States wants, but they will do so their own way."

Reuters

]]>
India's Prime Minister Narendra Modi comes out of a meeting room to receive his Bhutanese counterpart Tshering Tobgay before the start of their bilateral meeting in New Delhi May 27, 2014.  (Reuters Photo) India's Prime Minister Narendra Modi comes out of a meeting room to receive his Bhutanese counterpart Tshering Tobgay before the start of their bilateral meeting in New Delhi May 27, 2014. (Reuters Photo)[/caption]

Washington. US Secretary of State John Kerry visits India this week as Washington tries to revitalize ties it sees as a counterbalance to China's rising power, but rapid progress is unlikely, despite the reformist reputation of India's new leader.

The visit by Kerry, and a trip by Defense Secretary Chuck Hagel next month, follow the resounding election win of Prime Minister Narendra Modi in May and are meant to create a good climate for Modi's planned visit to Washington in September.

Analysts say it is only once Modi meets President Barack Obama that the United States may have a more realistic hope for progress on big defense projects, on removing obstacles to US firms' participation in India's nuclear power industry, and for firmer statements of shared interests in Asia.

"India will play a much greater role in Asia under the Modi administration, but it will do so for its own reasons and under its own terms," said Ashley Tellis of Washington's Carnegie Endowment for International Peace think tank.

Four years ago, Obama declared the US-India relationship would be "one of the defining partnerships of the 21st century" and last week the State Department called it one of "enormous strategic importance."

But while the two countries are in many ways natural allies, as big democracies with shared concerns about Islamist militancy and the rise of China, the relationship falls far short of Obama's rhetorical billing.

Disputes over protectionism and intellectual property rights have soured the business climate and India has remained cautious about committing to US strategic designs, given concerns that US power, eroded by domestic budget battles, may be waning.

The relationship took a dive last year after an Indian diplomat was arrested in New York on charges of mistreating her domestic help, an episode that provoked outrage and resentment in New Delhi.

Modi, whose Hindu nationalist Bharatiya Janata Party swept to an overwhelming victory after years of shaky Indian coalitions, has yet to make clear how closely he plans to work with Washington.

The potential for tension was always high. He was banned from visiting the United States after Hindu mobs killed more than 1,000 people, most of the Muslims, while he was chief minister of his home state of Gujarat.

The Obama administration sought to turn a new page by quickly inviting Modi to Washington after his election, and was pleased by his quick positive response.

Kerry will be heading the US team at the annual Strategic Dialogue with India on Thursday, and will be accompanied by US Commerce Secretary Penny Pritzker.

Modi mystery

The BJP has a strong streak opposed to Western dominance of world affairs and this meshes with the rise of the BRICS block of five powerful emerging nations, which includes China, that see themselves as a counterbalance to US hegemony.

One of Modi's first moves on the world stage since taking office was to sign up to a BRICS development bank intended to wrest control over global finanacial institutions away from the United States and Europe.

On Friday India threatened to block a worldwide reform of customs rules agreed last December, prompting a US warning that its demands on food stockpiling could kill global trade reform.

The deadline for agreeing the trade facilitation deal falls during Kerry's time in New Delhi and a failure to overcome India's objections by next week could overshadow his visit.

The Indian stance has fueled doubts about the extent of Modi's commitment to pushing through economic reforms seen as necessary to spur growth and attract investment.

US officials say Modi's first budget contained some positive signs. But ownership limits in the defense sector were not relaxed enough to allow US firms the controlling stakes they seek in joint ventures, which will make them reluctant to share technology India craves.

Nisha Biswal, US assistant secretary of state for South Asia, spoke this month of the US desire for Indian growth and its greater involvement in Southeast and East Asia, where China's territorial claims have caused increasing alarm.

India, which for decades had close military links with the Soviet Union while leading the world non-aligned movement, is cautious about being too closely associated with US strategic policy, not least because of its economic links with China.

"They will resist packaging their initiatives as a favor done to the United States, or as part of grand American strategy," said Tellis, of the Carnegie think tank.

"They may end up doing pretty much what the United States wants, but they will do so their own way."

Reuters

]]>
http://www.thejakartaglobe.com/?p=310465
Philippine Islamic Bank Eyes New Life After Years of Struggle http://www.thejakartaglobe.com/?p=310462 Mon, 28 Jul 2014 12:52:49 +0700 A peace plan, a lifting of foreign ownership limits and the drafting of new Islamic banking rules in the Philippines could help breathe new life into one of the world's oldest Islamic finance institutions.

Since 1974, Makati-based Al Amanah Islamic Investment Bank has been the only lender in the country offering financial products that obey religious principles such as a ban on interest and gambling.

But while Islamic banks around the globe enjoy rapid growth rates and bumper profits, Al Amanah has failed to post a profit for years, and was ultimately forced to offer conventional banking products just to keep afloat.

The case of Al Amanah highlights the challenges that Muslim minorities face in accessing interest-free banking services outside of Islamic banking's core centres in the Middle East and Southeast Asia.

Lacking scale and Islamic banking expertise have meant Al Amanah has struggled despite a five-year rehabilitation plan started in 2009 by its parent, the Development Bank of the Philippines (DBP).

In 2012, Al Amanah posted a loss of 30.6 million pesos ($706,400), although it was an improvement from 2008 when it posted a loss of 124.3 million pesos.

This could change as a landmark peace deal between the Philippine government and Muslim rebels helps revive the country's south, after a 40-year conflict that displaced two million and stunted economic growth.

The agreement, brokered by the Malaysian government, will give the Muslim-majority region known as Mindanao wider powers to control their economy and culture. In line with the agreement, the central bank is preparing dedicated Islamic banking rules.

Earlier this month, the government allowed foreign banks to take full control of local lenders, replacing a cap of 60 percent on foreign ownership.

All these factors are rekindling interest from potential buyers for Al Amanah, said Francis Nicolas Chua, officer in charge of investment banking at DBP.

"Since last year, we have received a number of proposals from across Asia, Middle East and Europe, to partner or inquire on a sale."

These have come from both full-fledged Islamic banks and universal banks with Islamic units, said Chua, who did not identify the parties.

"As far as Al Amanah, the government is currently in review of the whole process. The Government wants to ensure the framework is in place before privatising."

Chua said any potential buyer would have to make a public bid for Al Amanah, as DBP's policy is to go through an open bid process for any sale.

Al Amanah has courted buyers for years not just to inject capital but also to introduce new products and reverse the use of interest-bearing products in the bank's portfolio.

Islamic scholars allow such a practice under the concept of darura, or extreme necessity.

So far, however, no Islamic banks have made their intentions public.

Last week, local media reported that Malaysia's CIMB Group Holdings, parent of CIMB Islamic Bank, was planning to take a stake, but when approached by Reuters a spokesperson at CIMB denied the bank was pursuing such an acquisition.

A source at Al Amanah said a Malaysian group did make a bid in 2006 but this was conditional on the government developing a regulatory framework for Islamic banking within a two-year time frame.

"That didn't happen so they backed away from the bid," said the source who declined to be identified as the matter is not public, although the new developments could encourage new interest.

"Maybe the right people haven't come in yet."

Reuters

]]>
A peace plan, a lifting of foreign ownership limits and the drafting of new Islamic banking rules in the Philippines could help breathe new life into one of the world's oldest Islamic finance institutions.

Since 1974, Makati-based Al Amanah Islamic Investment Bank has been the only lender in the country offering financial products that obey religious principles such as a ban on interest and gambling.

But while Islamic banks around the globe enjoy rapid growth rates and bumper profits, Al Amanah has failed to post a profit for years, and was ultimately forced to offer conventional banking products just to keep afloat.

The case of Al Amanah highlights the challenges that Muslim minorities face in accessing interest-free banking services outside of Islamic banking's core centres in the Middle East and Southeast Asia.

Lacking scale and Islamic banking expertise have meant Al Amanah has struggled despite a five-year rehabilitation plan started in 2009 by its parent, the Development Bank of the Philippines (DBP).

In 2012, Al Amanah posted a loss of 30.6 million pesos ($706,400), although it was an improvement from 2008 when it posted a loss of 124.3 million pesos.

This could change as a landmark peace deal between the Philippine government and Muslim rebels helps revive the country's south, after a 40-year conflict that displaced two million and stunted economic growth.

The agreement, brokered by the Malaysian government, will give the Muslim-majority region known as Mindanao wider powers to control their economy and culture. In line with the agreement, the central bank is preparing dedicated Islamic banking rules.

Earlier this month, the government allowed foreign banks to take full control of local lenders, replacing a cap of 60 percent on foreign ownership.

All these factors are rekindling interest from potential buyers for Al Amanah, said Francis Nicolas Chua, officer in charge of investment banking at DBP.

"Since last year, we have received a number of proposals from across Asia, Middle East and Europe, to partner or inquire on a sale."

These have come from both full-fledged Islamic banks and universal banks with Islamic units, said Chua, who did not identify the parties.

"As far as Al Amanah, the government is currently in review of the whole process. The Government wants to ensure the framework is in place before privatising."

Chua said any potential buyer would have to make a public bid for Al Amanah, as DBP's policy is to go through an open bid process for any sale.

Al Amanah has courted buyers for years not just to inject capital but also to introduce new products and reverse the use of interest-bearing products in the bank's portfolio.

Islamic scholars allow such a practice under the concept of darura, or extreme necessity.

So far, however, no Islamic banks have made their intentions public.

Last week, local media reported that Malaysia's CIMB Group Holdings, parent of CIMB Islamic Bank, was planning to take a stake, but when approached by Reuters a spokesperson at CIMB denied the bank was pursuing such an acquisition.

A source at Al Amanah said a Malaysian group did make a bid in 2006 but this was conditional on the government developing a regulatory framework for Islamic banking within a two-year time frame.

"That didn't happen so they backed away from the bid," said the source who declined to be identified as the matter is not public, although the new developments could encourage new interest.

"Maybe the right people haven't come in yet."

Reuters

]]>
http://www.thejakartaglobe.com/?p=310462
Top 1% Control a Third of China's Wealth http://www.thejakartaglobe.com/?p=310326 Sat, 26 Jul 2014 12:40:03 +0700 Agence France-Presse]]> Agence France-Presse]]> http://www.thejakartaglobe.com/?p=310326 Lippo Karawaci’s First-Half Profit Rises 23% http://www.thejakartaglobe.com/business/lippo-karawacis-first-half-profit-rises-23/ Sat, 26 Jul 2014 08:51:10 +0700 Jakarta. Lippo Karawaci, one of the biggest listed property developers in Indonesia, reported a 23 percent increase in profit in the first half of the year, boosted by its urban development and health-care businesses. The property developer reported net income rose to Rp 672.9 billion ($58.5 million) in the January-June period from Rp 545.6 billion in the same six-month period last year. Revenue climbed 32 percent to Rp 4.1 trillion as its recurring income — which primarily comes from rental fees — rose 25 percent to Rp 2.19 trillion. “Rising prices have relatively slowed our growth in the past three years, but with a solid business model, we were able to navigate through the competition and maintain a good performance,” said Ketut Budi Wijaya, president director at Lippo Karawaci, in a statement listed on the Indonesia Stock Exchange (IDX) on Friday. Based in Tangerang, Lippo Karawaci has five main business units, including health care, urban development, large-scale integrated development, commercial — which includes malls and hotels — and asset management. Revenue from its health care unit — the biggest contributor to Lippo’s total revenue at 39 percent — rose 31 percent to Rp 1.6 trillion on the back of new hospital additions this year. Urban development revenue climbed 31 percent to Rp 1.1 trillion. Revenue at Lippo Cikarang — the industrial development unit of Lippo Karawaci — increased 53 percent to Rp 850 billion. Lippo Cikarang owns an industrial township in Bekasi under the same name and controls around 3,000 hectares in the area. The company’s industrial area includes globally recognized corporations from Japan, South Korea and Taiwan that have set up light to medium-size manufacturing production facilities. Lippo Cikarang also engages in housing, retail malls and hotels. The company is set to develop an integrated central business district on a 300-hectare plot in Cikarang, West Java. “Moving forward, living in high-rise residences seems to be a long-term trend, especially since prices are still relatively low in [Indonesia] compared to our neighboring countries. There’s great potential for healthy growth in the future,” Ketut said. Shares of Lippo Karawaci closed unchanged at Rp 1,100 on the IDX on Friday, compared to the 0.2 percent fall in the main stock gauge.  ]]> Jakarta. Lippo Karawaci, one of the biggest listed property developers in Indonesia, reported a 23 percent increase in profit in the first half of the year, boosted by its urban development and health-care businesses. The property developer reported net income rose to Rp 672.9 billion ($58.5 million) in the January-June period from Rp 545.6 billion in the same six-month period last year. Revenue climbed 32 percent to Rp 4.1 trillion as its recurring income — which primarily comes from rental fees — rose 25 percent to Rp 2.19 trillion. “Rising prices have relatively slowed our growth in the past three years, but with a solid business model, we were able to navigate through the competition and maintain a good performance,” said Ketut Budi Wijaya, president director at Lippo Karawaci, in a statement listed on the Indonesia Stock Exchange (IDX) on Friday. Based in Tangerang, Lippo Karawaci has five main business units, including health care, urban development, large-scale integrated development, commercial — which includes malls and hotels — and asset management. Revenue from its health care unit — the biggest contributor to Lippo’s total revenue at 39 percent — rose 31 percent to Rp 1.6 trillion on the back of new hospital additions this year. Urban development revenue climbed 31 percent to Rp 1.1 trillion. Revenue at Lippo Cikarang — the industrial development unit of Lippo Karawaci — increased 53 percent to Rp 850 billion. Lippo Cikarang owns an industrial township in Bekasi under the same name and controls around 3,000 hectares in the area. The company’s industrial area includes globally recognized corporations from Japan, South Korea and Taiwan that have set up light to medium-size manufacturing production facilities. Lippo Cikarang also engages in housing, retail malls and hotels. The company is set to develop an integrated central business district on a 300-hectare plot in Cikarang, West Java. “Moving forward, living in high-rise residences seems to be a long-term trend, especially since prices are still relatively low in [Indonesia] compared to our neighboring countries. There’s great potential for healthy growth in the future,” Ketut said. Shares of Lippo Karawaci closed unchanged at Rp 1,100 on the IDX on Friday, compared to the 0.2 percent fall in the main stock gauge.  ]]> http://www.thejakartaglobe.com/business/lippo-karawacis-first-half-profit-rises-23/ Freeport Gets Permit to Export Copper Concentrate From Indonesia http://www.thejakartaglobe.com/?p=310274 Fri, 25 Jul 2014 23:04:50 +0700 An aerial view shows the site of the Grasberg Mine, which is operated by the US-based Freeport-McMoRan, in Papua province in this November 4, 2010 file photo. (Reuters Photo/Muhammad Yamin) An aerial view shows the site of the Grasberg Mine, which is operated by the US-based Freeport-McMoRan, in Papua province in this November 4, 2010 file photo. (Reuters Photo/Muhammad Yamin)[/caption] Jakarta. Freeport-McMoRan has obtained a permit to resume exports of copper concentrate from Indonesia after a six-month stoppage, the head of its Indonesian unit told Reuters late on Friday. Freeport, Indonesia’s top copper producer, is one of the first companies to get an export permit after the government introduced a new rules on mineral exports in January. “We just have to make some preparations before we can start exporting. In terms of permitting, everything is OK,” Freeport Indonesia chief executive Rozik Sutjipto said, adding that the firm would now need to pay a higher royalties and a tax on its exports. “We have signed the MoU [memorandum of understanding] with the government, we have placed a bond for the smelter and we got a recommendation from the director general ... From there we went to the trade ministry and got the export permit,” Sutjipto said. Sutjipto said the firm expected to be able to resume shipments in early August. “We still have to load the ship, and this may take a few days,” Sutjipto said. He said it would take around a week to ramp up concentrate output to normal levels from the massive mine in Papua, up from around 40 percent of those levels at present. Earlier on Friday, the government approved a new regulation easing the export tax on mineral concentrates for miners planning to build a smelter. “The finance ministry regulation on the export tax has been signed,” said Deputy Finance Minister Bambang Brodjonegoro. As part of Friday’s deal, the government reduced Freeport’s copper concentrate export tax to 7.5 percent from 25 percent after the company agreed to pay a bond as a guarantee they will build a smelter later. The tax rate that Freeport is subject to is part of a new tax regime for mineral concentrate exporters approved on Friday by the finance ministry. “The 7.5 percent rate is not automatic, and is connected to their spending on a [smelter] guarantee bond and a percentage from the cost of their investment,” Bambang said. In January, Indonesia imposed an escalating tax policy, which penalized any company that had not made progress on building a smelter by slapping them with a 25 percent tax on copper concentrate exports or a 20 percent tax on lead, zinc, iron and manganese shipments. The tax was due to increase annually to 60 percent in 2017. The tax was intended to force miners to develop smelters and mineral processing facilities and part of a government push to derive bigger returns from Indonesia’s mineral resources. But rather than pay it, most miners stopped exporting from Southeast Asia’s biggest economy and one of the world’s top mineral producers. The government also banned the export of unprocessed ore, and that ban will remain in place. Reuters]]> An aerial view shows the site of the Grasberg Mine, which is operated by the US-based Freeport-McMoRan, in Papua province in this November 4, 2010 file photo. (Reuters Photo/Muhammad Yamin) An aerial view shows the site of the Grasberg Mine, which is operated by the US-based Freeport-McMoRan, in Papua province in this November 4, 2010 file photo. (Reuters Photo/Muhammad Yamin)[/caption] Jakarta. Freeport-McMoRan has obtained a permit to resume exports of copper concentrate from Indonesia after a six-month stoppage, the head of its Indonesian unit told Reuters late on Friday. Freeport, Indonesia’s top copper producer, is one of the first companies to get an export permit after the government introduced a new rules on mineral exports in January. “We just have to make some preparations before we can start exporting. In terms of permitting, everything is OK,” Freeport Indonesia chief executive Rozik Sutjipto said, adding that the firm would now need to pay a higher royalties and a tax on its exports. “We have signed the MoU [memorandum of understanding] with the government, we have placed a bond for the smelter and we got a recommendation from the director general ... From there we went to the trade ministry and got the export permit,” Sutjipto said. Sutjipto said the firm expected to be able to resume shipments in early August. “We still have to load the ship, and this may take a few days,” Sutjipto said. He said it would take around a week to ramp up concentrate output to normal levels from the massive mine in Papua, up from around 40 percent of those levels at present. Earlier on Friday, the government approved a new regulation easing the export tax on mineral concentrates for miners planning to build a smelter. “The finance ministry regulation on the export tax has been signed,” said Deputy Finance Minister Bambang Brodjonegoro. As part of Friday’s deal, the government reduced Freeport’s copper concentrate export tax to 7.5 percent from 25 percent after the company agreed to pay a bond as a guarantee they will build a smelter later. The tax rate that Freeport is subject to is part of a new tax regime for mineral concentrate exporters approved on Friday by the finance ministry. “The 7.5 percent rate is not automatic, and is connected to their spending on a [smelter] guarantee bond and a percentage from the cost of their investment,” Bambang said. In January, Indonesia imposed an escalating tax policy, which penalized any company that had not made progress on building a smelter by slapping them with a 25 percent tax on copper concentrate exports or a 20 percent tax on lead, zinc, iron and manganese shipments. The tax was due to increase annually to 60 percent in 2017. The tax was intended to force miners to develop smelters and mineral processing facilities and part of a government push to derive bigger returns from Indonesia’s mineral resources. But rather than pay it, most miners stopped exporting from Southeast Asia’s biggest economy and one of the world’s top mineral producers. The government also banned the export of unprocessed ore, and that ban will remain in place. Reuters]]> http://www.thejakartaglobe.com/?p=310274