The Jakarta Globe RSS: Business http://www.thejakartaglobe.com 2013 The Jakarta Globe Your City, Your World Wed, 29 Oct 2014 23:37:58 +0000 en-US hourly 1 http://www.thejakartaglobe.com/images/jakarta-globe.gif http://www.thejakartaglobe.com Joko’s Maritime Mania Spurs Soechi Lines IPO http://thejakartaglobe.beritasatu.com/?p=340963 Wed, 29 Oct 2014 23:44:59 +0700 Jakarta. Soechi Lines, a marine transportation, shipyard industry and hotel firm, plans to raise up to Rp 2.05 trillion ($169 million) in proceeds from selling shares through an initial public offering, its chief said on Wednesday. Go Darmadi, the president director at the company said Soechi plans to sell up to 2.57 billion shares, or equivalent to 30 percent of its total equity. The company plans to offer its shares at a range of Rp 600 to Rp 800 per share to investors. That means the company is seeking to raise about Rp 1.54 trillion to Rp 2.05 trillion in proceeds from the share sale. Darmadi said about half of the proceeds will be used to help fund its capital expenditure, 25 percent to repay its debts and the remainder will be spent for its working capital. “Currently we operate 33 ships that include oil tankers, chemical tankers, gas carriers and floating vessels, storage and off-loading vessels. We plan to add seven to nine new vessels into our fleet that would cost $90 million,” he said. Darmadi said he was optimistic the IPO will be successful as President Joko Widodo has stated that the government will pay a stronger attention into the maritime sector. Mandiri Sekuritas and RHB OSK were appointed as the underwriters for the share sale. The company expects to secure effective statement from the Financial Service Authority (OJK), the capital markets and financial sector regulator, on Nov. 20. The company has set the offering for between Nov. 24-26 and listing of its shares at the Indonesia Stock Exchange on Dec. 2.]]> Jakarta. Soechi Lines, a marine transportation, shipyard industry and hotel firm, plans to raise up to Rp 2.05 trillion ($169 million) in proceeds from selling shares through an initial public offering, its chief said on Wednesday. Go Darmadi, the president director at the company said Soechi plans to sell up to 2.57 billion shares, or equivalent to 30 percent of its total equity. The company plans to offer its shares at a range of Rp 600 to Rp 800 per share to investors. That means the company is seeking to raise about Rp 1.54 trillion to Rp 2.05 trillion in proceeds from the share sale. Darmadi said about half of the proceeds will be used to help fund its capital expenditure, 25 percent to repay its debts and the remainder will be spent for its working capital. “Currently we operate 33 ships that include oil tankers, chemical tankers, gas carriers and floating vessels, storage and off-loading vessels. We plan to add seven to nine new vessels into our fleet that would cost $90 million,” he said. Darmadi said he was optimistic the IPO will be successful as President Joko Widodo has stated that the government will pay a stronger attention into the maritime sector. Mandiri Sekuritas and RHB OSK were appointed as the underwriters for the share sale. The company expects to secure effective statement from the Financial Service Authority (OJK), the capital markets and financial sector regulator, on Nov. 20. The company has set the offering for between Nov. 24-26 and listing of its shares at the Indonesia Stock Exchange on Dec. 2.]]> http://thejakartaglobe.beritasatu.com/?p=340963 OPPO Plans $30m Indonesia Plant http://thejakartaglobe.beritasatu.com/news/oppo-plans-30m-indonesia-plant/ Thu, 30 Oct 2014 01:58:15 +0700 A screen grab from http://global.oppo.com/en/products/r5/ A screen grab from http://global.oppo.com/en/products/r5/[/caption] Singapore. Chinese smartphone maker OPPO Technologies will start work on a $30 million assembly plant in Indonesia in March next year, following its entry into the country last year. The plant will be located near Tangerang, Banten, with the capacity to manufacture up to 500,000 smartphones per month, according to OPPO Indonesia chief executive Jet Lee. “The plant will make phones only for Indonesia, because the Indonesian market is so big,” Lee said after the launch of OPPO’s new phones — the R5 and theN3 — in Singapore on Wednesday. With the opening of its local branch last year, OPPO has seen a 6.5 percent market share in Indonesia, selling around 200,000 smart phone units monthly. Next year, the smartphone manufacturer aims to sell as many as 300,000 units per month, Lee said. With a youthful demographic and an expanding middle class, Indonesia has been the main attraction in the Southeast Asia region to many technology companies, such as OPPO. With a price tag of $649, the new N3 is equipped with a motorized rotating camera as its hallmark feature, highlighting OPPO’s attempt to make its mark in mobile photography. The smartphone manufacturer first has introduced the rotating camera feature last year with its N1 model. The R5 phone meanwhile, is only 4.85 millimeters thick — the slimmest smartphone in the world, OPPO says — fitted with a 13 megapixel camera on the back and a 5 megapixel camera on the front. The R5 will be commercially available in Indonesia in November, while the N3 will follow in December, according to OPPO Indonesia’s Jet Lee. “OPPO is committed to provide the best mobile photography technology quality,” Sky Lie, general manager of OPPO Technologies’ overseas mobile phone business, in Singapore, said on Wednesday. “With the two new products, you can see that we do have the most cutting-edge technology for smartphones.” The smartphone manufacturer has also partnered with a German camera maker to ramp up the camera hardware for its new products. OPPO was established in 2004 as an electronic household device manufacturer, launching its line of smartphones seven years later.]]> A screen grab from http://global.oppo.com/en/products/r5/ A screen grab from http://global.oppo.com/en/products/r5/[/caption] Singapore. Chinese smartphone maker OPPO Technologies will start work on a $30 million assembly plant in Indonesia in March next year, following its entry into the country last year. The plant will be located near Tangerang, Banten, with the capacity to manufacture up to 500,000 smartphones per month, according to OPPO Indonesia chief executive Jet Lee. “The plant will make phones only for Indonesia, because the Indonesian market is so big,” Lee said after the launch of OPPO’s new phones — the R5 and theN3 — in Singapore on Wednesday. With the opening of its local branch last year, OPPO has seen a 6.5 percent market share in Indonesia, selling around 200,000 smart phone units monthly. Next year, the smartphone manufacturer aims to sell as many as 300,000 units per month, Lee said. With a youthful demographic and an expanding middle class, Indonesia has been the main attraction in the Southeast Asia region to many technology companies, such as OPPO. With a price tag of $649, the new N3 is equipped with a motorized rotating camera as its hallmark feature, highlighting OPPO’s attempt to make its mark in mobile photography. The smartphone manufacturer first has introduced the rotating camera feature last year with its N1 model. The R5 phone meanwhile, is only 4.85 millimeters thick — the slimmest smartphone in the world, OPPO says — fitted with a 13 megapixel camera on the back and a 5 megapixel camera on the front. The R5 will be commercially available in Indonesia in November, while the N3 will follow in December, according to OPPO Indonesia’s Jet Lee. “OPPO is committed to provide the best mobile photography technology quality,” Sky Lie, general manager of OPPO Technologies’ overseas mobile phone business, in Singapore, said on Wednesday. “With the two new products, you can see that we do have the most cutting-edge technology for smartphones.” The smartphone manufacturer has also partnered with a German camera maker to ramp up the camera hardware for its new products. OPPO was established in 2004 as an electronic household device manufacturer, launching its line of smartphones seven years later.]]> http://thejakartaglobe.beritasatu.com/news/oppo-plans-30m-indonesia-plant/ Bank Permata’s Profit Down in First Nine Months http://thejakartaglobe.beritasatu.com/business/bank-permatas-profit-down-in-first-nine-months/ Thu, 30 Oct 2014 01:30:34 +0700 Jakarta. Bank Permata, one of the top 10 lenders by assets in Indonesia, booked a 6.1 percent year-on-year profit decline in the first nine month of this year, as its rising net interest income was unable to compensate for its falling margins, the company said in a statement on Wednesday. Net income at the lender — controlled by automotive distributor Astra International and UK lender Standard Chartered Bank — declined to Rp 1.24 trillion ($102.5 million) in the January-September period from Rp 1.32 trillion in the same period a year a go. This despite Bank Permata’s operating revenue actually having increased 7 percent in the period to Rp 4.98 trillion, thanks to a slight rise in its net interest income. The lender said its NII — income from lending money to customers after being reduced by the cost of paying its depositors — increased by 2 percent to Rp 4.1 trillion on the back of healthy loan growth. However, such gains were offset by margin compressions. Bank Permata also saw its operating costs rise by 9 percent to Rp 3.3 trillion, which the lender attributed to its investment in human resources, technology, and branches. Bank Permata did not elaborate on what it meant by “margin compressions,” but in general, lenders in Indonesia have been struggling with margins as they have to cope with high funding costs amid tight liquidity conditions. Local lenders have been engaged in a so-called “deposit rate war” to draw depositors. Meanwhile, the Indonesia is seeing capital flight from emerging markets into safer assets in developed countries. Wednesday’s data also showed Bank Permata’s loans grew healthily. Outstanding loans grew 12 percent to Rp 130 trillion. In the midst of competition for funding , Bank Permata managed to book a 20 percent rise in its third party funds — savings, demand deposits and current account — to Rp 147 trillion. This has pushed its total assets to Rp 185 trillion as of end of September from only Rp 155 trillion in the same period last year.]]> Jakarta. Bank Permata, one of the top 10 lenders by assets in Indonesia, booked a 6.1 percent year-on-year profit decline in the first nine month of this year, as its rising net interest income was unable to compensate for its falling margins, the company said in a statement on Wednesday. Net income at the lender — controlled by automotive distributor Astra International and UK lender Standard Chartered Bank — declined to Rp 1.24 trillion ($102.5 million) in the January-September period from Rp 1.32 trillion in the same period a year a go. This despite Bank Permata’s operating revenue actually having increased 7 percent in the period to Rp 4.98 trillion, thanks to a slight rise in its net interest income. The lender said its NII — income from lending money to customers after being reduced by the cost of paying its depositors — increased by 2 percent to Rp 4.1 trillion on the back of healthy loan growth. However, such gains were offset by margin compressions. Bank Permata also saw its operating costs rise by 9 percent to Rp 3.3 trillion, which the lender attributed to its investment in human resources, technology, and branches. Bank Permata did not elaborate on what it meant by “margin compressions,” but in general, lenders in Indonesia have been struggling with margins as they have to cope with high funding costs amid tight liquidity conditions. Local lenders have been engaged in a so-called “deposit rate war” to draw depositors. Meanwhile, the Indonesia is seeing capital flight from emerging markets into safer assets in developed countries. Wednesday’s data also showed Bank Permata’s loans grew healthily. Outstanding loans grew 12 percent to Rp 130 trillion. In the midst of competition for funding , Bank Permata managed to book a 20 percent rise in its third party funds — savings, demand deposits and current account — to Rp 147 trillion. This has pushed its total assets to Rp 185 trillion as of end of September from only Rp 155 trillion in the same period last year.]]> http://thejakartaglobe.beritasatu.com/business/bank-permatas-profit-down-in-first-nine-months/ Subsidized Fuel Is Running Out http://thejakartaglobe.beritasatu.com/business/subsidized-fuel-running/ Thu, 30 Oct 2014 01:37:07 +0700 Jakarta. The remaining subsidized fuel quota for this year is less than 8 million kiloliters, from the 46 million kiloliter set in the 2014 revised state budget, a high-level official at the Energy and Mineral Resources Ministry said on Wednesday. The new government under President Joko Widodo must deal with a threat that the nation may run out of subsidized fuel as the previous members of the House of Representatives locked the quota at 46 million kiloliters in the budget, which cannot be changed by the government. The revised budget sets the government’s fuel subsidy spending at Rp 246.5 trillion ($20.3 billion), or about 13 percent of the total government spending. In 2013 the subsidy was set at Rp 210.0 trillion. Joko cannot change this year’s quota and he must control the use of subsidized fuel in the country for the remainder of the year. “I have not received reports from Pertamina [state-run oil and gas company]. But currently [consumption] has reached 38.4 million kiloliters,” Edy Hermantoro, the director general of oil and gas at the ministry, said on Wednesday. He did not give details on how much the of the consumption of subsidized fuel was premium gasoline or diesel. Edy said the ministry did not have the authority to limit subsidized fuel consumption as the distribution is controlled by downstream oil and gas regulator BPH Migas and conducted by Pertamina. Meanwhile, BPH Migas head Andy Noorsaman Sommeng said the national average consumption of gasoline is around 40,000 to 50,000 kiloliters per day, while diesel is around half that. Separately, Finance Minister Bambang Brodjonegoro hinted that the government could raise subsidized fuel prices before the end of this year as Joko seeks to trim subsidies and create more fiscal breathing room for the new government. The government has also said it aims to change the subsidy system to free up funds for more productive use, although so far no details have been provided on the timing. “Any budget reallocation because of the fuel pricing policy can only happen in 2015,” Bambang said. The finance minister added that said he would likely recommend a fixed subsidy system, reiterating a vision he laid out in August while he was a vice deputy minister in the previous administration. New Energy and Mineral Resources Minister Sudirman Said said the government was still studying the subsidized fuel price hike. No detailed discussion on the increase has taken place, he said, as the government is focusing on the implementation of pro-people programs such as the smart card and health card. “We must return the subsidy on its right track. The subsidy enjoyed by the wealthy will be given to the poor,” Sudirman said. Previously, an adviser to Joko said the president would increase the subsidized fuel price by up to Rp 3,000 per liter, a move welcomed by the central bank and former finance minister Muhammad Chatib Basri. He said the nearly 50 percent increase would cut subsidy spending by Rp 21 trillion in the 2014 state budget. President Joko has said he would reduce the subsidies gradually, to free up funds to help the poor, build infrastructure and support farmers, fishermen, and workers.   Additional reporting by Bloomberg & Reuters]]> Jakarta. The remaining subsidized fuel quota for this year is less than 8 million kiloliters, from the 46 million kiloliter set in the 2014 revised state budget, a high-level official at the Energy and Mineral Resources Ministry said on Wednesday. The new government under President Joko Widodo must deal with a threat that the nation may run out of subsidized fuel as the previous members of the House of Representatives locked the quota at 46 million kiloliters in the budget, which cannot be changed by the government. The revised budget sets the government’s fuel subsidy spending at Rp 246.5 trillion ($20.3 billion), or about 13 percent of the total government spending. In 2013 the subsidy was set at Rp 210.0 trillion. Joko cannot change this year’s quota and he must control the use of subsidized fuel in the country for the remainder of the year. “I have not received reports from Pertamina [state-run oil and gas company]. But currently [consumption] has reached 38.4 million kiloliters,” Edy Hermantoro, the director general of oil and gas at the ministry, said on Wednesday. He did not give details on how much the of the consumption of subsidized fuel was premium gasoline or diesel. Edy said the ministry did not have the authority to limit subsidized fuel consumption as the distribution is controlled by downstream oil and gas regulator BPH Migas and conducted by Pertamina. Meanwhile, BPH Migas head Andy Noorsaman Sommeng said the national average consumption of gasoline is around 40,000 to 50,000 kiloliters per day, while diesel is around half that. Separately, Finance Minister Bambang Brodjonegoro hinted that the government could raise subsidized fuel prices before the end of this year as Joko seeks to trim subsidies and create more fiscal breathing room for the new government. The government has also said it aims to change the subsidy system to free up funds for more productive use, although so far no details have been provided on the timing. “Any budget reallocation because of the fuel pricing policy can only happen in 2015,” Bambang said. The finance minister added that said he would likely recommend a fixed subsidy system, reiterating a vision he laid out in August while he was a vice deputy minister in the previous administration. New Energy and Mineral Resources Minister Sudirman Said said the government was still studying the subsidized fuel price hike. No detailed discussion on the increase has taken place, he said, as the government is focusing on the implementation of pro-people programs such as the smart card and health card. “We must return the subsidy on its right track. The subsidy enjoyed by the wealthy will be given to the poor,” Sudirman said. Previously, an adviser to Joko said the president would increase the subsidized fuel price by up to Rp 3,000 per liter, a move welcomed by the central bank and former finance minister Muhammad Chatib Basri. He said the nearly 50 percent increase would cut subsidy spending by Rp 21 trillion in the 2014 state budget. President Joko has said he would reduce the subsidies gradually, to free up funds to help the poor, build infrastructure and support farmers, fishermen, and workers.   Additional reporting by Bloomberg & Reuters]]> http://thejakartaglobe.beritasatu.com/business/subsidized-fuel-running/ XL Axiata Files Shock Loss After Rising Costs http://thejakartaglobe.beritasatu.com/business/xl-axiata-files-shock-loss-rising-costs/ Thu, 30 Oct 2014 01:39:37 +0700 Jakarta. XL Axiata, Indonesia’s second-largest mobile phone operator by users, posted a Rp 901.2 billion ($74.5 million) loss in the first nine-month of this year, a huge swing from the Rp 917 billion in profit in the same period last year, the company said in a filing to the Indonesian stock exchange. XL, majority owned by Malaysian telecommunication company Axiata Group, posted a 10.9 percent increase in its revenue in the period, but it wasn’t enough to offset the drag of its rising costs. XL’s infrastructure expenses increased 43.5 percent to Rp 6.3 trillion. This has put pressure on XL’s operating profit, which declined by 89.5 percent to Rp 138.13 billion. XL’s net foreign exchange loss has also increased to Rp 935.5 billion up from Rp 714.6 billion. The company has made efforts to reduce expenses and lower its maintenance costs, including selling telecommunication towers, to enable it to focus on its mobile telecommunication businesses. The company has signed an asset purchase agreement to sell 3,500 communication towers to Solusi Tunas Pratama, a telecommunication infrastructure company in a Rp 5.6 trillion deal. According to the agreement, the sale is expected to be finalized at the end of the year and Solusi Tunas Pratama will pay off the transaction entirely in cash. XL will be left with a remaining 6,500 towers after the sale. XL Axiata has previously said that it was planning to use funds from the tower sale to refinance its $865 million debt that it used to acquire a stake in smaller mobile phone operator Axis Telekom Indonesia in March.]]> Jakarta. XL Axiata, Indonesia’s second-largest mobile phone operator by users, posted a Rp 901.2 billion ($74.5 million) loss in the first nine-month of this year, a huge swing from the Rp 917 billion in profit in the same period last year, the company said in a filing to the Indonesian stock exchange. XL, majority owned by Malaysian telecommunication company Axiata Group, posted a 10.9 percent increase in its revenue in the period, but it wasn’t enough to offset the drag of its rising costs. XL’s infrastructure expenses increased 43.5 percent to Rp 6.3 trillion. This has put pressure on XL’s operating profit, which declined by 89.5 percent to Rp 138.13 billion. XL’s net foreign exchange loss has also increased to Rp 935.5 billion up from Rp 714.6 billion. The company has made efforts to reduce expenses and lower its maintenance costs, including selling telecommunication towers, to enable it to focus on its mobile telecommunication businesses. The company has signed an asset purchase agreement to sell 3,500 communication towers to Solusi Tunas Pratama, a telecommunication infrastructure company in a Rp 5.6 trillion deal. According to the agreement, the sale is expected to be finalized at the end of the year and Solusi Tunas Pratama will pay off the transaction entirely in cash. XL will be left with a remaining 6,500 towers after the sale. XL Axiata has previously said that it was planning to use funds from the tower sale to refinance its $865 million debt that it used to acquire a stake in smaller mobile phone operator Axis Telekom Indonesia in March.]]> http://thejakartaglobe.beritasatu.com/business/xl-axiata-files-shock-loss-rising-costs/ Medco Posts 5% Decline in 9-Month Profit http://thejakartaglobe.beritasatu.com/business/medco-posts-5-decline-9-month-profit/ Thu, 30 Oct 2014 01:42:24 +0700 Jakarta. Medco Energi Internasional, the largest listed oil and gas company in Indonesia, booked a 5 percent decline in its profit, as the decline in its costs cannot offset falling sales, the company said in a filing to the stock exchange on Wednesday. Medco’s reported net income of $9.5 million in January-September period from $10.0 million in the same period a year ago. The company’s total cost of sales and other direct costs declined by 2.75 percent to $353 million. However, the company’s total sales and other operating revenues declined nearly 10 percent to $552 million. Medco’s oil and gas exploration and production businesses contributed about 94 percent of this figure. Oil and gas companies, including Medco, have been coping with falling global crude oil prices, which have impacted sales. According to the filing, Medco’s net oil and gas sales declined by 9.75 percent to $518 million. In a separate statement sent by the company on Wednesday, it announced that it sold 41 million barrels of oil-equivalent (mmboe) from Jan. 1 to Sept. 30 this year. The company did not provide figures for the corresponding period last year. Medco has other businesses, including coal mining and provision of services for the oil and gas sector. The filing said Medco’s revenue from coal sales fell 2.15 percent to $25.5 million, while its revenue from services declined 21.5 percent to $8.6 million. Medco is controlled by the Panigoro family and it operates nine oil and gas blocks in Indonesia. It also operates overseas, including in Libya, Oman, Papua New Guinea, Tunisia, Yemen and in the Gulf of Mexico off the US coast. Medco on Wednesday also provided an update on the progress in its oil and gas business locally and overseas. It said the company has succeeded in its exploration activities to find new reserves of oil and gas in Sumur Hijau 2, which is part of the South Sumatra production sharing contract (PSC) block. Medco is also owns a 30 percent stake in Pertamina-Medco Tomori, which is developing Senoro gas field at Senoro-Toili block in Sulawesi. Lukman Mahfoedz, Medco president director and chief executive, said in Wednesday’s statement that the project completion of the Senoro gas field stood at 87 percent. Once completed, the project aims to commercialize the 167.66 million barrels of oil equivalent of gas reserves in the block. Medco shares rose 0.26 percent to close at Rp 3,870 per share on the Indonesia Stock Exchange on Wednesday.]]> Jakarta. Medco Energi Internasional, the largest listed oil and gas company in Indonesia, booked a 5 percent decline in its profit, as the decline in its costs cannot offset falling sales, the company said in a filing to the stock exchange on Wednesday. Medco’s reported net income of $9.5 million in January-September period from $10.0 million in the same period a year ago. The company’s total cost of sales and other direct costs declined by 2.75 percent to $353 million. However, the company’s total sales and other operating revenues declined nearly 10 percent to $552 million. Medco’s oil and gas exploration and production businesses contributed about 94 percent of this figure. Oil and gas companies, including Medco, have been coping with falling global crude oil prices, which have impacted sales. According to the filing, Medco’s net oil and gas sales declined by 9.75 percent to $518 million. In a separate statement sent by the company on Wednesday, it announced that it sold 41 million barrels of oil-equivalent (mmboe) from Jan. 1 to Sept. 30 this year. The company did not provide figures for the corresponding period last year. Medco has other businesses, including coal mining and provision of services for the oil and gas sector. The filing said Medco’s revenue from coal sales fell 2.15 percent to $25.5 million, while its revenue from services declined 21.5 percent to $8.6 million. Medco is controlled by the Panigoro family and it operates nine oil and gas blocks in Indonesia. It also operates overseas, including in Libya, Oman, Papua New Guinea, Tunisia, Yemen and in the Gulf of Mexico off the US coast. Medco on Wednesday also provided an update on the progress in its oil and gas business locally and overseas. It said the company has succeeded in its exploration activities to find new reserves of oil and gas in Sumur Hijau 2, which is part of the South Sumatra production sharing contract (PSC) block. Medco is also owns a 30 percent stake in Pertamina-Medco Tomori, which is developing Senoro gas field at Senoro-Toili block in Sulawesi. Lukman Mahfoedz, Medco president director and chief executive, said in Wednesday’s statement that the project completion of the Senoro gas field stood at 87 percent. Once completed, the project aims to commercialize the 167.66 million barrels of oil equivalent of gas reserves in the block. Medco shares rose 0.26 percent to close at Rp 3,870 per share on the Indonesia Stock Exchange on Wednesday.]]> http://thejakartaglobe.beritasatu.com/business/medco-posts-5-decline-9-month-profit/ Matahari’s Profits Shine, Sales Strong http://thejakartaglobe.beritasatu.com/business/mataharis-profits-shine-sales-strong/ Thu, 30 Oct 2014 01:54:05 +0700 Jakarta. Matahari Department Store, one of Indonesia’s leading department store operators, said its profits for the first nine months of the year grew 17.9 percent over last year, owing to strong, resilient consumer demand. Matahari booked Rp 1.06 trillion ($87 million) in net income between January and September, up from Rp 899.5 billion in 2013, the company said in a statement on Wednesday. The company also saw 14 percent growth in gross sales to Rp 10.98 trillion. “We continue to see strength and resilience in consumer demand in our target middle income segment,” Matahari chief executive and president director Michael Remsen in the statement. “Customers are reacting positively to our continued efforts to provide fashionable products with great value, in an enjoyable customer-focused environment.” As of the end of September 2014, Matahari operates 126 stores in 62 cities across the archipelago. The company also plans to open seven more stores by the end of the year. Matahari is the country’s largest department store retailer. Its majority shareholders are Asia Color Company and Multipolar. Asia Color is ultimately controlled by European private-equity firm CVC Capital Partners; Multipolar is controlled by the Lippo Group. The Jakarta Globe is affiliated with the Lippo Group.]]> Jakarta. Matahari Department Store, one of Indonesia’s leading department store operators, said its profits for the first nine months of the year grew 17.9 percent over last year, owing to strong, resilient consumer demand. Matahari booked Rp 1.06 trillion ($87 million) in net income between January and September, up from Rp 899.5 billion in 2013, the company said in a statement on Wednesday. The company also saw 14 percent growth in gross sales to Rp 10.98 trillion. “We continue to see strength and resilience in consumer demand in our target middle income segment,” Matahari chief executive and president director Michael Remsen in the statement. “Customers are reacting positively to our continued efforts to provide fashionable products with great value, in an enjoyable customer-focused environment.” As of the end of September 2014, Matahari operates 126 stores in 62 cities across the archipelago. The company also plans to open seven more stores by the end of the year. Matahari is the country’s largest department store retailer. Its majority shareholders are Asia Color Company and Multipolar. Asia Color is ultimately controlled by European private-equity firm CVC Capital Partners; Multipolar is controlled by the Lippo Group. The Jakarta Globe is affiliated with the Lippo Group.]]> http://thejakartaglobe.beritasatu.com/business/mataharis-profits-shine-sales-strong/ Malaysia’s Tiered Fuel Subsidy Idea Panned by Critics http://thejakartaglobe.beritasatu.com/?p=340818 Wed, 29 Oct 2014 18:03:21 +0700 Malaysia's Prime Minister Najib Razak plans to further liberalize investment in the country by opening the corporate bond market to overseas investors. (Reuters Photo/Vivek Prakash) Malaysia's Prime Minister Najib Razak has been criticized for his government's idea to adopt a tiered fuel subsidy. (Reuters Photo/Vivek Prakash)[/caption] Kuala Lumpur. Malaysia has followed up on two fuel subsidy cuts in the past year with a proposal for a tiered subsidy system that skeptics say will be hard to execute and looks more like an attempt to placate voters griping about living costs. In recent years, Malaysia has shielded its citizens from the full brunt of surging crude oil prices with fuel subsidies of around 24 billion ringgit ($7.34 billion) annually. That has exacerbated the government’s budget deficit, one of the region’s biggest as a proportion of gross domestic product. To shore up its finances, Malaysia cut the subsidies in September 2013 and then again this month. That raised the price of petrol and diesel, stirring public debate on inflation and living costs. The subject is growing ever more tender as Malaysia heads towards implementing a 6 percent goods and services tax in April next year. Economists say a window has opened up for Southeast Asia to consider dismantling subsidies as global crude prices sink to multi-year lows. But instead of biting the bullet and pledging more market-oriented fuel prices, Malaysia earlier this week proposed tweaking its subsidy system. Second Finance Minister Ahmad Husni Hanadzlah said on Monday that the government is considering implementing a three-tier fuel subsidy mechanism next year under which some of the population will be fully subsidized and some not at all, depending on how much people earn a month. Critics of Prime Minister Najib Razak’s economic stewardship say it is a tactic to ensure that the majority of society continues to be subsidized, especially poor but politically important states such as Sabah. “The whole idea of subsidies is you target the lower income, and the sad thing is subsidies are also a reward program,” said James Chin, a professor of political science at the Malaysian campus of Australia’s Monash University. Under the proposed tiered mechanism, individuals earning less than 5,000 ringgit a month will be eligible for a full subsidy. Those earning between 5,000 and 10,000 ringgit would get a partial subsidy and those earning more than that would get nothing. But the median monthly salary for Malaysia’s 9.3 million workers stood at 1,500 ringgit last year, according to a government report published in August. That suggests at least half of the population will continue to get fuel subsidies. “The high thresholds and low median income suggest that this scheme will not materially reduce the fuel subsidy bill,” said Chua Hak Bin, a Singapore-based economist at Bank of America Corp. “There is also considerable scope for cheating, such as asking friends or family to fill up petrol, and difficulties in enforcement.” A direct fuel price hike would be more effective, with some of the fiscal savings then re-packaged as handouts to the poor, Chua said. Although the next national elections are not due until 2018, Najib has shown he is conscious of voter support. The prime minister recently said he would cut individual income taxes by between 1 and 3 percentage points next year. “According to voting patterns, most of the poor people tend to vote Barisan (national coalition), so there is a political angle to it,” Chin said of the multi-tier subsidy system. Some consumer groups are also concerned about data security, as the tiered subsidy scheme might involve embedding personal income information onto the chips of identity cards, which Malaysians must carry by law. “It is going to be a lot of issues regarding implementation,” said Lim Guan Eng, chief minister of Penang state, adding that the federal government should conduct full consultations with all parties if it persists with the tiered mechanism. The office of Second Finance Minister Ahmad Husni could not immediately comment. Reuters]]> Malaysia's Prime Minister Najib Razak plans to further liberalize investment in the country by opening the corporate bond market to overseas investors. (Reuters Photo/Vivek Prakash) Malaysia's Prime Minister Najib Razak has been criticized for his government's idea to adopt a tiered fuel subsidy. (Reuters Photo/Vivek Prakash)[/caption] Kuala Lumpur. Malaysia has followed up on two fuel subsidy cuts in the past year with a proposal for a tiered subsidy system that skeptics say will be hard to execute and looks more like an attempt to placate voters griping about living costs. In recent years, Malaysia has shielded its citizens from the full brunt of surging crude oil prices with fuel subsidies of around 24 billion ringgit ($7.34 billion) annually. That has exacerbated the government’s budget deficit, one of the region’s biggest as a proportion of gross domestic product. To shore up its finances, Malaysia cut the subsidies in September 2013 and then again this month. That raised the price of petrol and diesel, stirring public debate on inflation and living costs. The subject is growing ever more tender as Malaysia heads towards implementing a 6 percent goods and services tax in April next year. Economists say a window has opened up for Southeast Asia to consider dismantling subsidies as global crude prices sink to multi-year lows. But instead of biting the bullet and pledging more market-oriented fuel prices, Malaysia earlier this week proposed tweaking its subsidy system. Second Finance Minister Ahmad Husni Hanadzlah said on Monday that the government is considering implementing a three-tier fuel subsidy mechanism next year under which some of the population will be fully subsidized and some not at all, depending on how much people earn a month. Critics of Prime Minister Najib Razak’s economic stewardship say it is a tactic to ensure that the majority of society continues to be subsidized, especially poor but politically important states such as Sabah. “The whole idea of subsidies is you target the lower income, and the sad thing is subsidies are also a reward program,” said James Chin, a professor of political science at the Malaysian campus of Australia’s Monash University. Under the proposed tiered mechanism, individuals earning less than 5,000 ringgit a month will be eligible for a full subsidy. Those earning between 5,000 and 10,000 ringgit would get a partial subsidy and those earning more than that would get nothing. But the median monthly salary for Malaysia’s 9.3 million workers stood at 1,500 ringgit last year, according to a government report published in August. That suggests at least half of the population will continue to get fuel subsidies. “The high thresholds and low median income suggest that this scheme will not materially reduce the fuel subsidy bill,” said Chua Hak Bin, a Singapore-based economist at Bank of America Corp. “There is also considerable scope for cheating, such as asking friends or family to fill up petrol, and difficulties in enforcement.” A direct fuel price hike would be more effective, with some of the fiscal savings then re-packaged as handouts to the poor, Chua said. Although the next national elections are not due until 2018, Najib has shown he is conscious of voter support. The prime minister recently said he would cut individual income taxes by between 1 and 3 percentage points next year. “According to voting patterns, most of the poor people tend to vote Barisan (national coalition), so there is a political angle to it,” Chin said of the multi-tier subsidy system. Some consumer groups are also concerned about data security, as the tiered subsidy scheme might involve embedding personal income information onto the chips of identity cards, which Malaysians must carry by law. “It is going to be a lot of issues regarding implementation,” said Lim Guan Eng, chief minister of Penang state, adding that the federal government should conduct full consultations with all parties if it persists with the tiered mechanism. The office of Second Finance Minister Ahmad Husni could not immediately comment. Reuters]]> http://thejakartaglobe.beritasatu.com/?p=340818 Asia’s Travel and Tourism Industry ‘to Face Talent Crisis’ http://thejakartaglobe.beritasatu.com/?p=340760 Wed, 29 Oct 2014 16:05:50 +0700 Local and foreign tourist take part in releasing sea turtle hatchlings at a beach in Kuta, Bali, Indonesia, 09 April 2013. The sea turtle conservation efforts in Kuta have been conducted since 2002.  EPA/MADE NAGI Local and foreign tourists take part in releasing sea turtle hatchlings at a beach in Kuta, Bali, Indonesia, 09 April 2013. (EPA Photo/Made Nagi)[/caption] Asia’s travel and tourism sector is booming but will faces a severe shortage of skilled workers in the next 10 years, a top industry executive said on Wednesday. Investments in human capital have lagged behind spending on infrastructure such as airports and hotels, said David Scowsill, president and chief executive of the London-based World Travel and Tourism Council. “There’s going to be a great shortage of the right people to support the growth in this particular industry,” he said in Singapore. “We are indeed facing a talent crisis which could impact the quality of our product in the next 10 years... we’ve seen a lot of investments in infrastructure but not a similar investment in human capital.” Scowsill was speaking at a news conference at the start of ITB Asia 2014, a global trade show for the region’s travel market. In a separate press statement, Scowsill said that “if the situation is not addressed immediately, it could have serious consequences on the forecast social and economic growth in many countries across Asia in the next decade”. He said tourism and travel in Asia grew by close to 6 percent last year, creating one million new jobs and generating $ 2 trillion, or around nine percent of the region’s gross domestic product. “Currently travel and tourism employs around 65 million people and supports one in 12 jobs in Asia,” he said, adding that this exceeds some industries like financial services. Neeta Lachmandas, assistant chief executive of the Singapore Tourism Board, said while Asia is a “focal point” in global travel, there were also challenges. “We expect a shortage of some eight million jobs in the next 15-20 years, so there’s a tremendous opportunity for us, but there’s also a lot of challenges that we need to overcome if we want to take advantage of this opportunity,” she said at the news conference. Spending by business travelers worldwide is expected to reach a record high of $1.18 trillion this year, with nearly 40 percent of that coming from the Asia-Pacific, the Global Business Travel Association said in a statement at the trade show. Corporate travelers from China lead the Asian pack, spending $225 billion last year, coming a close second to the United States which topped the world rankings by spending $274 billion. Agence France-Presse]]> Local and foreign tourist take part in releasing sea turtle hatchlings at a beach in Kuta, Bali, Indonesia, 09 April 2013. The sea turtle conservation efforts in Kuta have been conducted since 2002.  EPA/MADE NAGI Local and foreign tourists take part in releasing sea turtle hatchlings at a beach in Kuta, Bali, Indonesia, 09 April 2013. (EPA Photo/Made Nagi)[/caption] Asia’s travel and tourism sector is booming but will faces a severe shortage of skilled workers in the next 10 years, a top industry executive said on Wednesday. Investments in human capital have lagged behind spending on infrastructure such as airports and hotels, said David Scowsill, president and chief executive of the London-based World Travel and Tourism Council. “There’s going to be a great shortage of the right people to support the growth in this particular industry,” he said in Singapore. “We are indeed facing a talent crisis which could impact the quality of our product in the next 10 years... we’ve seen a lot of investments in infrastructure but not a similar investment in human capital.” Scowsill was speaking at a news conference at the start of ITB Asia 2014, a global trade show for the region’s travel market. In a separate press statement, Scowsill said that “if the situation is not addressed immediately, it could have serious consequences on the forecast social and economic growth in many countries across Asia in the next decade”. He said tourism and travel in Asia grew by close to 6 percent last year, creating one million new jobs and generating $ 2 trillion, or around nine percent of the region’s gross domestic product. “Currently travel and tourism employs around 65 million people and supports one in 12 jobs in Asia,” he said, adding that this exceeds some industries like financial services. Neeta Lachmandas, assistant chief executive of the Singapore Tourism Board, said while Asia is a “focal point” in global travel, there were also challenges. “We expect a shortage of some eight million jobs in the next 15-20 years, so there’s a tremendous opportunity for us, but there’s also a lot of challenges that we need to overcome if we want to take advantage of this opportunity,” she said at the news conference. Spending by business travelers worldwide is expected to reach a record high of $1.18 trillion this year, with nearly 40 percent of that coming from the Asia-Pacific, the Global Business Travel Association said in a statement at the trade show. Corporate travelers from China lead the Asian pack, spending $225 billion last year, coming a close second to the United States which topped the world rankings by spending $274 billion. Agence France-Presse]]> http://thejakartaglobe.beritasatu.com/?p=340760