S'pore investors pour money into Indonesia

By Robin Chan

..." /> S'pore investors pour money into Indonesia

By Robin Chan

...">
From Straits Times

S'pore investors pour money into Indonesia

By Robin Chan

SINGAPORE investors are flocking to Indonesia with an eye to tapping its rich commodity reserves and fast-expanding consumer base.

Foreign direct investment (FDI) in the country - once shunned because of its corruption, political unrest and poor infrastructure - rocketed from $508 million in 2006 to $4.4 billion last year, according to International Enterprise (IE) Singapore figures.

And in the second quarter of this year, Singapore investment into Indonesia topped US$1.6 billion ($2.2 billion), according to the Indonesian Investment Coordination Centre, making the city-state its top investor.

This amount spread over 156 projects, formed a large chunk of the US$3.7 billion Indonesia attracted globally during the April to June period this year.

Strong growth, political stability, deep pockets of commodities such as palm oil and timber, and a consumer market that is coming into its own, have boosted Indonesia's attractiveness, making it the newest FDI kid on the block.

Surviving the financial crisis relatively unscathed has 'put the country on the global investment map', according to HSBC economist Wellian Wiranto.

Unlike many others, Indonesia's economy never shrank during the global downturn and grew a faster-than-expected 6.2 per cent in this year's second quarter.

'For that, Indonesia has to thank its 240 million population that stands as a bulwark against adverse global development through private consumption,' he added.

The country's more stable political terrain under President Susilo Bambang Yudhoyono - popularly known as SBY - and improving competitiveness against other emerging nations has also helped.

The government recently eased regulations in sectors like health care and power generation, and is now looking at opening up its property sector further.

All this helped Indonesia jump seven spots to 35th in this year's IMD World Competitiveness Yearbook.

Local companies have footholds in a variety of sectors, including manufacturing, agri-business, warehousing and mid to low-end consumer products.

For example, Fraser & Neave (F&N) recently launched its 100Plus isotonic drink in Indo-nesia.

Mr Koh Poh Tiong, F&N's chief executive for food and beverage, points out that the country has 'tremendous potential'.

'Indonesia is the fourth largest country in the world and the third largest populated country in Asia, after China and India.'

Palm oil giant and Singapore-listed Wilmar Holdings, which recently acquired Sucrogen, the largest producer of refined sugar in Australia and New Zealand, is looking to transform a 200,000ha grassland area - more than three times the size of Singapore - in Indonesia's Papua province into a huge sugar plantation.

Batam island, close to Singapore, is a base for rig builder Sembcorp Marine.

The company is currently expanding its yard at Batam - which builds offshore platforms for oil majors - from 30ha to 52.3ha.

By October this year, it will add two heavy-duty workshops, an extra 20,000-tonne capacity skidway, and extend a load-out jetty from 275m to more than 900m.

But there are still a wealth of opportunities across many product sectors and geographical areas.

'Its domestic markets are not fully tapped and there is still the need for infrastructure investments to sustain growth and to tap the huge reserves of various natural resources,' said Mr Teng Theng Dar, chief executive of the Singapore Business Federation.

Alongside Jakarta's development has been that of the provincial economies centred around regional business hubs such as Surabaya, Medan, Balikpapan, Tanjung Pinang and Makassar.

New growth provinces of the Riau Islands, Gorontalo and the cities of Bandung and Balikpapan in East Kalimantan province have also spurred interest from Singapore businesses, he added.

However, new entrants have come to appreciate that cracking the market can be tricky.

A spokesman for IE Singapore notes that companies wanting to invest in Indonesia should be able to accommodate swift regulation changes and need to allow buffer time given that market entry can be a relatively complex process.

'Indonesia remains largely a relationship-based society, thus for market knowledge and information, it is essential that Singapore companies hit the ground and engage the various stake-holders, potential partners, as well as the business community,' she said.

Meanwhile, Indonesia's economic outlook remains rosy, with experts anticipating strong growth ahead.

OCBC economist Gundy Cah-yadi said: 'We see a good chance that Indonesia will continue to expand at about 6 (per cent) to 6.5 per cent in the next couple of years.'

chanckr@sph.com.sg
From Straits Times<br /> <br /> <span style="font-size: 14pt"><span style="font-weight: bold">S'pore investors pour money into Indonesia</span></span><br /> <br /> By Robin Chan<br /> <br /> SINGAPORE investors are flocking to Indonesia with an eye to tapping its rich commodity reserves and fast-expanding consumer base.<br /> <br /> Foreign direct investment (FDI) in the country - once shunned because of its corruption, political unrest and poor infrastructure - rocketed from $508 million in 2006 to $4.4 billion last year, according to International Enterprise (IE) Singapore figures.<br /> <br /> And in the second quarter of this year, Singapore investment into Indonesia topped US$1.6 billion ($2.2 billion), according to the Indonesian Investment Coordination Centre, making the city-state its top investor.<br /> <br /> This amount spread over 156 projects, formed a large chunk of the US$3.7 billion Indonesia attracted globally during the April to June period this year.<br /> <br /> Strong growth, political stability, deep pockets of commodities such as palm oil and timber, and a consumer market that is coming into its own, have boosted Indonesia's attractiveness, making it the newest FDI kid on the block.<br /> <br /> Surviving the financial crisis relatively unscathed has 'put the country on the global investment map', according to HSBC economist Wellian Wiranto.<br /> <br /> Unlike many others, Indonesia's economy never shrank during the global downturn and grew a faster-than-expected 6.2 per cent in this year's second quarter.<br /> <br /> 'For that, Indonesia has to thank its 240 million population that stands as a bulwark against adverse global development through private consumption,' he added.<br /> <br /> The country's more stable political terrain under President Susilo Bambang Yudhoyono - popularly known as SBY - and improving competitiveness against other emerging nations has also helped.<br /> <br /> The government recently eased regulations in sectors like health care and power generation, and is now looking at opening up its property sector further.<br /> <br /> All this helped Indonesia jump seven spots to 35th in this year's IMD World Competitiveness Yearbook.<br /> <br /> Local companies have footholds in a variety of sectors, including manufacturing, agri-business, warehousing and mid to low-end consumer products.<br /> <br /> For example, Fraser &amp; Neave (F&amp;N) recently launched its 100Plus isotonic drink in Indo-nesia.<br /> <br /> Mr Koh Poh Tiong, F&amp;N's chief executive for food and beverage, points out that the country has 'tremendous potential'.<br /> <br /> 'Indonesia is the fourth largest country in the world and the third largest populated country in Asia, after China and India.'<br /> <br /> Palm oil giant and Singapore-listed Wilmar Holdings, which recently acquired Sucrogen, the largest producer of refined sugar in Australia and New Zealand, is looking to transform a 200,000ha grassland area - more than three times the size of Singapore - in Indonesia's Papua province into a huge sugar plantation.<br /> <br /> <span style="font-weight: bold">Batam island, close to Singapore, is a base for rig builder Sembcorp Marine.<br /> <br /> The company is currently expanding its yard at Batam - which builds offshore platforms for oil majors - from 30ha to 52.3ha.<br /> <br /> By October this year, it will add two heavy-duty workshops, an extra 20,000-tonne capacity skidway, and extend a load-out jetty from 275m to more than 900m.<br /> <br /> </span>But there are still a wealth of opportunities across many product sectors and geographical areas.<br /> <br /> 'Its domestic markets are not fully tapped and there is still the need for infrastructure investments to sustain growth and to tap the huge reserves of various natural resources,' said Mr Teng Theng Dar, chief executive of the Singapore Business Federation.<br /> <br /> Alongside Jakarta's development has been that of the provincial economies centred around regional business hubs such as Surabaya, Medan, Balikpapan, Tanjung Pinang and Makassar.<br /> <br /> New growth provinces of the Riau Islands, Gorontalo and the cities of Bandung and Balikpapan in East Kalimantan province have also spurred interest from Singapore businesses, he added.<br /> <br /> However, new entrants have come to appreciate that cracking the market can be tricky.<br /> <br /> A spokesman for IE Singapore notes that companies wanting to invest in Indonesia should be able to accommodate swift regulation changes and need to allow buffer time given that market entry can be a relatively complex process.<br /> <br /> 'Indonesia remains largely a relationship-based society, thus for market knowledge and information, it is essential that Singapore companies hit the ground and engage the various stake-holders, potential partners, as well as the business community,' she said.<br /> <br /> Meanwhile, Indonesia's economic outlook remains rosy, with experts anticipating strong growth ahead.<br /> <br /> OCBC economist Gundy Cah-yadi said: 'We see a good chance that Indonesia will continue to expand at about 6 (per cent) to 6.5 per cent in the next couple of years.'<br /> <br /> chanckr@sph.com.sg
KuKuKaChu: dangerously too sophisticated
17
views
0
replies
0
followers
live preview
enter atleast 10 characters
WARNING: You mentioned %MENTIONS%, but they cannot see this message and will not be notified
Saving...
Saved
All posts under this topic will be deleted ?
Pending draft ... Click to resume editing
Discard draft

Warning: session_write_close(): Session callback expects true/false return value in Unknown on line 0