Indonesia-Thailand Business Opportunities Syafrudin Yahya Commercial Attache Embassy of the Republic of Indonesia

International Trade Day Bangkok, 26 March, 2010

THE WORLD ECONOMIC & TRADE CONDITION

4

World Economic Growth 15%

10%

5%

0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 -5%

2006

2007

2008

2009

2010

2011

-10%

World

Advanced economies

Emerging economies

Sumber: World Economic Outlook, IMF (diolah)

The global economic recovery is more stronger than previously predicted, but there is a different pace between developed and emerging economies ( RRT, India dan Indonesia). Developed economies experience deep declining and slower recovery. In 2010 worls economic growth is predicted at 4%. 5

Estimation of Economic Growth of Some ASEAN Countries % 14.00 12.00 10.00 8.00 6.00

Country

2007

2008

2009

2010

2011

2012

2013

2014

China

13.01

9.01

8.50

9.03

9.73

9.84

9.77

9.51

India

9.37

7.35

5.36

6.42

7.28

7.63

7.99

8.08

Indonesia

6.28

6.06

3.99

4.75

5.00

5.50

6.00

6.30

Korea

5.11

2.22

(0.99)

3.55

5.20

4.97

4.66

4.54

Malaysia

6.18

4.63

(3.63)

2.52

4.05

5.50

6.00

6.00

Philippines

7.08

3.84

0.99

3.21

3.80

4.50

4.50

4.50

Thailand 4.93 2.59 (3.46) 3.71 4.50 5.00 6.00 Source: International Monetary Fund, World Economic Outlook Database, October 2009

6.00

4.00 2.00 (2.00)

2007

2008

2009

2010

2011

2012

2013

2014

(4.00)

(6.00) China

India

Indonesia

Korea

Malaysia

Philippines

Thailand

Keterangan:

kolom warna hijau merupakan angka estimasi

Indonesian economic growth for period of 2010 – 2014 is predicted growing higher than Malaysia, Philipines, and Thailand. RRT growth by 8-9 percent and India 7-8 percent.

6

Indonesia Economic Performance • Economic Growth: 4,5% di 2009 (Q4 5,4%) supported by Household Consumption 4%, Govt. Expenditure 17%, net Export 10,6% • Rupiah Strengthen by 15.4% (2009). JanFeb 2010 1,3% • Foreign Reserve: $66,1 Billion (Des 2009) Inflation Rate: 2,78% 2009, Jan 2010 0,84% • Trade: Export Value $116,5 Billion, Net Export $19,6 Billion 7

MACRO ECONOMIC TARGET 2010 Economic Growth 5,5% Pengeluaran Konsumsi Rumah Tangga

5,0

Konsumsi Pemerintah

7,6

Inv estasi/PMTB

7,8

Ekspor

13,2

Impor

16,4 PDB

SEKT OR

2010

5,5

2010*

1. Pertanian, Peternakan, Kehutanan dan Perikanan

4,2

2. Pertambangan dan Penggalian

2,3

3. Industri Pengolahan

3,7

4. Listrik, Gas, dan Air Bersih

14,0

5. Konstruksi

7 ,2

6. Perdagangan, Hotel, dan Restoran

4,4

7 . Pengangkutan dan Komunikasi

14,8

8. Keuangan, Real Estat, dan Jasa Perusahaan

5,5

9. Jasa-jasa

6,5

PRODUK DOMEST IK BRUT O

5,5

• Inflation Rate : 5,5%  5,7% • Unemployment Rate : 7,5% – 8% • Poverty Rate : 12% – 13,5% 8

INDONESIAN COMPETITIVENESS IN THE GLOBAL MARKET

9

Indonesia Global Competitiveness Index 2010

Logistic Performance Index 2010

Source: Global Competitiveness Report (2009-2010

Source: Logistic Performance Index 2010 Ket.: Negara yang disurvai sejumlah 155

10

Business Regulations Indonesia’s Relative Position 2010

Competitive Disadvantages Relative to GDP per Capita

Competitive Advantages Relative to GDP per Capita

Country Ranking Country Ranking

Starting a Business

161

Protecting Investors

41

Enforcing Contracts

146

Trading Across Borders

45

Employing Workers

149

Closing a Business

142

OVERALL (Ease of Doing Business)

122

Paying Taxes

126

Getting Credit

113

Dealing with Construction Permits

61

Registering Property

95

In 2006, Indonesia ranks 115th out of 155 countries In 2009, Indonesia ranks 129th out of 181 countries In 2010, Indonesia ranks 122th out of 183 countries Source: World Bank, Doing Business (2010)

11

The World Competitiveness 60 50 40 2008

30

2009 20 10 0 USA

Hongkong Singapura Malaysia Taiwan Thailand Indonesia Filipina Hungaria

Turki

Italia

Yunani

2008

COUNTRY

2009

1

USA

1

3

Hong Kong

2

2

Singapore

3

19

Malaysia

18

13

Taiwan

23

27

Thailand

26

51

Indonesia

42

40

Filipina

43

38

Hungary

45

48

Turkey

47

46

Italia

50

42

Grace

52

Governance Selected Countries, 2008 Categories sorted by Indonesia’s rank 100

Government Effectiveness Regulatory Quality Voice and Accountability Control of Corruption Rule of Law

Percentile Rank

Political Stability

50

0 Singapore Source: World Bank (2008)

Malaysia

Brazil

Mexico

India

Thailand

China

Phillipines

Indonesia

Sorted by average rank across all six categories

Dalam hal good governance, unsur yang cukup baik di Indonesia adalah government effectiveness, regulatory quality, dan voice and accountability. 13

Telecommunication Infrastructure of Indonesia Compare to Other Countries, 2008 140

Main Telephone Lines

per 100 inhabitants

120

100

Mobile Cellular Subscriptions Internet Users

80 60 40 20 0

Sumber: ITU

Perkembangan sarana telekomunikasi Indonesia memang semakin baik, terutama jumlah pengguna telepon selular. Perkembangan ini merupakan dampak dari adanya reformasi yang pesat pada sektor telekomunikasi. Namun jika dibandingkan dengan negara-negara lain, Indonesia masih tertinggal. 14

Trend Share of Indonesian Export in the World Market Pangsa Pasar Ekspor Dunia

1.20% 1.00% 0.80% Goods 0.60% Services 0.40% TOTAL 0.20%

19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08

0.00%

Note:

Services data for 2004-2007 was retrieved from ITC. Services data for 2008 is estimated by TREDA

Source: WTO,ITC

Indonesian share to total world export has been increasing from 0,8% (US$ 71,6 Billion) in 2004 to 0,9% (US$ 137,0 Billion) in 2008. 15

ECONOMIC AND TRADE PERFORMANCES

16

TRADE BALANCE

17 Dit. KSB-I

Surplus of Trade Balance in 2009 • Declining in export by 15% during 2009 and declining in import recorded as 25% contribute to surplus of trade balance by 151% (US$ 19.6 billion) in 2009 • For Non- oil & gas surplus was 11% in 2009.

Neraca Perdagangan Indonesia (Miliar US$) 14.0 12.0 10.0 8.0 6.0 4.0 2.0 -

Jan'08 Peb

Mar

Apr

Mei

Jun

Jul

Ekspor

Ags

Sep

Okt

Nop

Des Jan'09 Feb

Impor

Mar

Apr

Mei

Juni

Neraca

Juli

Ags

Sept

Okt

Nop

Des

18

Sumber: BPS (diolah) Dit. KSB-I

EXPORT PERFORMANCE

19 Dit. KSB-I

Indonesian Non-oil & gas Export Experience Positive Trend • Export Non- Oil & Gas Quartal IV 2009 increased by 1.3% or US$ 331 million better compare to quartal IV 2008 (Grafik 2). • Increasing of non oil & gas export mainly contributed by export of mineral fuel 21.6%, vegetable oil & fat 106,7%, machinery & equipment 6,0%, iron ores 62,4% and rubber and rubber products 17,1%. • Increasing also contributed by better price of the world main commodities, unfavourable climate that affact sworld supply, and increasing demand come from some countries such as China and India.

Ekspor Non Migas Indonesia

Persen

US$ Miliar

12

80

Growth rate (yoy) 10

60

Moving p.a annual growth rate

8

40

6

20

4

0

Growth rate (m to m) 2

-20

0

-40 Jan'08 Feb

Mar

Apr

Sumber: BPS (diolah)

Mei

Jun

Jul

Ags

Sept

Okt

Nov

Des Jan'09 Feb

Mar

Apr

Mei

Juni

Jul

Ags Sept

Okt

Nov

Des

20 Dit. KSB-I

INDONESIAN MAIN EXPORT PRODUCT • Export product more varieties: Indonesia export has been dominated by natural base products, but their contribution to total export was declining, on the other hand export of processing products increasing. • Export of vegetable oil during Dec 2009 increase by 106,3% that was triggered by increasing price of CPO (9,1%) due to increasing demand in China and India and declining production of CPO from Malaysia.

Produk Ekspor Utama Indonesia, Jan-Des 2009 (US$ Juta) Kakao/coklat

Alas kaki Des

Nov Okt

Barang-barang rajutan

Sept

Ags Juli

Pakaian jadi bukan rajutan

Juni Mei Apr

Mesin-mesin/Pesawat Mekanik

Mar Feb Jan

Karet dan Barang dari Karet

Bijih, Kerak, dan Abu logam

Mesin/peralatan listrik

Lemak & minyak hewan/nabati

Bahan bakar mineral

Sumber: BPS (diolah)

21 0

200

400

600

800

1000

1200

1400

1600

1800

2000

2200

Dit. KSB-I

INDONESIA : MAIN EXPORT DESTINATION • Still high concentrated on 8 main market; • ASEAN the biggest market, account for more than 20% ; • During December 2009, export to main market such as US, UE, ASEAN, China, increasing after experience decline the month earlier. Negara Tujuan Ekspor Utama Indonesia (Juta US$)

Pertumbuhan (%) 38.89

TAIWAN 65.58

KOREA SELATAN -10.74 AUSTRALIA

Des Nov

12.80

Okt

AMERIKA SERIKAT

Sept Ags

32.27

Juli

JEPANG

Juni Mei

36.53

Apr

CHINA

Mar Feb

23.96

Jan

UNI EROPA 17.57 ASEAN

0

200 400 600 800 1000 1200 1400 1600 1800 2000 2200

Sumber: BPS (diolah)

-60

-40

-20

0

20

40

60

80

100

120

22 Dit. KSB-I

Shifting of Indonesia Export Destination 2004-2009 • Indonesian export destination as been shifting from traditional countries to non-traditional countries. Share of UE, US, and Japan tend to decline and move to China, India and some other countries. Share Negara Tujuan Ekspor Non Migas Jan-Des 2004

Share Negara Tujuan Ekspor Non Migas Jan-Des 2009

Lainnya 20,6%

Lainnya 21,9%

UNI EROPA 16,1% THAILAND 2,8%

UNI EROPA 13,9%

THAILAND 2,7%

TAIWAN 2,7%

AMERIKA SERIKAT 14,8%

KOREA SELATAN 3,3%

AMERIKA SERIKAT 10,7%

TAIWAN 2,9% JEPANG 12,3%

INDIA 3,8%

KOREA SELATAN 5,3%

MALAYSIA 5,1% REP.RAKYAT CINA 6,1%

Sumber: BPS (diolah)

JEPANG 15,0% SINGAPURA 9,6%

INDIA 7,2%

SINGAPURA 8,2% MALAYSIA 5,8%

REP.RAKYAT CINA 9,1%

23 Dit. KSB-I

IMPORT PERFORMANCE

24 Dit. KSB-I

Import Performance 2009 • Total non- oil & gas import 2009 indicated an declining trend compare to 2008, mainly contributed by slowdown in import of consumer goods and raw material. • Total non- oil & gas import for 2009 declined to US$ 77,9 billion, lower 21,1% compare to 2008

Impor Non Migas Indonesia US$ Miliar

Persen

10

140

9

120

Growth rate (yoy)

8

100 Moving p.a annual growth rate

7

80

6

60

5

40 Growth rate (m to m)

4

20

3

0

2

-20

1

-40

0

-60 Jan'08 Feb

Mar

Apr

Sumber: BPS (diolah)

Mei

Jun

Jul

Ags Sept

Okt

Nov

Des Jan'09 Feb

Mar

Apr

Mei

Juni

Jul

Ags Sept

Okt

Nov

Des

25 Dit. KSB-I

Import Commodities is Shifting Share of consumer good and raw materials experience a declining, capital good incresing.

Consumption goods 7%

Consumption goods 8%

Capital goods 14%

Raw materials 78%

2004 Sumber: BPS (diolah)

Capital goods 21%

Raw materials 72%

2009 26 Dit. KSB-I

Import of Non- Oil & Gas Structure by Country of Origin • Import share of Indonesia has been change; • Domination of US and Japan are declining, shifting to China and Australia. • Import share from ASEAN and UE tend to constant.

2009

2004 Jepang 19.26%

UE 12.12%

China 7.90%

Amerika Serikat 19.00%

Korea Selatan 4.24% Australia 2.66%

ASEAN 26.41%

Taiwan India 3.56% 4.86%

Jepang 14.38%

UE 12.67%

ASEAN 26.43%

China 19.77%

Amerika Serikat 10.31% Korea Selatan 5.58% Australia 4.95% Taiwan 2.94%

India 2.98%

Sumber: BPS (diolah) 27 Dit. KSB-I

INDONESIA ECONOMIC INDICATORS

28 Dit. KSB-I

Indonesian Economics Indicators Economic Indicators

2005 2006 2007 2008

2009

Economic growth

5.69

5.50

6.28

6.06

4.5

-Without oil and gas

6.57

6.11

6.87

6.52

4.9

Inflation y.o.y

17.11

6.6

6.59

11.06

2.78

BI rate

12.75

9.75

8.00

9.25

6.50

Rupiah exchange rate (Rp/US$)

9,830

9,020

9,419

10,950

9,698

34.72

42.59

56.92

51.64

66.10

Current account (% of GDP)

0.1

2.9

2.4

0.1

1.9

Budget Defisit (%GDP)

0.5

0.9

1.3

0.1

1.6

Government debt (% of GDP)

46.5

39.2

35.5

33.3

n.a.

-% of GDP

46.1

34.9

31.2

28.9

30.8

-Debt Service Ratio (%)

17.3

24.8

19.4

18.1

22.7

Unemployment rate (%)

11.24

10.28

9.11

8.39

8.14

Poverty Rate (%)

15.97

17.75

16.58

15.42

n.a.

External Foreign reserves (US$ billion)

Foreign debt

Source: BPS, BI (processed by Dit. KSB-I)

29 Dit. KSB-I

INDONESIA ECONOMIC INDICATORS • 2009 economic growth 4,5% supported government expenditure and consumption • 2010, growth is expected at 5,5% driving by export and investment. • Inflatiuon 2009 range between 2,9% 3%, in 2010 increase to 5% - 6%, but it will not affect purchasing power significantly. 30 Dit. KSB-I

INDONESIA ECONOMIC INDICATORS • Prospect of Indonesian economy for 2010 is better than 2009, due to global economic recovery and improvement in investment climate. •

Some Challenges: should be consider risk of adverse wave of global capital; increasing price of primary commodities (crude oil); and budget deficit of some developed economies.

31 Dit. KSB-I

The World Competitiveness 60 50 40 2008

30

2009 20 10 0 USA

Hongkong Singapura Malaysia Taiwan Thailand Indonesia Filipina Hungaria

Turki

Italia

Yunani

2008

COUNTR Y

2009

1

USA

1

3

Hong Kong

2

2

Singapore

3

19

Malaysia

18

13

Taiwan

23

27

Thailand

26

51

Indonesia

42

40

Filipina

43

38

Hungary

45

48

Turkey

47

46

Italia

50

42

Grace

52

COMPARATIVE ADVANTAGES (NATURAL RESOURCES) • No 1 world‘s largest producer of Crude Palm Oil (17 mil ton)

•No. 3 world‘s largest producer of cocoa (520 million ton/year) • No. 2 world’s largest producer of Tin • No. 4 world’s largest producer of Copper • No. 5 world’s largest producer of Nickel • No. 7 world’s largest producer of Gold • No. 7 world’s largest producer of Coal and the most prominent steam coal exporter

2. Agro Industry (Palm Oil) Potency Land Area CPO Production

5.15 million ha 20 million ton

Development 10.65

million ha

35 million ton

Employment (1 person/ha)

5,15 million persons

10,6 million persons

Value Chain (US$.800/ton)

US$. 13,6 billion

US$. 28 billion

Trade Performance: Thailand-Indonesia in 2009 VALUE (in US$ billion) • • • •

Thailand exports to Indonesia Thailand imports from Indonesia Indonesia trade deficit with Thailand Total Trade

• • • • • •

Exports : -26,2% Imports : -29.7% 2010 (January in million US$) Exports : 537 97.4%) Imports : 425 (94.0%) Thailand Surplus : 112

• GROWTH compare to 2008

: 4,667 : 3,800 : 867 : 8,467

Imports Thailand from Indonesia 2009 (Dalam ribu US dollar)

Januari-Desember

No.

HS (4 DIGIT)

1

2701(KG)

COAL ; BRIQUETTES, OVOIDS AND SIMILAR SOLID FUELS MANUFACTURED FROM COAL

852,838

670,953

-21.32

2

2709(LT)

PETROLEUM OILS AND OILS OBTAINED FROM BITUMINOUS MINERALS, CRUDE

401,506

539,835

34.45

3

7403(KG)

REFINED COPPER AND COPPER ALLOYS, UNWROUGHT

333,980

236,859

-29.08

4

8708(KG)

PARTS AND ACCESSORIES OF THE MOTOR VEHICLES OF HEADING

196,650

176,235

-10.38

5

0303(KG)

FISH, FROZEN, EXCLUDING FISH FILLETS AND OTHER FISH MEAT OF HEADING

190,357

133,188

-30.03

6

8001(KG)

UNWROUGHT TIN

195,224

130,239

-33.29

7

8409(KG)

PARTS SUITABLE FOR USE SOLELY OR PRINCIPALLY WITH THE ENGINES OF HEADING

132,396

112,389

-15.11

8

7408(KG)

COPPER WIRE

115,077

91,660

-20.35

9

8501(NO)

ELECTRIC MOTORS AND GENERATORS (EXCLUDING GENERATING SETS)

111,529

59,946

-46.25

10

8414

64,739

51,121

-21.04

Uraian

AIR OR VACUUM PUMPS, AIR OR OTHER GAS COMPRESSOR AND FANS

2008

2009

Perubahan 08-09

TOTAL IMPOR THAILAND DARI INDONESIA SOURCE: INFORMATION AND COMMUNICATION TECHNOLOGY CENTER WITH COOPERATION OF THE CUSTOMS DEPARTMENT

4,766,721

Exports Thailand to Indonesia 2009 (Dalam ribu US dollar)

Januari-Desember

No.

HS (4 DIGIT)

Uraian

1

8703

MOTOR CARS AND OTHER MOTOR VEHICLES PRINCIPALLY DESIGNED

613,204

393,024

-35.41

2

1701(KG)

CANE OR BEET SUGAR AND CHEMICALLY PURE SUCROSE, IN SOLID FORM

449,608

333,749

-25.58

3

8708(KG)

PARTS AND ACCESSORIES OF THE MOTOR

570,725

295,020

-48.30

4

8409(KG)

PARTS SUITABLE FOR USE SOLELY

208,566

172,189

-17.44

5

8714

INDUSTRIAL OR LABORATORY FURNACES

209,876

158,604

-24.43

6

8415

AIR CONDITIONING MACHINES, COMPRISING

145,560

141,852

-2.55

7

8704

MOTOR VEHICLES FOR THE TRANSPORT OF GOODS

286,523

126,360

-55.90

8

2902(KG)

CYCLIC HYDROCARBONS

86,823

108,492

24.96

9

3305(KG)

PREPARATIONS FOR USE ON THE HAIR

79,834

82,637

3.51

10

2710

157,461

74,868

-52.45

PETROLEUM OILS AND OILS OBTAINED FROM BITUMINOUS MINERALS

2008

2009

Perubahan 08-09

TOTAL EKSPOR THAILAND KE INDONESIA SOURCE: INFORMATION AND COMMUNICATION TECHNOLOGY CENTER WITH COOPERATION OF THE CUSTOMS DEPARTMENT

4,695,075

Investment Mining  Non-metallic Products

 Fishery  Food Products

Potential Sectors for Business Integration • Automotive & Auto Parts • Electronics &Electrical Appliances • Agro Industry • Oil & Gas & Petrochemical • Tourism & Services

INDONESIA

TEN MAIN EXPORT PRODUCTS

10 Main Export Products of Indonesia Product

(Export)

Shrimp (US$ 1.1 billion)

Country of Export Destination Japan, Hong Kong, China, Singapore, Malaysia, Australia, Taiwan, Thailand, South Korea, Vietnam, USA, Belgium, England, Spain, French, Canada, Dutch, Italy, German.

Coffee (US$ 0.6 billion)

Brazil, Spain, Italy, Turk, Argentina, USA, England, India, China, Thailand, Japan, Vietnam, Pakistan, Malaysia, Hong Kong, Sri Lanka, Bangladesh, Egypt, Iran.

CPO US$ 4.8 billion)

India, China, Malaysia, Pakistan, Singapore, Bangladesh, Vietnam, Jordania, Tanzania, South Africa, Egypt, Iran, Mozambique, German, Spain, Italy, Turkey, Russia, USA

Cacao

Malaysia, Singapore, Thailand, China, India, Japan, Philippine, Taiwan, Sri Lanka, USA, Brazil, Canada, German, Dutch, Russia, Swiss, Belgium, England, Mali.

(US$ 0.9 billion)

Rubber and Rubber Products (US$ 5.5 billion)

Japan, Malaysia, Philippines, Australia, Thailand, Singapore, Hong Kong, Taiwan, Sri Lanka, South Korea, USA, England, German, Belgium, Italy, Dutch, Canada, PEA, Saudi Arabia, Egypt

10 Main Products of Indonesia Product

Country of Export Destination

Textile and Garment (US$ 9.4 billion)

USA, England, German, Panama, Italy, Canada, Mexico, Dutch, Spain, French, Japan, Australia, Singapore, Hong Kong, Sri Lanka, South Korea, PEA, Saudi Arabia, Ethiopia, Nigeria. Kenya, Tunisia, Sudan

Footwear (US$ 1.6 billion)

USA, Belgium, England, French, Italy, German, Mexico, Spain, Canada, Chili, Panama, Turk, Japan, Malaysia, Thailand, South Korea, Australia, China, HongKong.

Electronics US$ 7.9 billion)

Japan, Taiwan, South Korea, China, Malaysia, Hong Kong, Australia, Singapore, Thailand, Vietnam, German, Dutch, Italy, Belgium, Poland, USA, England, Denmark, French, Yunani.

Motorcycle Components (US$ 1.2 billion)

USA, French, England, German, China, Malaysia, Vietnam, Australia, Hong Kong, Japan, Singapore, Thailand, Sri Lanka, India, Pakistan, Philippine, USA, Canada, Belgium, Turk, PEA, South Africa, Iran, Saudi Arabia

Furniture (US$ 7.8 billion)

USA, French, England, Dutch, Belgium, Spain, German, Italy, Canada, Denmark, Sweden, Japan, Australia, Malaysia, Singapore, South Korean, Taiwan, China, PPEA, South Africa

INDONESIA Ten Export Potential Products

10 Potential Products of Indonesia Products

Country of Export Destination

Handicraft

Australia, Japan, Singapore, Hong Kong, South Korea, PEA, Nigeria, South Africa, Saudi Arabian, USA, England, German, French, Italy, Spain, Dutch, Canada, Belgium.

Fish and Fish Products

Australia, Japan, Singapore, China, Malaysia, Taiwan, Hong Kong, Thailand, South Korea.

Medicinal Herbs

Australia, Taiwan, Singapore, India, Hong Kong, Japan, Malaysia, China, South Korea, Saudi Arabian, PEA, French, German, USA, Russia, Dutch.

Leather and Leather Products

Hong Kong, Vietnam, Singapore, China, Thailand, India, Japan, South Korea, Malaysia, Taiwan, South Africa, Egypt, United of Emirate Arabs, Italy, USA, German, Norway, Spain, England, Brazil.

Processed Food

Singapore, Japan, Malaysia, Philippine, Hong Kong, India, Cambodia, Thailand, Taiwan, Australia, Vietnam, South Korea

10 Potential Products of Indonesia Products

Country of Export Destination

Jewellery

Singapore, Hong Kong, Australia, Japan, PEA, USA, German, England, Italy, Spain.

Essential Oils

Singapore, Malaysia, Thailand, Philippine, Japan, Vietnam, China, Hong Kong, Taiwan, India, Pakistan, PEA, Saudi Arabia, Yemen, Nigeria, Kenya, USA, French, England, Swiss, Spain, Dutch.

Spices

Singapore, United of Emirate Arabs, Morocco, Algeria, Tunisia, USA, Dutch, Brazil, German, Belgium.

Stationary non Paper

Singapore, Australia, Malaysia, Thailand, Hong Kong, Japan, New Zealand, Saudi Arabia, Iran, United of Emirate Arabs, USA, German, Belgium, England, Mexico, Colombia, Sweden.

Medical Instruments and Appliances

Japan, China, Singapore, Pakistan, Malaysia, Hong Kong, Samoa, Maldives, India, Saudi Arabia, United

Investment Opportunities

STEEL INDUSTRY •

CRUDE IRON INDUSTRY “IRON MAKING” (PELLETIZING, PIG IRON & SPONGE IRON INDUSTRIES)

•

CRUDE STEEL INDUSTRY “STEEL MAKING” (CRUDE STEEL INDUSTRIES : SLAB, BILLET, BLOOM)

•

STEEL MILLING INDUSTRY “STEEL ROLLING” (HOT ROLLED COIL/HRC AND COLD ROLLED COIL /CRC)

INVESTMENT OPPORTUNITY IN STEEL INDUSTRY (1) CRUDE IRON INDUSTRY • Currently there is no iron ore processing industry in Indonesia, especially for pellet and pig iron industry. • National demand of iron ore : 2-3 million ton/year (all are still imported). • PT. Krakatau Steel is currently producing sponge iron for their own use to produce crude steel (slab, bloom and billet). CRUDE STEEL INDUSTRY  Currently slab (as raw material of flat product) for crude steel industry is only produced by PT. Krakatau Steel, while for bloom and billet (raw material of long product) are produced by more than 10 domestic producers which most of them located in Java and few in North Sumatera, with an average production capacity utilization of only 49%, so that the national consumption demand is still not met. Thus, the potency for this market is still wide open especially for the same production with higher grade specification and for location out of Java. STEEL MILLING INDUSTRY  While for steel milling production, they are about 20 domestic producers currently concentrating in HRC and CRC products with production capacity utilization no more than 50% and thus this still not meet the demand of national consumption.  Commodities in down-stream steel industry such as profile steel, seam pipe, body structure & chassis and household appliances are predicted will continue growing moderately around 15%/ year, meaning that the demand of HRC and CRC as raw materials will continue to increase.

INVESTMENT OPPORTUNITY IN STEEL INDUSTRY (2) RAW MATERIAL AND SUPPORTING INDUSTRY

 Indonesia has very huge natural endowment of steel raw material, but still not utilized for national steel iron industry development :  Iron ore deposit in Kalimantan Selatan, Kalimantan Timur, along coastline of Jawa and Bali island, north coast of Aceh, west coast of Bengkulu and several area : 2 – 5 billion ton  Iron sand deposit in along coastline of Java island : 170 million ton  Laterit deposit (solid slab which contain iron more than 50%) in Java island : 1 billion ton  Coal: proven 5,8 billion, reserves 7 billion ton which spread in 18 Provinces, Potency of natural resources reach 57 billion ton.  Natural Gas: proven 90.30 TSCF, potency 86.29 TSCF which spread in 10 Provinces. (TSCF=Trillion Standard Cubic Feet)

 Supporting industry as the largest coal producer in Indonesia are PT. Kalimantan Prima Coal, PT. Arutmin, PT. Batubara Bukit Asam  Supporting industry related to gas supply namely PT. Gas Negara, PT. Pertamina, BP Migas, PT. Exxon Mobil, PT. Arco and Direktorat Migas

AUTOMOTIVE INDUSTRY  Promising growth of middle and upper class income segment (18 million people)  Decreasing (lower) interest rate, easing of car lease/loan  15% growth of automotive market demand is forcasted for 2008  Targeted sales of cars (by Ministry of Industry) in 2010 : 1 million units  Attractive market for Passenger cars :  - Sedan : cc < 1.500, 1,500 cc – 3,000 cc  - Multipurpose Vehicles (MPV)  - Double Cabin (light truck) 4x4 or 4x2  Improved industrial estate/zone/special economic zone facilities

AROMATIC CENTRE (1) A. Paraxylene - Potential market : Domestic and Export - Projected by 2010, domestic demand : 1.200.000 tons and domestic production : 666.000 ton - Requires additional production capacity of 534.000 ton/year

B. Orthoxylene - Potential Market : Domestic and Export - Projected by 2010, domestic demand : 798.750 ton and domestic production : 118.800 ton - Requires additional production capacity of + 700.000 ton/year

AROMATIC CENTRE (2) C. Toluena - Potential Market : Domestic and Export - Projected by 2010, domestic demand : 303.050 ton and domestic production : 175.000 ton - Requires additional production capacity of + 120.000 ton/year D. Potential Location Banten Province, East Kalimantan Province, South Sulawesi Province, and East Java Province

PETROCHEMICAL INDUSTRY No

Type of Industry

Indicator

Opportunity

1.

Styrene Monomer

Over supply

Export

2.

PTA

Over supply

Export

3.

Styrene Butadiene Rubber

The capacity and utility are low

Revamping, Investment

4.

Pthalic Anhydride

Domestic demand is low, Capacity is high and utillity is low

Revamping, Export

5.

Polystyrene

Domestic demand is low, high capacity and the utility is low

Revamping, Export

6.

Polyethylene Terepthalate

Domestic demand is low, high capacity, and the utility is low

Revamping, Export

7.

Acrylonitrile Butadiene Styrene

Domestic demand is low, high capacity, and the utility is low

Revamping, Export

8.

Benzene

Small capacity, and high demand

Investment

9.

Paraxylene

Small capacity, and the demand is high

Investment

10.

Ethyle Benzene

Small capacity, and the demand is high

Investment

11.

Alkyl Benzene

Small capacity, and the demand is high

Investment

12.

Styrene Acrylonitrile

Small capacity, and the demand is high

Investment

13.

AB Sulfonate

Small capacity, and the demand is high

Investment

OLEFIN CENTER A. Ethylene - Potential market : domestic and export Projected by 2010, domestic demad : 890.000 ton and domestic production : 485.000 ton - Requires additional production capacity of 400.000.000 ton/ year B. Prophylene - Potential market : domestic and export Projected by 2009 : domestic demad : 1.213.000 ton and domestic production : 485.000 ton - Requires additional production capacity of 1.010.000 ton/year C. Polyethylene - Potential market : domestic and export Projected by 2010, domestic demad : 612.000 ton/year and domestic production : 209.000 ton/year - Requires additional production capacity of + 400.000 ton/year D. Potential Location Banten Province, East Kalimantan Province, South Sulawesi Province, and East Java Province

CPO DERIVATIVES INDUSTRY

A

COCOA PROCESSING INDUSTRY Cocoa grinding :    

cocoa butter cocoa powder cocoa cake Final product, such as Candy, Chocolate

Supporting information: 1. Cocoa Production :  2010 : 865,112 ton  2015 : 1,062,059 ton 2. Existing domestic industry : - 16 cocoa processing industries with capacity 250,000 ton and production 121,300 ton (26.57% of total production of cocoa beans in 2006) 3. Indonesian and ASEAN market : - Domestic consumption per capita: 0.06 kg (13,200 ton per year) - Asia and Oceania consumption per capita : 0.12 kg

Processed Products • • • •

Production Growth Export Growth Domestic Consumption Growth Import Growth

• Real Installed Capacity • Used Capacity

: : : :

7,98 % p.a. 8,08% 6,91%. 4,92%

: 200.000 ton/ year : 180.000 ton/ year

• With the current rate of growth of production, export and consumption, Indonesia needs additional capacity of around : 17,000 – 20,000 ton/year

QUESTIONS

?

For more information please search at • http:\\ www.depdag.go.id • http:\\ www.bkpm.go.id • http:\\ www.nafed.go.id OR contact Indonesian Commercial Attache’ in Bangkok • [email protected] • [email protected]

Indonesia-Thailand Business Opportunities Syafrudin Yahya Commercial Attache Embassy of the Republic of Indonesia

International Trade Day

Bangkok, 26 March, 2010

THE WORLD ECONOMIC & TRADE CONDITION

3

World Economic Growth 15%

10%

5%

0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 -5%

2006

2007

2008

2009

2010

2011

-10%

World

Advanced economies

Emerging economies

Sumber: World Economic Outlook, IMF (diolah)

The global economic recovery is more stronger than previously predicted, but there is a different pace between developed and emerging economies ( RRT, India dan Indonesia). Developed economies experience deep declining and slower recovery. In 2010 worls economic growth is predicted at 4%. 4

Estimation of Economic Growth of Some ASEAN Countries % 14.00 12.00 10.00 8.00 6.00

Country

2007

2008

2009

2010

2011

2012

2013

2014

China

13.01

9.01

8.50

9.03

9.73

9.84

9.77

9.51

India

9.37

7.35

5.36

6.42

7.28

7.63

7.99

8.08

Indonesia

6.28

6.06

3.99

4.75

5.00

5.50

6.00

6.30

Korea

5.11

2.22

(0.99)

3.55

5.20

4.97

4.66

4.54

Malaysia

6.18

4.63

(3.63)

2.52

4.05

5.50

6.00

6.00

Philippines

7.08

3.84

0.99

3.21

3.80

4.50

4.50

4.50

Thailand 4.93 2.59 (3.46) 3.71 4.50 5.00 6.00 Source: International Monetary Fund, World Economic Outlook Database, October 2009

6.00

4.00 2.00 (2.00)

2007

2008

2009

2010

2011

2012

2013

2014

(4.00)

(6.00) China

India

Indonesia

Korea

Malaysia

Philippines

Thailand

Keterangan:

kolom warna hijau merupakan angka estimasi

Indonesian economic growth for period of 2010 – 2014 is predicted growing higher than Malaysia, Philipines, and Thailand. RRT growth by 8-9 percent and India 7-8 percent.

5

Indonesia Economic Performance • Economic Growth: 4,5% di 2009 (Q4 5,4%) supported by Household Consumption 4%, Govt. Expenditure 17%, net Export 10,6% • Rupiah Strengthen by 15.4% (2009). JanFeb 2010 1,3% • Foreign Reserve: $66,1 Billion (Des 2009) Inflation Rate: 2,78% 2009, Jan 2010 0,84% • Trade: Export Value $116,5 Billion, Net Export $19,6 Billion 6

MACRO ECONOMIC TARGET 2010 Economic Growth 5,5% Pengeluaran Konsumsi Rumah Tangga

5,0

Konsumsi Pemerintah

7,6

Inv estasi/PMTB

7,8

Ekspor

13,2

Impor

16,4 PDB

SEKT OR

2010

5,5

2010*

1. Pertanian, Peternakan, Kehutanan dan Perikanan

4,2

2. Pertambangan dan Penggalian

2,3

3. Industri Pengolahan

3,7

4. Listrik, Gas, dan Air Bersih

14,0

5. Konstruksi

7 ,2

6. Perdagangan, Hotel, dan Restoran

4,4

7 . Pengangkutan dan Komunikasi

14,8

8. Keuangan, Real Estat, dan Jasa Perusahaan

5,5

9. Jasa-jasa

6,5

PRODUK DOMEST IK BRUT O

5,5

• Inflation Rate : 5,5%  5,7% • Unemployment Rate : 7,5% – 8% • Poverty Rate : 12% – 13,5% 7

INDONESIAN COMPETITIVENESS IN THE GLOBAL MARKET

8

Indonesia Global Competitiveness Index 2010

Logistic Performance Index 2010

Source: Global Competitiveness Report (2009-2010

Source: Logistic Performance Index 2010 Ket.: Negara yang disurvai sejumlah 155

9

Business Regulations Indonesia’s Relative Position 2010

Competitive Disadvantages Relative to GDP per Capita

Competitive Advantages Relative to GDP per Capita

Country Ranking Country Ranking

Starting a Business

161

Protecting Investors

41

Enforcing Contracts

146

Trading Across Borders

45

Employing Workers

149

Closing a Business

142

OVERALL (Ease of Doing Business)

122

Paying Taxes

126

Getting Credit

113

Dealing with Construction Permits

61

Registering Property

95

In 2006, Indonesia ranks 115th out of 155 countries In 2009, Indonesia ranks 129th out of 181 countries In 2010, Indonesia ranks 122th out of 183 countries Source: World Bank, Doing Business (2010)

10

The World Competitiveness 60 50 40 2008

30

2009 20 10 0 USA

Hongkong Singapura Malaysia Taiwan Thailand Indonesia Filipina Hungaria

Turki

Italia

Yunani

2008

COUNTRY

2009

1

USA

1

3

Hong Kong

2

2

Singapore

3

19

Malaysia

18

13

Taiwan

23

27

Thailand

26

51

Indonesia

42

40

Filipina

43

38

Hungary

45

48

Turkey

47

46

Italia

50

42

Grace

52

Governance Selected Countries, 2008 Categories sorted by Indonesia’s rank 100

Government Effectiveness Regulatory Quality Voice and Accountability Control of Corruption Rule of Law

Percentile Rank

Political Stability

50

0 Singapore Source: World Bank (2008)

Malaysia

Brazil

Mexico

India

Thailand

China

Phillipines

Indonesia

Sorted by average rank across all six categories

Dalam hal good governance, unsur yang cukup baik di Indonesia adalah government effectiveness, regulatory quality, dan voice and accountability. 12

Telecommunication Infrastructure of Indonesia Compare to Other Countries, 2008 140

Main Telephone Lines

per 100 inhabitants

120

100

Mobile Cellular Subscriptions Internet Users

80 60 40 20 0

Sumber: ITU

Perkembangan sarana telekomunikasi Indonesia memang semakin baik, terutama jumlah pengguna telepon selular. Perkembangan ini merupakan dampak dari adanya reformasi yang pesat pada sektor telekomunikasi. Namun jika dibandingkan dengan negara-negara lain, Indonesia masih tertinggal. 13

Trend Share of Indonesian Export in the World Market Pangsa Pasar Ekspor Dunia

1.20% 1.00% 0.80% Goods 0.60% Services 0.40% TOTAL 0.20%

19 94 19 95 19 96 19 97 19 98 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08

0.00%

Note:

Services data for 2004-2007 was retrieved from ITC. Services data for 2008 is estimated by TREDA

Source: WTO,ITC

Indonesian share to total world export has been increasing from 0,8% (US$ 71,6 Billion) in 2004 to 0,9% (US$ 137,0 Billion) in 2008. 14

ECONOMIC AND TRADE PERFORMANCES

15

TRADE BALANCE

16 Dit. KSB-I

Surplus of Trade Balance in 2009 • Declining in export by 15% during 2009 and declining in import recorded as 25% contribute to surplus of trade balance by 151% (US$ 19.6 billion) in 2009 • For Non- oil & gas surplus was 11% in 2009.

Neraca Perdagangan Indonesia (Miliar US$) 14.0 12.0 10.0 8.0 6.0 4.0 2.0 -

Jan'08 Peb

Mar

Apr

Mei

Jun

Jul

Ekspor

Ags

Sep

Okt

Nop

Des Jan'09 Feb

Impor

Mar

Apr

Mei

Juni

Neraca

Juli

Ags

Sept

Okt

Nop

Des

17

Sumber: BPS (diolah) Dit. KSB-I

EXPORT PERFORMANCE

18 Dit. KSB-I

Indonesian Non-oil & gas Export Experience Positive Trend • Export Non- Oil & Gas Quartal IV 2009 increased by 1.3% or US$ 331 million better compare to quartal IV 2008 (Grafik 2). • Increasing of non oil & gas export mainly contributed by export of mineral fuel 21.6%, vegetable oil & fat 106,7%, machinery & equipment 6,0%, iron ores 62,4% and rubber and rubber products 17,1%. • Increasing also contributed by better price of the world main commodities, unfavourable climate that affact sworld supply, and increasing demand come from some countries such as China and India.

Ekspor Non Migas Indonesia

Persen

US$ Miliar

12

80

Growth rate (yoy) 10

60

Moving p.a annual growth rate

8

40

6

20

4

0

Growth rate (m to m) 2

-20

0

-40 Jan'08 Feb

Mar

Apr

Sumber: BPS (diolah)

Mei

Jun

Jul

Ags

Sept

Okt

Nov

Des Jan'09 Feb

Mar

Apr

Mei

Juni

Jul

Ags Sept

Okt

Nov

Des

19 Dit. KSB-I

INDONESIAN MAIN EXPORT PRODUCT • Export product more varieties: Indonesia export has been dominated by natural base products, but their contribution to total export was declining, on the other hand export of processing products increasing. • Export of vegetable oil during Dec 2009 increase by 106,3% that was triggered by increasing price of CPO (9,1%) due to increasing demand in China and India and declining production of CPO from Malaysia.

Produk Ekspor Utama Indonesia, Jan-Des 2009 (US$ Juta) Kakao/coklat

Alas kaki Des

Nov Okt

Barang-barang rajutan

Sept

Ags Juli

Pakaian jadi bukan rajutan

Juni Mei Apr

Mesin-mesin/Pesawat Mekanik

Mar Feb Jan

Karet dan Barang dari Karet

Bijih, Kerak, dan Abu logam

Mesin/peralatan listrik

Lemak & minyak hewan/nabati

Bahan bakar mineral

Sumber: BPS (diolah)

20 0

200

400

600

800

1000

1200

1400

1600

1800

2000

2200

Dit. KSB-I

INDONESIA : MAIN EXPORT DESTINATION • Still high concentrated on 8 main market; • ASEAN the biggest market, account for more than 20% ; • During December 2009, export to main market such as US, UE, ASEAN, China, increasing after experience decline the month earlier. Negara Tujuan Ekspor Utama Indonesia (Juta US$)

Pertumbuhan (%) 38.89

TAIWAN 65.58

KOREA SELATAN -10.74 AUSTRALIA

Des Nov

12.80

Okt

AMERIKA SERIKAT

Sept Ags

32.27

Juli

JEPANG

Juni Mei

36.53

Apr

CHINA

Mar Feb

23.96

Jan

UNI EROPA 17.57 ASEAN

0

200 400 600 800 1000 1200 1400 1600 1800 2000 2200

Sumber: BPS (diolah)

-60

-40

-20

0

20

40

60

80

100

120

21 Dit. KSB-I

Shifting of Indonesia Export Destination 2004-2009 • Indonesian export destination as been shifting from traditional countries to non-traditional countries. Share of UE, US, and Japan tend to decline and move to China, India and some other countries. Share Negara Tujuan Ekspor Non Migas Jan-Des 2004

Share Negara Tujuan Ekspor Non Migas Jan-Des 2009

Lainnya 20,6%

Lainnya 21,9%

UNI EROPA 16,1% THAILAND 2,8%

UNI EROPA 13,9%

THAILAND 2,7%

TAIWAN 2,7%

AMERIKA SERIKAT 14,8%

KOREA SELATAN 3,3%

AMERIKA SERIKAT 10,7%

TAIWAN 2,9% JEPANG 12,3%

INDIA 3,8%

KOREA SELATAN 5,3%

MALAYSIA 5,1% REP.RAKYAT CINA 6,1%

Sumber: BPS (diolah)

JEPANG 15,0% SINGAPURA 9,6%

INDIA 7,2%

SINGAPURA 8,2% MALAYSIA 5,8%

REP.RAKYAT CINA 9,1%

22 Dit. KSB-I

IMPORT PERFORMANCE

23 Dit. KSB-I

Import Performance 2009 • Total non- oil & gas import 2009 indicated an declining trend compare to 2008, mainly contributed by slowdown in import of consumer goods and raw material. • Total non- oil & gas import for 2009 declined to US$ 77,9 billion, lower 21,1% compare to 2008

Impor Non Migas Indonesia US$ Miliar

Persen

10

140

9

120

Growth rate (yoy)

8

100 Moving p.a annual growth rate

7

80

6

60

5

40 Growth rate (m to m)

4

20

3

0

2

-20

1

-40

0

-60 Jan'08 Feb

Mar

Apr

Sumber: BPS (diolah)

Mei

Jun

Jul

Ags Sept

Okt

Nov

Des Jan'09 Feb

Mar

Apr

Mei

Juni

Jul

Ags Sept

Okt

Nov

Des

24 Dit. KSB-I

Import Commodities is Shifting Share of consumer good and raw materials experience a declining, capital good incresing.

Consumption goods 7%

Consumption goods 8%

Capital goods 14%

Raw materials 78%

2004 Sumber: BPS (diolah)

Capital goods 21%

Raw materials 72%

2009 25 Dit. KSB-I

Import of Non- Oil & Gas Structure by Country of Origin • Import share of Indonesia has been change; • Domination of US and Japan are declining, shifting to China and Australia. • Import share from ASEAN and UE tend to constant.

2009

2004 Jepang 19.26%

UE 12.12%

China 7.90%

Amerika Serikat 19.00%

Korea Selatan 4.24% Australia 2.66%

ASEAN 26.41%

Taiwan India 3.56% 4.86%

Jepang 14.38%

UE 12.67%

ASEAN 26.43%

China 19.77%

Amerika Serikat 10.31% Korea Selatan 5.58% Australia 4.95% Taiwan 2.94%

India 2.98%

Sumber: BPS (diolah) 26 Dit. KSB-I

INDONESIA ECONOMIC INDICATORS

27 Dit. KSB-I

Indonesian Economics Indicators Economic Indicators

2005 2006 2007 2008

2009

Economic growth

5.69

5.50

6.28

6.06

4.5

-Without oil and gas

6.57

6.11

6.87

6.52

4.9

Inflation y.o.y

17.11

6.6

6.59

11.06

2.78

BI rate

12.75

9.75

8.00

9.25

6.50

Rupiah exchange rate (Rp/US$)

9,830

9,020

9,419

10,950

9,698

34.72

42.59

56.92

51.64

66.10

Current account (% of GDP)

0.1

2.9

2.4

0.1

1.9

Budget Defisit (%GDP)

0.5

0.9

1.3

0.1

1.6

Government debt (% of GDP)

46.5

39.2

35.5

33.3

n.a.

-% of GDP

46.1

34.9

31.2

28.9

30.8

-Debt Service Ratio (%)

17.3

24.8

19.4

18.1

22.7

Unemployment rate (%)

11.24

10.28

9.11

8.39

8.14

Poverty Rate (%)

15.97

17.75

16.58

15.42

n.a.

External Foreign reserves (US$ billion)

Foreign debt

Source: BPS, BI (processed by Dit. KSB-I)

28 Dit. KSB-I

INDONESIA ECONOMIC INDICATORS • 2009 economic growth 4,5% supported government expenditure and consumption • 2010, growth is expected at 5,5% driving by export and investment. • Inflatiuon 2009 range between 2,9% 3%, in 2010 increase to 5% - 6%, but it will not affect purchasing power significantly. 29 Dit. KSB-I

INDONESIA ECONOMIC INDICATORS • Prospect of Indonesian economy for 2010 is better than 2009, due to global economic recovery and improvement in investment climate. •

Some Challenges: should be consider risk of adverse wave of global capital; increasing price of primary commodities (crude oil); and budget deficit of some developed economies.

30 Dit. KSB-I

The World Competitiveness 60 50 40 2008

30

2009 20 10 0 USA

Hongkong Singapura Malaysia Taiwan Thailand Indonesia Filipina Hungaria

Turki

Italia

Yunani

2008

COUNTR Y

2009

1

USA

1

3

Hong Kong

2

2

Singapore

3

19

Malaysia

18

13

Taiwan

23

27

Thailand

26

51

Indonesia

42

40

Filipina

43

38

Hungary

45

48

Turkey

47

46

Italia

50

42

Grace

52

COMPARATIVE ADVANTAGES (NATURAL RESOURCES) • No 1 world‘s largest producer of Crude Palm Oil (17 mil ton)

•No. 3 world‘s largest producer of cocoa (520 million ton/year) • No. 2 world’s largest producer of Tin • No. 4 world’s largest producer of Copper • No. 5 world’s largest producer of Nickel • No. 7 world’s largest producer of Gold • No. 7 world’s largest producer of Coal and the most prominent steam coal exporter

2. Agro Industry (Palm Oil) Potency Land Area CPO Production

5.15 million ha 20 million ton

Development 10.65

million ha

35 million ton

Employment (1 person/ha)

5,15 million persons

10,6 million persons

Value Chain (US$.800/ton)

US$. 13,6 billion

US$. 28 billion

Trade Performance: Thailand-Indonesia in 2009 VALUE (in US$ billion) • • • •

Thailand exports to Indonesia Thailand imports from Indonesia Indonesia trade deficit with Thailand Total Trade

• • • • • •

Exports : -26,2% Imports : -29.7% 2010 (January in million US$) Exports : 537 97.4%) Imports : 425 (94.0%) Thailand Surplus : 112

• GROWTH compare to 2008

: 4,667 : 3,800 : 867 : 8,467

Imports Thailand from Indonesia 2009 (Dalam ribu US dollar)

Januari-Desember

No.

HS (4 DIGIT)

1

2701(KG)

COAL ; BRIQUETTES, OVOIDS AND SIMILAR SOLID FUELS MANUFACTURED FROM COAL

852,838

670,953

-21.32

2

2709(LT)

PETROLEUM OILS AND OILS OBTAINED FROM BITUMINOUS MINERALS, CRUDE

401,506

539,835

34.45

3

7403(KG)

REFINED COPPER AND COPPER ALLOYS, UNWROUGHT

333,980

236,859

-29.08

4

8708(KG)

PARTS AND ACCESSORIES OF THE MOTOR VEHICLES OF HEADING

196,650

176,235

-10.38

5

0303(KG)

FISH, FROZEN, EXCLUDING FISH FILLETS AND OTHER FISH MEAT OF HEADING

190,357

133,188

-30.03

6

8001(KG)

UNWROUGHT TIN

195,224

130,239

-33.29

7

8409(KG)

PARTS SUITABLE FOR USE SOLELY OR PRINCIPALLY WITH THE ENGINES OF HEADING

132,396

112,389

-15.11

8

7408(KG)

COPPER WIRE

115,077

91,660

-20.35

9

8501(NO)

ELECTRIC MOTORS AND GENERATORS (EXCLUDING GENERATING SETS)

111,529

59,946

-46.25

10

8414

64,739

51,121

-21.04

Uraian

AIR OR VACUUM PUMPS, AIR OR OTHER GAS COMPRESSOR AND FANS

2008

2009

Perubahan 08-09

TOTAL IMPOR THAILAND DARI INDONESIA SOURCE: INFORMATION AND COMMUNICATION TECHNOLOGY CENTER WITH COOPERATION OF THE CUSTOMS DEPARTMENT

4,766,721

Exports Thailand to Indonesia 2009 (Dalam ribu US dollar)

Januari-Desember

No.

HS (4 DIGIT)

Uraian

1

8703

MOTOR CARS AND OTHER MOTOR VEHICLES PRINCIPALLY DESIGNED

613,204

393,024

-35.41

2

1701(KG)

CANE OR BEET SUGAR AND CHEMICALLY PURE SUCROSE, IN SOLID FORM

449,608

333,749

-25.58

3

8708(KG)

PARTS AND ACCESSORIES OF THE MOTOR

570,725

295,020

-48.30

4

8409(KG)

PARTS SUITABLE FOR USE SOLELY

208,566

172,189

-17.44

5

8714

INDUSTRIAL OR LABORATORY FURNACES

209,876

158,604

-24.43

6

8415

AIR CONDITIONING MACHINES, COMPRISING

145,560

141,852

-2.55

7

8704

MOTOR VEHICLES FOR THE TRANSPORT OF GOODS

286,523

126,360

-55.90

8

2902(KG)

CYCLIC HYDROCARBONS

86,823

108,492

24.96

9

3305(KG)

PREPARATIONS FOR USE ON THE HAIR

79,834

82,637

3.51

10

2710

157,461

74,868

-52.45

PETROLEUM OILS AND OILS OBTAINED FROM BITUMINOUS MINERALS

2008

2009

Perubahan 08-09

TOTAL EKSPOR THAILAND KE INDONESIA SOURCE: INFORMATION AND COMMUNICATION TECHNOLOGY CENTER WITH COOPERATION OF THE CUSTOMS DEPARTMENT

4,695,075

Investment Mining  Non-metallic Products

 Fishery  Food Products

Potential Sectors for Business Integration • Automotive & Auto Parts • Electronics &Electrical Appliances • Agro Industry • Oil & Gas & Petrochemical • Tourism & Services

INDONESIA

TEN MAIN EXPORT PRODUCTS

10 Main Export Products of Indonesia Product

(Export)

Shrimp (US$ 1.1 billion)

Country of Export Destination Japan, Hong Kong, China, Singapore, Malaysia, Australia, Taiwan, Thailand, South Korea, Vietnam, USA, Belgium, England, Spain, French, Canada, Dutch, Italy, German.

Coffee (US$ 0.6 billion)

Brazil, Spain, Italy, Turk, Argentina, USA, England, India, China, Thailand, Japan, Vietnam, Pakistan, Malaysia, Hong Kong, Sri Lanka, Bangladesh, Egypt, Iran.

CPO US$ 4.8 billion)

India, China, Malaysia, Pakistan, Singapore, Bangladesh, Vietnam, Jordania, Tanzania, South Africa, Egypt, Iran, Mozambique, German, Spain, Italy, Turkey, Russia, USA

Cacao

Malaysia, Singapore, Thailand, China, India, Japan, Philippine, Taiwan, Sri Lanka, USA, Brazil, Canada, German, Dutch, Russia, Swiss, Belgium, England, Mali.

(US$ 0.9 billion)

Rubber and Rubber Products (US$ 5.5 billion)

Japan, Malaysia, Philippines, Australia, Thailand, Singapore, Hong Kong, Taiwan, Sri Lanka, South Korea, USA, England, German, Belgium, Italy, Dutch, Canada, PEA, Saudi Arabia, Egypt

10 Main Products of Indonesia Product

Country of Export Destination

Textile and Garment (US$ 9.4 billion)

USA, England, German, Panama, Italy, Canada, Mexico, Dutch, Spain, French, Japan, Australia, Singapore, Hong Kong, Sri Lanka, South Korea, PEA, Saudi Arabia, Ethiopia, Nigeria. Kenya, Tunisia, Sudan

Footwear (US$ 1.6 billion)

USA, Belgium, England, French, Italy, German, Mexico, Spain, Canada, Chili, Panama, Turk, Japan, Malaysia, Thailand, South Korea, Australia, China, HongKong.

Electronics US$ 7.9 billion)

Japan, Taiwan, South Korea, China, Malaysia, Hong Kong, Australia, Singapore, Thailand, Vietnam, German, Dutch, Italy, Belgium, Poland, USA, England, Denmark, French, Yunani.

Motorcycle Components (US$ 1.2 billion)

USA, French, England, German, China, Malaysia, Vietnam, Australia, Hong Kong, Japan, Singapore, Thailand, Sri Lanka, India, Pakistan, Philippine, USA, Canada, Belgium, Turk, PEA, South Africa, Iran, Saudi Arabia

Furniture (US$ 7.8 billion)

USA, French, England, Dutch, Belgium, Spain, German, Italy, Canada, Denmark, Sweden, Japan, Australia, Malaysia, Singapore, South Korean, Taiwan, China, PPEA, South Africa

INDONESIA Ten Export Potential Products

10 Potential Products of Indonesia Products

Country of Export Destination

Handicraft

Australia, Japan, Singapore, Hong Kong, South Korea, PEA, Nigeria, South Africa, Saudi Arabian, USA, England, German, French, Italy, Spain, Dutch, Canada, Belgium.

Fish and Fish Products

Australia, Japan, Singapore, China, Malaysia, Taiwan, Hong Kong, Thailand, South Korea.

Medicinal Herbs

Australia, Taiwan, Singapore, India, Hong Kong, Japan, Malaysia, China, South Korea, Saudi Arabian, PEA, French, German, USA, Russia, Dutch.

Leather and Leather Products

Hong Kong, Vietnam, Singapore, China, Thailand, India, Japan, South Korea, Malaysia, Taiwan, South Africa, Egypt, United of Emirate Arabs, Italy, USA, German, Norway, Spain, England, Brazil.

Processed Food

Singapore, Japan, Malaysia, Philippine, Hong Kong, India, Cambodia, Thailand, Taiwan, Australia, Vietnam, South Korea

10 Potential Products of Indonesia Products

Country of Export Destination

Jewellery

Singapore, Hong Kong, Australia, Japan, PEA, USA, German, England, Italy, Spain.

Essential Oils

Singapore, Malaysia, Thailand, Philippine, Japan, Vietnam, China, Hong Kong, Taiwan, India, Pakistan, PEA, Saudi Arabia, Yemen, Nigeria, Kenya, USA, French, England, Swiss, Spain, Dutch.

Spices

Singapore, United of Emirate Arabs, Morocco, Algeria, Tunisia, USA, Dutch, Brazil, German, Belgium.

Stationary non Paper

Singapore, Australia, Malaysia, Thailand, Hong Kong, Japan, New Zealand, Saudi Arabia, Iran, United of Emirate Arabs, USA, German, Belgium, England, Mexico, Colombia, Sweden.

Medical Instruments and Appliances

Japan, China, Singapore, Pakistan, Malaysia, Hong Kong, Samoa, Maldives, India, Saudi Arabia, United

Investment Opportunities

STEEL INDUSTRY •

CRUDE IRON INDUSTRY “IRON MAKING” (PELLETIZING, PIG IRON & SPONGE IRON INDUSTRIES)

•

CRUDE STEEL INDUSTRY “STEEL MAKING” (CRUDE STEEL INDUSTRIES : SLAB, BILLET, BLOOM)

•

STEEL MILLING INDUSTRY “STEEL ROLLING” (HOT ROLLED COIL/HRC AND COLD ROLLED COIL /CRC)

INVESTMENT OPPORTUNITY IN STEEL INDUSTRY (1) CRUDE IRON INDUSTRY • Currently there is no iron ore processing industry in Indonesia, especially for pellet and pig iron industry. • National demand of iron ore : 2-3 million ton/year (all are still imported). • PT. Krakatau Steel is currently producing sponge iron for their own use to produce crude steel (slab, bloom and billet). CRUDE STEEL INDUSTRY  Currently slab (as raw material of flat product) for crude steel industry is only produced by PT. Krakatau Steel, while for bloom and billet (raw material of long product) are produced by more than 10 domestic producers which most of them located in Java and few in North Sumatera, with an average production capacity utilization of only 49%, so that the national consumption demand is still not met. Thus, the potency for this market is still wide open especially for the same production with higher grade specification and for location out of Java. STEEL MILLING INDUSTRY  While for steel milling production, they are about 20 domestic producers currently concentrating in HRC and CRC products with production capacity utilization no more than 50% and thus this still not meet the demand of national consumption.  Commodities in down-stream steel industry such as profile steel, seam pipe, body structure & chassis and household appliances are predicted will continue growing moderately around 15%/ year, meaning that the demand of HRC and CRC as raw materials will continue to increase.

INVESTMENT OPPORTUNITY IN STEEL INDUSTRY (2) RAW MATERIAL AND SUPPORTING INDUSTRY

 Indonesia has very huge natural endowment of steel raw material, but still not utilized for national steel iron industry development :  Iron ore deposit in Kalimantan Selatan, Kalimantan Timur, along coastline of Jawa and Bali island, north coast of Aceh, west coast of Bengkulu and several area : 2 – 5 billion ton  Iron sand deposit in along coastline of Java island : 170 million ton  Laterit deposit (solid slab which contain iron more than 50%) in Java island : 1 billion ton  Coal: proven 5,8 billion, reserves 7 billion ton which spread in 18 Provinces, Potency of natural resources reach 57 billion ton.  Natural Gas: proven 90.30 TSCF, potency 86.29 TSCF which spread in 10 Provinces. (TSCF=Trillion Standard Cubic Feet)

 Supporting industry as the largest coal producer in Indonesia are PT. Kalimantan Prima Coal, PT. Arutmin, PT. Batubara Bukit Asam  Supporting industry related to gas supply namely PT. Gas Negara, PT. Pertamina, BP Migas, PT. Exxon Mobil, PT. Arco and Direktorat Migas

AUTOMOTIVE INDUSTRY  Promising growth of middle and upper class income segment (18 million people)  Decreasing (lower) interest rate, easing of car lease/loan  15% growth of automotive market demand is forcasted for 2008  Targeted sales of cars (by Ministry of Industry) in 2010 : 1 million units  Attractive market for Passenger cars :  - Sedan : cc < 1.500, 1,500 cc – 3,000 cc  - Multipurpose Vehicles (MPV)  - Double Cabin (light truck) 4x4 or 4x2  Improved industrial estate/zone/special economic zone facilities

AROMATIC CENTRE (1) A. Paraxylene - Potential market : Domestic and Export - Projected by 2010, domestic demand : 1.200.000 tons and domestic production : 666.000 ton - Requires additional production capacity of 534.000 ton/year

B. Orthoxylene - Potential Market : Domestic and Export - Projected by 2010, domestic demand : 798.750 ton and domestic production : 118.800 ton - Requires additional production capacity of + 700.000 ton/year

AROMATIC CENTRE (2) C. Toluena - Potential Market : Domestic and Export - Projected by 2010, domestic demand : 303.050 ton and domestic production : 175.000 ton - Requires additional production capacity of + 120.000 ton/year D. Potential Location Banten Province, East Kalimantan Province, South Sulawesi Province, and East Java Province

PETROCHEMICAL INDUSTRY No

Type of Industry

Indicator

Opportunity

1.

Styrene Monomer

Over supply

Export

2.

PTA

Over supply

Export

3.

Styrene Butadiene Rubber

The capacity and utility are low

Revamping, Investment

4.

Pthalic Anhydride

Domestic demand is low, Capacity is high and utillity is low

Revamping, Export

5.

Polystyrene

Domestic demand is low, high capacity and the utility is low

Revamping, Export

6.

Polyethylene Terepthalate

Domestic demand is low, high capacity, and the utility is low

Revamping, Export

7.

Acrylonitrile Butadiene Styrene

Domestic demand is low, high capacity, and the utility is low

Revamping, Export

8.

Benzene

Small capacity, and high demand

Investment

9.

Paraxylene

Small capacity, and the demand is high

Investment

10.

Ethyle Benzene

Small capacity, and the demand is high

Investment

11.

Alkyl Benzene

Small capacity, and the demand is high

Investment

12.

Styrene Acrylonitrile

Small capacity, and the demand is high

Investment

13.

AB Sulfonate

Small capacity, and the demand is high

Investment

OLEFIN CENTER A. Ethylene - Potential market : domestic and export Projected by 2010, domestic demad : 890.000 ton and domestic production : 485.000 ton - Requires additional production capacity of 400.000.000 ton/ year B. Prophylene - Potential market : domestic and export Projected by 2009 : domestic demad : 1.213.000 ton and domestic production : 485.000 ton - Requires additional production capacity of 1.010.000 ton/year C. Polyethylene - Potential market : domestic and export Projected by 2010, domestic demad : 612.000 ton/year and domestic production : 209.000 ton/year - Requires additional production capacity of + 400.000 ton/year D. Potential Location Banten Province, East Kalimantan Province, South Sulawesi Province, and East Java Province

CPO DERIVATIVES INDUSTRY

A

COCOA PROCESSING INDUSTRY Cocoa grinding :    

cocoa butter cocoa powder cocoa cake Final product, such as Candy, Chocolate

Supporting information: 1. Cocoa Production :  2010 : 865,112 ton  2015 : 1,062,059 ton 2. Existing domestic industry : - 16 cocoa processing industries with capacity 250,000 ton and production 121,300 ton (26.57% of total production of cocoa beans in 2006) 3. Indonesian and ASEAN market : - Domestic consumption per capita: 0.06 kg (13,200 ton per year) - Asia and Oceania consumption per capita : 0.12 kg

Processed Products • • • •

Production Growth Export Growth Domestic Consumption Growth Import Growth

• Real Installed Capacity • Used Capacity

: : : :

7,98 % p.a. 8,08% 6,91%. 4,92%

: 200.000 ton/ year : 180.000 ton/ year

• With the current rate of growth of production, export and consumption, Indonesia needs additional capacity of around : 17,000 – 20,000 ton/year

QUESTIONS

?

For more information please search at • http:\\ www.depdag.go.id • http:\\ www.bkpm.go.id • http:\\ www.nafed.go.id OR contact Indonesian Commercial Attache’ in Bangkok • [email protected] • [email protected]