Kino Indonesia (KINO) plans to use its IPO fund to acquire small local companies dealing in consumer goods. The company is in discussions with one of the local companies which produces personal and home care products. KINO has set aside a capex of Rp234.5b for the acquisition plans. KINO aims to grow revenue by 40% yoy in 2016, which will be mainly supported by its personal and home care business lines. In the IPO last month, KINO raised Rp868.65b in fresh funds, of which 50% will be used to increase production capacity, 30% to acquire small local companies and 20% to improve working capital.
Ciputra Development: Aims to focus more on developing income streams rather than recurring businesses.
Ciputra Development (CTRA) aims to improve income from existing property projects and new ones to be launched in 2016. About 80% of CTRA’s total income comes from the development of 50 property projects scattered across Indonesia, while the remaining 20% is generated from recurring assets. The company registered 11M15 marketing sales of Rp8.8t, which accounts for 92% of its 2015 target of Rp9.5t. As for 2016, management has not set a marketing sales target yet due to economic uncertainties, the impact of government economic stimulus and the higher Federal Funds Rate.
State Electricty Company (PLN) has secured Rp12t debt from syndicated banks to finance 35GW national power plant projects. The syndicated banks are BRI, Mandiri, BNI, BCA, Indonesia Exim Bank and Sarana Multi Infrastructure. The debt will mature in 10 years + 3 years of grace period. PLN has also received loans worth Rp2.45t from those syndicated banks to finance 85% of its investment in its non-government power plant projects in East Kalimantan with a total capacity of 2×110 MW.
The government has decided to import 2.4m tonnes of corn to meet demand for animal feed in 2016. The corn imports will total 200 thousand tonnes per month. In 2016, corn imports will account for 30% of total feed demand for corn of about 8.6m tonnes, or about 665 thousand tonnes per month. The Ministry of Industry says the corn will be imported from India, Brazil, Thailand and the US, and will be used for animal feed only. Total national demand for corn is 14m tonnes, including 5.2m tonnes for the food industry. According to the Association of Animal Feed Producers (APPI), animal feed production is projected to reach 16.5m tonnes. To meet this demand will require at least 8.3m tonnes of corn with a moisture level of 14%. CEO of Indonesian Bureau of Logistics (Bulog) says Bulog has obtained the licence from the government to import corn. Bulog will import 600,000 tonnes of corn in 1Q16. The Economic Affairs Coordinating Minister says corn imports are necessary as domestic corn production is insufficient to fulfil domestic demand. The government will monitor actual corn imports every three months as corn is harvested every three months.
The Ministry of Civil Works and Public Housing (MCW) is targeting Rp30t of new contracts to be signed by Jan 16. This accelerated contracts signing represents nearly 30% of its Rp104.08t budget for 2016. Some 3,000 out of its 10,000 projects for 2016 have been tendered and reaching 3,500 by Jan 16 should not be an issue. For 2016, MCW’s total budget is Rp104.08t with the following breakdown:
1. Directorate General of Water Resources: Rp30.4 t.
2. Bina Marga (roads): Rp45.2t.
3. Cipta Karya (human settlements): Rp17.8t.
4. Directorate General of Housing: Rp7.7t.
Total capital spending for MCW in 2016 is Rp90t. As of 16 Dec 15, MCW has spent Rp94.25t, or about 79.06% of its 2015 budget of Rp118t.
Bank Indonesia (BI) projects overall loan growth in the banking industry to reach 10% by year-end. In 8M15, loan growth in the industry reached 10.4%, slightly lower than the 11.1% in 9M15. According to BI’s Executive Director of economic and monetary policy, loan growth is expected to remain flat till the end of the year, slightly lower than BI’s target of 11-13%. BI’s loan growth projection for 2016 remains at 12-14% and GDP growth estimate remains in the range of 5.2-5.6%. BI has indicated that there is room for monetary expansion, either by reducing the BI reference interest rate or the minimum current account statutory reserves requirement (GWM).
Semen Indonesia (SMGR) predicts that the sales volume of cement in Dec 15 could grow 5% yoy to 26.5m tonnes. In Nov 15, SMGR booked 2.29m tonnes (-3.8% mom) in sales volume, bringing 11M15 sales volume to 23.99m tonnes (-0.3%yoy). The company is building new cement factories in East Nusa Tenggara and Nangroe Aceh Darussalam.
Sampoerna Agro (SGRO) will commence the operation of two biogas power plants in South Sumatera with a capacity of 2MW each. The company will supply 10% of the electricity generated to plantation areas and the remaining 90% to the residents living around the power plants as one of the company’s corporate social responsibility programmes. SGRO has invested US$7m to build the power plants with funds from internal cash. The company expects volume production to grow 15% yoy in 2015 as the El Nino impact is not as bad as that seen in 2014.
Sudirman Said, Minister of Energy and Mineral Resources (ESDM), yesterday inaugurated tank terminal facilities in Bitung in North Sulawesi, Palaran in East Kalimantan and Gabion in Medan, as well as the expansion of tank terminals in Banjarmasin in South Kalimantan and Pontianak in West Kalimantan. The inauguration ceremony was held in Bitung in North Sulawesi and was attended by the Governor of North Sulawesi, Head of BPH Migas, Mayor of Bitung, high-ranking officials from the ESDM along with the Board of Commissioners and Directors of AKR Corporindo (AKRA). Additional capacity added to the terminals inaugurated today will strengthen the logistics and supply chain network of AKRA, which is a reputable private-sector distributor of petroleum and basic chemicals, and support the company’s growth in Eastern Indonesia. The Bitung Tank terminal commissioned has a storage capacity of 30,500 Kilo litres (KL), the Palaran new tank terminal 15,000 KL and the Gabion Medan new terminal 15,000 KL. Furthermore, with expansion of existing storage tanks in Pontianak of 19,500 KL and in Banjarmasin of 10,000 KL, the overall storage capacity of AKR will increase to 656,000 KL spread across 15 locations in Indonesia. The company has invested Rp1,031b in building the new terminals and expanding the tank storage facilities.
State-owned O&G company Pertamina booked a net profit of US$1.39b in 10M15, driven by cost efficiency initiatives. CEO Dwi Soetjipto said the efficiency in opex has reached US$1b. EBITDA margin has reached 10.8% in mid-15, the highest in the past three years, amid declining oil prices. Dwi said the major challenge from the declining oil prices can be overcome with proactive initiatives with five strategic priorities: a) development of the upstream sector, b) efficiency in all business lines, c) increase refinery and petrochemical capacities, d) development of infrastructure and marketing, and e) improvement in its financial structure. Pertamina’s O&G production has reached 584.000 barrel of oil equivalent per day (boepd) in 10M15, up 11.3% yoy. Pertamina is serious in developing its gas and renewable energy businesses. Its gas infrastructure now includes Arun LNG receiving and regasification facilities, Donggi-Senoro LNG plant and gas pipelines of 1,956km.