industry Archives - SCCI - Singapore Chamber of Commerce Indonesia

27Aug, 2018

China’s July industrial profit growth cools for third straight month

Profit growth for China’s industrial firms cooled for a third straight month in July in a further indication that demand in the world’s second-biggest economy is cooling even as U.S. trade pressure mounts.

Industrial profits in July rose 16.2 percent from a year earlier to 515.12 billion yuan ($74.94 billion), slowing from a 20 percent increase in June, the National Bureau of Statistics (NBS) said on Monday.

Profit growth eased in July as producer price inflation moderates, He Ping of the statistics bureau said in a statement accompanying the data.

For the first seven months of the year, industrial firms have reported profits of 3.9 trillion yuan, up 17.1 percent from the same period last year.

(read more: Reuters)

21Aug, 2018

Japan’s Daikin, thriving in Asia and India, sets sights on Africa

Daikin Industries, (6367.T) the world’s largest maker of air conditioning equipment, is turning to Africa for further expansion, 10 years after a successful gamble on sharing its key technology with a Chinese company.

As Japanese manufacturers such as Panasonic stepped back from home appliances over a decade ago to avoid price wars with Asian rivals, Daikin did the opposite, going head-to-head with the likes of South Korea’s LG (003550.KS).

Fighting off low-cost competitors through local partnerships and acquisitions, Daikin grabbed top share in markets such as India. Africa, where LG and China’s Haier are established giants, may seem like another difficult target for Daikin.

But Yoshihiro Mineno, Daikin’s senior executive in charge of Asia, said the company is used to silencing critics, recalling the controversy more than 15 years ago over its decision to target mass markets overseas.

“Many skeptics at the time said it would be impossible to make profits in the ‘volume zone’ in Asia, and that it was pointless to invest there,” Mineno told Reuters in an interview.

(read more: Reuters)

20Aug, 2018

The Singapore Embassy holds a Singapore National Day reception in Jakarta

Singapore National Day is celebrated every August 9th. In Indonesia, the excitement of Singapore National Day took place a week later, precisely on August 14, 2018. Located at Shangri La Hotel, Jakarta, Ambassador H.E. Anil Kumar Nayar invited Indonesian Minister of Industry Airlangga Hartarto and the audience to toast while celebrating the warmth of Singapore and Indonesia’s diplomatic relations.

Minister Airlangga expressed his appreciation for the trust that Singapore built during the diplomatic relationship. Airlangga also thanked Singaporean business people who had invested in Indonesia, especially for two major projects, namely the construction of ports in Kendal and Digital Park in Batam.

13Aug, 2018

Energy investment in Indonesia less than half of target

In the first half of this year, Indonesia booked US$9.48 billion in investment in the energy and mineral resources sector, only 25 percent of the full-year target of $37.2 billion.

The oil and gas sector contributed the most to the total investment at $5.11 billion, followed by electricity at $2.83 billion.

Meanwhile, the mining and renewable energy sectors recorded a respective $790 million and $750 million in the first half.

Responding to the results, the Energy and Mineral Resources Ministry said in a presentation made available to The Jakarta Post that global energy prices had become one of the main challenges in the past three years.

“The focus ahead is to continue with efforts that simplify regulations, strengthen investment facilities and speed up the process of making strategic decisions,” the ministry said in the presentation.

Energy and Mineral Resources Ministry spokesman Agung Pribadi told the press last Friday that investment in oil and gas would jump significantly in the second half, as was typical.

(source: The Jakarta Post)

13Aug, 2018

Trade spat may burden tire manufacturers

With no end in sight to trade tensions between the United States and China, domestic tire producers may bear the brunt of the spat as a revision to a ministerial regulation has made it easier for tire products to enter the Indonesian market, Fitch ratings agency has said in a statement.

Trade Ministry Regulation No. 6/2018 effectively authorizes imported products, in this case tire products, to be checked outside of customs, as part of the government’s broader effort to debottleneck lines of goods checked in customs areas in a bid to improve efficiency.

“The revised regulation has simplified the procedure for tire imports, and gives incentives to overseas manufacturers to sell more products to Indonesia,” Fitch said in a statement. “The situation is crippled further by the imposed tariffs on China’s exports to the US, including tire-related products, which may force Chinese manufacturers to divert trade to new markets, including Indonesia.”

However, the agency said the recovery of automotive sales in the first half would likely offset the short-term negative impact for local tire manufacturers as both car and motorcycle sales recorded doubledigit growth in the first half.

Trade Ministry data show that tire imports increased to US$158 million in the first half of the year, a 90 percent year-on-year (yoy) increase from the $83 million earned over the same period last year.

“Imported tires would flood the local market if the trade war continues in the long-term, which we believe may further undermine the business profile of local manufacturers that are already in an oversupplied market environment,” Fitch said.

(source: The Jakarta Post)

8Aug, 2018

Indonesia manufacturing industry grows 4.41 percent in Q2

Industry Minister Airlangga Hartarto said the manufacturing industry grew 4.41 percent year-on-year (yoy) in the second quarter of 2018, higher than 3.93 percent growth in the corresponding period, last year.

He said the manufacturing sector contributed 19.33 percent to the country’s gross domestic product (GDP), the largest contributor to the economic expansion.

“The manufacturing sector is the backbone to the country’s economy. Its contribution is between 18 to 19 percent. So, the economic growth depends on the manufacturing sector,” Airlangga said in a press release received by The Jakarta Post on Wednesday.

He explained with its contribution of 11.85 percent, the rubber industry and its related products were the largest contributor to the non-oil and gas sector, followed by the leather and footwear industry (11.38 percent), food and beverage (8.67 percent) as well as textile and garments (6.39 percent).

He said the Idul Fitri holiday and the regional elections had boosted domestic consumption to a number of products like food and beverage, textile and textile products, footwear and printing.

He believed domestic consumption would continue to grow next year thanks to the implementation of both presidential and legislative elections.

According to the Central Statistics Agency (BPS), large- and medium-scale industries grew 4.36 percent yoy in the second quarter, while the small and micro manufacturing sector grew 4.93 percent yoy.

Meanwhile, the purchasing managers index (PMI) of the Indonesian manufacturing sector in July increased to 50.5 from 50.3 in June, indicating faster manufacturing sector expansion.

(Source: The Jakarta Post)

1Aug, 2018

Steel imports in Indonesia will be limited, good news for issuers in the steel sector

The government is attempting to withstand the potential for domestic imports due to the effects of trade wars, including imported steel products. One way is to apply non tariff barriers.

The entry of imported steel products will certainly affect the performance of metal issuers such as PT Krakatau Steel Tbk (KRAS), PT Gunawan Dianjaya Steel Tbk (GDST), PT Beton Jaya Manunggal Tbk (BTON) and PT Saranacentral Bajatama Tbk (BAJA).

Binaartha Parama Securities analyst Muhammad Nafan Aji Gusta said the non-tariff policy of the barrier to be issued by the government aims to protect domestic industrial products. “Because our export level is less than imported, this policy is automatically required by the government to anticipate no deficit on the trade balance,” he said on Tuesday.

Nafan said that as goods such as steel, commodities, food and electronics could be produced domestically, policies to reduce imports needed to be done. “Provided that local entrepreneurs are able to maintain the quality of their products so as to compete in the domestic market,” he explained.

Regarding shares of steel companies, Nafan recommends buying KRAS shares with long-term price target at Rp 755 per share. Tuesday (31/7), KRAS share price recorded Rp 410 per share or down 10.87% from the previous day.

He also recommends buying BTON shares. “As long as price movements stay above the 252 level, we can buy short-to-medium term targets at Rp 344 per share,” Nafan said. BTON share price on Tuesday (31/7), up 2.16% to the level of Rp 284 per share

As for BAJA and GDST, Nafan recommends wait and see because technically the stock movement is still not good.

KRAS Marketing Director Purwono Widodo said the non-tariff barriers policy plan to reduce imports will be a positive sentiment for KRAS. “This will greatly assist KRAS as it will reduce the steel imports indicated by circumvention such as alloy steel from China,” he explained, Tuesday (31/7).

Purwono said, so far there is an increase in steel imports with cheap prices in the form of alloy steel indicated circumvention resulting in unfair trade or damage to domestic market prices.

Prevention can not be in the usual way because they use the loopholes of existing rules. “Well, if there is a government policy aimed at preventing or reducing the imports would certainly help KRAS and the domestic steel industry,” he added.

According to him, the impact of this policy will make the volume of steel imports sold KRAS will be reduced and expected steel prices in the domestic market will return to normal. “Yes, if the import of cheap alloy steel is reduced, then KRAS can maximize the utilization of steel production capacity in the country,” said Purwono.

(Source: Kontan)

1Aug, 2018

Canadian microbreweries are facing a shortage of cans and higher costs

Canadian microbreweries are facing a shortage of cans and higher costs, forcing some to cut beer production after the country imposed retaliatory import duties on U.S. aluminum imports in the busy summer season.

Though Canada is the world’s third biggest aluminum producer and cans are made in the country, beer makers also rely on the import of more than 2 billion cans annually, largely from the United States, Statistics Canada data shows.

So when Canada struck back at the United States’ tariffs on aluminum imports on July 1, and included cans, some craft brewers received notices of higher prices due to the duties while others have been unable to secure their usual supply of aluminum cans.

“It seems like no one has cans to sell,” said Steve Beauchesne, co-founder and chief executive of Beau’s Brewing Co in Ottawa, which sold a quarter of the 6.5 million liters (1.7 million gallons) of beer last year in cans.

“Whether it’s tariff-related or not, clearly some large producers have greatly underestimated their demand so that the suppliers were caught off guard and unable to provide it,” he added. Beauchesne, who declined to name his supplier, expects to run out of cans by mid-August, with their next delivery not expected until September at the earliest.

Grand Prairie, Alberta-based GP Brewing Co resumed production in recent days, following a nearly two-week suspension, after receiving an order from U.S.-based can maker Crown Holdings Inc (CCK.N), GP’s president Matt Toni said. Ninety percent of GP’s beer is sold in cans and Toni cited shortages from supplier Crown Holdings for the disruption.

(Read more: Reuters)

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