Friday, August 03, 2007
The Jakarta Post, Jakarta
Coal mining contractor PT Darma Henwa plans to sell 3.15 billion new shares during the company's initial public offering (IPO) in early September, a senior company executive says.
Speaking during a public briefing Thursday, Darma Henwa's president director Hamdan Handoko said that the shares, accounting for about 30 percent of its enlarged stock, would be offered to the public from Aug. 28 through 30 at a price range of between Rp 290 and Rp 375 per share
"We expect to raise about US$200 million from the public offering," he said, adding that the shares would be listed on the Jakarta Stock Exchange (JSX) on Sept. 6.
PT Danatama Makmur Investment Bank has been chosen as the lead underwriter.
Hamdan said that the company would use 60 percent of the IPO proceeds to finance the capital expenditure on the development of its Bengalon's project, 50 percent to finance its capital expenditure on the Asam Asam project and the remainder to strengthen its working capital.
Chief commissioner Rini M. Soemarmo said the company had recently signed contracts worth $4.75 billion with PT Kaltim Prima Coal (KPC) and PT Arutmin Indonesia for mining work in Bengalon, East Kalimantan, and Asam Asam in South Kalimantan, respectively.
PT Darma Henwa was established in 1991 and marked its debut with a $100 million contract with BHP Minerals for a project in Petangis, South Kalimantan. The company is 85 percent owned by Zurich Assets International Ltd. and 5 percent by PT Indotambang Perkasa.
With its established track record of working with some of the largest mining firms in the world, such as BHP Billiton, INCO, Rio Tinto, Newmont and Freeport, and its participation in the government's "10,000 Megawatts" project, as well as current high coal prices, Steffen Fang, the vice president of Danatama Makmur said he believed that Darma Henwa's IPO would be attractive to both local and foreign investors.
In the first semester of this year, the company's revenues and net income reached $109 million and $2.5 million, respectively. The company expects to book total revenue of $252 million this year, with net profit amounting to $8.5 million.
Hamdan said that revenue was projected to increase to $317 million in 2008 and $335 million in 2009, while net profit was expected to reach $24 million next year and $44 million in 2009. (02)
Wednesday, August 08, 2007
India and Indonesia promote SME links
Thursday, August 02, 2007
The Jakarta Post, Jakarta
To boost bilateral trade between Indonesia and India, the World Trade Center (WTC) Jakarta is holding an exhibition displaying export-quality products from Indonesia's small and medium enterprises (SME), with the focus being on the Indian market.
The three-day exhibition, titled Indian-Indonesian Trade Fiesta 2007, gathers together exporters, traders and businesspeople from both countries with a view to seeking opportunities for cooperation.
Indian Ambassador to Indonesia Navrekha Sharma said that the event would provide a great boost to the two countries' goal of achieving bilateral trade worth US$10 billion by 2010. This goal was agreed on by President Susilo Bambang Yudhoyono and Indian Prime Minister Manmohan Singh during the former's visit to India in 2005.
"There has been impressive growth in bilateral trade. The total trade between India and Indonesia in 2004 was $3.2 billion, and it rose to $4.798 billion in 2006, which was a jump of 22 percent over the previous year," Sharma said during the opening ceremony for the exhibition Wednesday.
She said that in 2006, India's exports to Indonesia reached $1.4 billion, and Indonesia's exports to India $3.39 billion, with the balance of trade being in favor of Indonesia.
The ambassador said he saw great potential for an SME partnership between India and Indonesia as people to people contacts were increasing and there were major potentials in the fields of tourism, handicrafts, gems and jewelry, furniture, leather goods, cosmetics and textiles.
"With a middle class of more than 300 million, India is a market waiting to be tapped by Indonesian entrepreneurs, who should be eager to sell many value-added products to Indian consumers," said Sharma.
However, she said that there needed to be an appreciable shift in the trade pattern, which remained heavily reliant on raw and unprocessed materials from Indonesia, if the two countries wanted to put their trade on a sustainable path in the long term.
"Garuda Airlines should be more aggressive about exploiting the growing Indian tourist market, which sends millions of tourists to Southeast Asia every year. We send about 400,000 tourists to Malaysia each year, why not to Indonesia, a much bigger country?" asked Sharma.
Besides displaying products such as garments, fashion, leather goods, herbal products, handicrafts and furniture, the event, which is sponsored by global freight forwarder Damco, will also feature seminars on trade and tourism issues, and a short course on how to become an exporter.(02)
The Jakarta Post, Jakarta
To boost bilateral trade between Indonesia and India, the World Trade Center (WTC) Jakarta is holding an exhibition displaying export-quality products from Indonesia's small and medium enterprises (SME), with the focus being on the Indian market.
The three-day exhibition, titled Indian-Indonesian Trade Fiesta 2007, gathers together exporters, traders and businesspeople from both countries with a view to seeking opportunities for cooperation.
Indian Ambassador to Indonesia Navrekha Sharma said that the event would provide a great boost to the two countries' goal of achieving bilateral trade worth US$10 billion by 2010. This goal was agreed on by President Susilo Bambang Yudhoyono and Indian Prime Minister Manmohan Singh during the former's visit to India in 2005.
"There has been impressive growth in bilateral trade. The total trade between India and Indonesia in 2004 was $3.2 billion, and it rose to $4.798 billion in 2006, which was a jump of 22 percent over the previous year," Sharma said during the opening ceremony for the exhibition Wednesday.
She said that in 2006, India's exports to Indonesia reached $1.4 billion, and Indonesia's exports to India $3.39 billion, with the balance of trade being in favor of Indonesia.
The ambassador said he saw great potential for an SME partnership between India and Indonesia as people to people contacts were increasing and there were major potentials in the fields of tourism, handicrafts, gems and jewelry, furniture, leather goods, cosmetics and textiles.
"With a middle class of more than 300 million, India is a market waiting to be tapped by Indonesian entrepreneurs, who should be eager to sell many value-added products to Indian consumers," said Sharma.
However, she said that there needed to be an appreciable shift in the trade pattern, which remained heavily reliant on raw and unprocessed materials from Indonesia, if the two countries wanted to put their trade on a sustainable path in the long term.
"Garuda Airlines should be more aggressive about exploiting the growing Indian tourist market, which sends millions of tourists to Southeast Asia every year. We send about 400,000 tourists to Malaysia each year, why not to Indonesia, a much bigger country?" asked Sharma.
Besides displaying products such as garments, fashion, leather goods, herbal products, handicrafts and furniture, the event, which is sponsored by global freight forwarder Damco, will also feature seminars on trade and tourism issues, and a short course on how to become an exporter.(02)
BNI sale marks RI's biggest offering
Wednesday, August 01, 2007
The Jakarta Post, Jakarta
Bank Negara Indonesia (BNI) and its controlling stakeholder, the government, have raised Rp 8.1 trillion (some US$885 million) selling 3,95 billion shares in the country's third largest bank via a secondary offering.
The sale, which reduces the government's stake in the bank to 73.3 percent from 99.1 percent, marks the country's biggest stock sale by value.
The government sold its shares in the bank at Rp 2,050 per share, State Minister for State Enterprises Sofyan Djalil told a press conference Tuesday. It had targeted a price range of Rp 2,050 and Rp 2,700 per share.
"We had a good response from investors although there was some disturbance in the market. But, it could be better. If only we had privatized BNI a week ago, the price of the shares would have been higher.
"In theory, we said that the timing was very good but the subprime mortgage situation in the U.S. has affected market appetite," Sofyan said, referring to the recent global market turmoil triggered by a Wall Street selloff.
Still, Sofyan said the stock offering, which attracted investors from Asia, the U.S. and Europe, was successful under the circumstances -- something he said reflected investor confidence in the country's economy, banking sector and BNI's prospects.
"By way of comparison, I think the buyer composition is 50:50 as between local and foreign investors."
The sale, arranged by Bahana Securities and JP Morgan, also raised the level of retail shareholding in BNI from less than 1 percent to 26.7 percent.
Of the total proceeds of this year's first divestment, around half would go into the state coffers, Sofyan said, with the rest being used to strengthen BNI's capital structure.
"The government and BNI will each get their share of the money," he explained.
The government has been selling its stakes in state-owned firms and companies it took over during the financial crisis to help plug the annual budget deficit.
Meanwhile, Bahana president director Ito Warsito acknowledged that the global market turmoil recently had affected the outcome of the BNI sale.
"Since last week, the international markets have fallen by 6 percent on average, and this definitely affected both domestic and foreign investors.
"It is not easy to offer as much as this. Some companies such as Chrysler and some other companies in Germany had to downsize their prices," he said.
BNI's shares plunged Rp 200, or 7.5 percent, to close Tuesday at Rp 2,475. (02)
The Jakarta Post, Jakarta
Bank Negara Indonesia (BNI) and its controlling stakeholder, the government, have raised Rp 8.1 trillion (some US$885 million) selling 3,95 billion shares in the country's third largest bank via a secondary offering.
The sale, which reduces the government's stake in the bank to 73.3 percent from 99.1 percent, marks the country's biggest stock sale by value.
The government sold its shares in the bank at Rp 2,050 per share, State Minister for State Enterprises Sofyan Djalil told a press conference Tuesday. It had targeted a price range of Rp 2,050 and Rp 2,700 per share.
"We had a good response from investors although there was some disturbance in the market. But, it could be better. If only we had privatized BNI a week ago, the price of the shares would have been higher.
"In theory, we said that the timing was very good but the subprime mortgage situation in the U.S. has affected market appetite," Sofyan said, referring to the recent global market turmoil triggered by a Wall Street selloff.
Still, Sofyan said the stock offering, which attracted investors from Asia, the U.S. and Europe, was successful under the circumstances -- something he said reflected investor confidence in the country's economy, banking sector and BNI's prospects.
"By way of comparison, I think the buyer composition is 50:50 as between local and foreign investors."
The sale, arranged by Bahana Securities and JP Morgan, also raised the level of retail shareholding in BNI from less than 1 percent to 26.7 percent.
Of the total proceeds of this year's first divestment, around half would go into the state coffers, Sofyan said, with the rest being used to strengthen BNI's capital structure.
"The government and BNI will each get their share of the money," he explained.
The government has been selling its stakes in state-owned firms and companies it took over during the financial crisis to help plug the annual budget deficit.
Meanwhile, Bahana president director Ito Warsito acknowledged that the global market turmoil recently had affected the outcome of the BNI sale.
"Since last week, the international markets have fallen by 6 percent on average, and this definitely affected both domestic and foreign investors.
"It is not easy to offer as much as this. Some companies such as Chrysler and some other companies in Germany had to downsize their prices," he said.
BNI's shares plunged Rp 200, or 7.5 percent, to close Tuesday at Rp 2,475. (02)
PLN signs power project contracts
Wednesday, August 08, 2007
The Jakarta Post, Jakarta
After three months of delays due to a lack of government guarantees for the investors, state-owned electricity company PLN finally signed Tuesday contracts with three Chinese consortiums for the construction of three coal-fired power plants.
The signing of the contracts followed Finance Minister Sri Mulyani Indrawati's assurance Monday that the government would fully guarantee the financing of PLN's crash program to provide additional 10,000 megawatts (MW) of power by the end of 2009.
Speaking to reporters after the signing ceremony, Energy and Mineral Resources Minister Purnomo Yusgiantoro said the signing of the contracts meant that 60 percent of the contracts for the the construction of power plants to be built under the crash program had been concluded.
He said that the remaing 40 percent of contracts, mostly for the construction of power plants outside Java, would be signed in September this year.
Under Tuesday's contracts, a Chinese consortium of Shanghai Electric Corp Ltd and Dalle Energy will construct a 945 MW coal-fired power plant in Teluk Naga, Banten, at a cost of US$547.4 million in foreign exchange and Rp 1.89 trillion in local currency (about $207.6 million).
A consortium of Dongfang Electric Corp and Dalle Energy will build a 630 MW coal-fired power plant in Pacitan, East Java at $344.9 million and Rp 1.23 trillion, while a consortium of Shanghai Electric Corp Ltd and Maxima Infrastructure will establish a 1,050 MW coal-fired power plant in Pelabuhan Ratu at $566.9 million and Rp 2,205 trillion, West Java.
In March, PLN signed contracts for five coal-fired power plants, all in Java, with a total capacity of 3,300 MW.
Purnomo said the operation of the new coal-fired power plants would significantly reduce the government subsidy for electricity utilization, reduce dependence on oil-based-fuel and increase the country's electrification rate, which now stood at 56 percent.
"We still have approximately 30 months to finish the crash program. If we can complete it by the end of 2009 it would be an extraordinary effort," he said.
"With 10,000 MW from the crash program, plus 10,000 MW more from independent power producers and also some more from private companies, I believe that in five or six years we can double what we did during the past 62 years of our independence."
Currently, PLN has a total installed capacity of 24,417 MW, or 85.5 percent of the total national power generating capacity. The remainder is provided by independent power producers (3,450 MW), and privately owned companies operating power plants for their own industrial activities (746 MW).
Beside the contracts with the three consortiums, PLN also signed on Tuesday a letter of intent with China National Machinery Industry Corporation (Sinomach), for the construction of Tanjung Awar Awar plant and several long-term contracts with coal miners to supply a total of 5.5 million tons of low-rank coal per year.
A consortium of PT Kasih Industri Indonesia and PT Senamas Energindo Mulia will supply 1.4 million tons of coal per year for Teluk Naga plant, a while consortium of PT Arutmin Indonesia and PT Darma Henwa will provide the plant with 858,000 tons of coal per year.
A consortium of PT Arutmin Indonesia and PT Darma Henwa will provide the Pacitan plant with 950,000 tons per year while PT Titan Mining Energy and PT Bara Mutiara Prima will provide Pelabuhan Ratu plant with 1.4 million and 858,000 tons of coal per year, respectively .
"The government is concerned about the long chain of supply of coal from mining sites to plants. Don't let it happen that when construction is finished, the coal supply is not yet ready," Yusgiantoro told the investors.(02)
The Jakarta Post, Jakarta
After three months of delays due to a lack of government guarantees for the investors, state-owned electricity company PLN finally signed Tuesday contracts with three Chinese consortiums for the construction of three coal-fired power plants.
The signing of the contracts followed Finance Minister Sri Mulyani Indrawati's assurance Monday that the government would fully guarantee the financing of PLN's crash program to provide additional 10,000 megawatts (MW) of power by the end of 2009.
Speaking to reporters after the signing ceremony, Energy and Mineral Resources Minister Purnomo Yusgiantoro said the signing of the contracts meant that 60 percent of the contracts for the the construction of power plants to be built under the crash program had been concluded.
He said that the remaing 40 percent of contracts, mostly for the construction of power plants outside Java, would be signed in September this year.
Under Tuesday's contracts, a Chinese consortium of Shanghai Electric Corp Ltd and Dalle Energy will construct a 945 MW coal-fired power plant in Teluk Naga, Banten, at a cost of US$547.4 million in foreign exchange and Rp 1.89 trillion in local currency (about $207.6 million).
A consortium of Dongfang Electric Corp and Dalle Energy will build a 630 MW coal-fired power plant in Pacitan, East Java at $344.9 million and Rp 1.23 trillion, while a consortium of Shanghai Electric Corp Ltd and Maxima Infrastructure will establish a 1,050 MW coal-fired power plant in Pelabuhan Ratu at $566.9 million and Rp 2,205 trillion, West Java.
In March, PLN signed contracts for five coal-fired power plants, all in Java, with a total capacity of 3,300 MW.
Purnomo said the operation of the new coal-fired power plants would significantly reduce the government subsidy for electricity utilization, reduce dependence on oil-based-fuel and increase the country's electrification rate, which now stood at 56 percent.
"We still have approximately 30 months to finish the crash program. If we can complete it by the end of 2009 it would be an extraordinary effort," he said.
"With 10,000 MW from the crash program, plus 10,000 MW more from independent power producers and also some more from private companies, I believe that in five or six years we can double what we did during the past 62 years of our independence."
Currently, PLN has a total installed capacity of 24,417 MW, or 85.5 percent of the total national power generating capacity. The remainder is provided by independent power producers (3,450 MW), and privately owned companies operating power plants for their own industrial activities (746 MW).
Beside the contracts with the three consortiums, PLN also signed on Tuesday a letter of intent with China National Machinery Industry Corporation (Sinomach), for the construction of Tanjung Awar Awar plant and several long-term contracts with coal miners to supply a total of 5.5 million tons of low-rank coal per year.
A consortium of PT Kasih Industri Indonesia and PT Senamas Energindo Mulia will supply 1.4 million tons of coal per year for Teluk Naga plant, a while consortium of PT Arutmin Indonesia and PT Darma Henwa will provide the plant with 858,000 tons of coal per year.
A consortium of PT Arutmin Indonesia and PT Darma Henwa will provide the Pacitan plant with 950,000 tons per year while PT Titan Mining Energy and PT Bara Mutiara Prima will provide Pelabuhan Ratu plant with 1.4 million and 858,000 tons of coal per year, respectively .
"The government is concerned about the long chain of supply of coal from mining sites to plants. Don't let it happen that when construction is finished, the coal supply is not yet ready," Yusgiantoro told the investors.(02)
Tuesday, July 31, 2007
BRI voted country's best bank due to its role in local banking
Saturday, July 28, 2007
PT Bank Rakyat Indonesia (BRI) and four other Indonesian financial institutions have been voted the best financial institutions in the country in the latest evaluation by Alpha South East Asia, an investment magazine based in Hong Kong.
Besides BRI, which was named best bank, the other three are PT Bank Mandiri, Mandiri Sekuritas and PT Danareksa Sekuritas.
Mandiri was named Best Cash Management House and Best Trade Finance House, Mandiri Sekuritas named Best Bond House, and Danareksa named Best Investment Bank, Best Equity House and Best Broker.
"This award is the first of its kind in Asia, uniquely recognizing the achievements and capabilities of locally incorporated banks and brokerages in South East Asia," said Siddiq Bazarwala, CEO of Alpha South East Asia, during the presentation of the awards Thursday evening.
In its special awards issue, the magazine describes BRI as the best bank due to its role in local banking and its ability to generate substantial return for its shareholders.
Alpha reported that BRI was one of the few banks in Asia that could maintain an NPL rate of less than 5 percent, operate on a high net interest margin of over 11 percent, and generate a return on assets of 4.36 percent and a 33.75 percent return on equity.
"No other bank in Southeast Asia enjoys as large a net interest margin as BRI does. With its banking reach the widest among Indonesian banks, BRI is a model for banking in Indonesia."
A total of 35 awards were announced after the credentials of 128 financial institutions, banks and brokerages from Indonesia, Singapore, Malaysia, Thailand and the Philippines were reviewed. (02)
PT Bank Rakyat Indonesia (BRI) and four other Indonesian financial institutions have been voted the best financial institutions in the country in the latest evaluation by Alpha South East Asia, an investment magazine based in Hong Kong.
Besides BRI, which was named best bank, the other three are PT Bank Mandiri, Mandiri Sekuritas and PT Danareksa Sekuritas.
Mandiri was named Best Cash Management House and Best Trade Finance House, Mandiri Sekuritas named Best Bond House, and Danareksa named Best Investment Bank, Best Equity House and Best Broker.
"This award is the first of its kind in Asia, uniquely recognizing the achievements and capabilities of locally incorporated banks and brokerages in South East Asia," said Siddiq Bazarwala, CEO of Alpha South East Asia, during the presentation of the awards Thursday evening.
In its special awards issue, the magazine describes BRI as the best bank due to its role in local banking and its ability to generate substantial return for its shareholders.
Alpha reported that BRI was one of the few banks in Asia that could maintain an NPL rate of less than 5 percent, operate on a high net interest margin of over 11 percent, and generate a return on assets of 4.36 percent and a 33.75 percent return on equity.
"No other bank in Southeast Asia enjoys as large a net interest margin as BRI does. With its banking reach the widest among Indonesian banks, BRI is a model for banking in Indonesia."
A total of 35 awards were announced after the credentials of 128 financial institutions, banks and brokerages from Indonesia, Singapore, Malaysia, Thailand and the Philippines were reviewed. (02)
Tanners urge ban on raw leather exports to support shoe industry
Friday, July 27, 2007
The Jakarta Post, Jakarta
The government should completely ban the export of raw leather rather than just imposing a high export duty in order to prevent a shortage on the domestic market and to increase the utilization of local materials by the domestic footwear industry, says an association representing the country's tanners.
Indonesian Tanners Association (APKI) chairman Diyono Hening Sasmito said Wednesday that the tanning industry had suffered during the economic crisis as the government had failed to support the sector. This resulted in firms opting to export wet blue leather rather than finished leather.
This situation had effectively edged out local tanneries from the local downstream leather industry, Dinoyo said during the launching of a new trade publication, the Indonesian Leather Specification Profile 2007.
"Before the crisis, although there was no specific regulation on the leather trade, there was an export duty to discourage the export of wet blue leather. Exports of finished leather and leather goods used to be in third position among non-oil and gas exports, but they are now in 12th position," said Diyono.
He said that the current national production of leather stood at only 110 million square feet per year, much lower than the industry's installed capacity of 240 million square feet.
"Only 30 percent of the 110 million square feet is purchased by domestic industry, and that's not only for the production of shoes, but also for garments, gloves, furniture, leather goods and handbags," he said.
In an attempt to bridge the gap between the upstream and downstream sectors of the leather industry, APKI and the Indonesian Footwear Producers Association (Aprisindo), in collaboration with USAID, have launched the Indonesian Leather Specification Profile 2007.
Hery Kameswara, an industry advisor with USAID's SENADA Indonesia Competitiveness Program, said that the research and analyses undertaken by SENADA showed that there was a communications gap between the leather tanneries and footwear manufacturers regarding the types, quality and volumes of leather needed for footwear production.
"This profile should facilitate information exchanges and lead to increased business transactions between domestic leather tanneries and footwear manufacturers," he said.
The profile provides contact details, capacities and product specifications of 152 tanneries, which are concentrated on Java island.
Eddy Widjanarko, Aprisindo chairman, said that the government should draw up strategies for the development of the upstream and downstream industries, and review the regulations on leather imports, which he claimed had been hampering the downstream sector.
"This cooperation will help the footwear industry reduce sourcing costs, particularly the high cost of importing leather," said Eddy. (02)
The Jakarta Post, Jakarta
The government should completely ban the export of raw leather rather than just imposing a high export duty in order to prevent a shortage on the domestic market and to increase the utilization of local materials by the domestic footwear industry, says an association representing the country's tanners.
Indonesian Tanners Association (APKI) chairman Diyono Hening Sasmito said Wednesday that the tanning industry had suffered during the economic crisis as the government had failed to support the sector. This resulted in firms opting to export wet blue leather rather than finished leather.
This situation had effectively edged out local tanneries from the local downstream leather industry, Dinoyo said during the launching of a new trade publication, the Indonesian Leather Specification Profile 2007.
"Before the crisis, although there was no specific regulation on the leather trade, there was an export duty to discourage the export of wet blue leather. Exports of finished leather and leather goods used to be in third position among non-oil and gas exports, but they are now in 12th position," said Diyono.
He said that the current national production of leather stood at only 110 million square feet per year, much lower than the industry's installed capacity of 240 million square feet.
"Only 30 percent of the 110 million square feet is purchased by domestic industry, and that's not only for the production of shoes, but also for garments, gloves, furniture, leather goods and handbags," he said.
In an attempt to bridge the gap between the upstream and downstream sectors of the leather industry, APKI and the Indonesian Footwear Producers Association (Aprisindo), in collaboration with USAID, have launched the Indonesian Leather Specification Profile 2007.
Hery Kameswara, an industry advisor with USAID's SENADA Indonesia Competitiveness Program, said that the research and analyses undertaken by SENADA showed that there was a communications gap between the leather tanneries and footwear manufacturers regarding the types, quality and volumes of leather needed for footwear production.
"This profile should facilitate information exchanges and lead to increased business transactions between domestic leather tanneries and footwear manufacturers," he said.
The profile provides contact details, capacities and product specifications of 152 tanneries, which are concentrated on Java island.
Eddy Widjanarko, Aprisindo chairman, said that the government should draw up strategies for the development of the upstream and downstream industries, and review the regulations on leather imports, which he claimed had been hampering the downstream sector.
"This cooperation will help the footwear industry reduce sourcing costs, particularly the high cost of importing leather," said Eddy. (02)
Sunday, July 29, 2007
Film Review: The Italian
Directed by Andrei Kravchuk
Sony Pictures Classics 01/07 DVD/VHS Feature Film
PG-13 - some violence, sexual content, language, thematic issues
Review by: Frederic and Mary Ann Brussat
Vanya (Kolya Spiridonov) is a six-year-old boy who lives with many other boys in a run-down Russian orphanage. The headmaster (Yuri Itskov) is overwhelmed by the challenges of taking care of these children, most of whom were abandoned by their parents. Kolyan (Denis Moiseenko) really runs things in the place, operating as the underground leader of a gang. He takes money from the orphans who work for him, including Vanya who washes cars at a gas station for a tip.
One of the brightest moments in the lives of these bedraggled and lonely children comes when "Madam" (Maria Kuznetsova) shows up with parents who want to adopt a child. She is actually a baby broker operating illegally and making a lot of money satisfying the needs of wealthy Europeans in search of a child.
Vanya is fortunate enough to be chosen by a rich Italian couple who immediately fall in love with him at their first visit to the orphanage. Every children in the orphanage, including the member of the gang, call him "Italiano" since then. The other orphans are jealous of his good fortune to be given a chance for a better life. But Vanya is not so sure.
He meets the distraught birth mother of a boy who has just been adopted by foreign parents. She is filled with guilt and, shortly after talking with Vanya, commits suicide. With great determination and energy, he sets out to find his own birth mother no matter what it takes.
First, he needs to learn to read. He convinces Irka (Olga Shuvalova), a feisty orphan who earns money as a prostitute, to teach him. After breaking into the headmaster's office to steal his records, Vanya escapes from the orphanage and begins his quest to make contact with his birth mother.
Based on a true story, The Italian is the official Russian entry in the Academy Awards for Best Foreign Language Film. Director Andrei Kravchuk has made a gritty and unsentimental film about a stubborn and plucky little boy who is sets out a journey that involves risk, danger, and disappointment. It doesn't seem to faze him in the least.
Irka helps Vanya escape from the orphanage but runs into problems with the police when she is caught stealing. The Madam is shocked to discover that the boy has jeopardized her deal with the Italians. She and her security guard and personal driver prove to be resourceful trackers of the young boy. Vanya is beaten and robbed by some tough kids who live on the streets, but he is also helped by several people. His story reminds us of how sad it is that so many children in the world have been deprived of the parental love and the nurturing that most of us take for granted.
Thursday, July 26, 2007
Govt hopes tax breaks will boost research
Wednesday, July 25, 2007
The Jakarta Post, Jakarta
The government will appoint an independent committee to formulate guidelines for the implementation of a new regulation offering tax and customs incentives, as well as technical assistance, to businesses that invest in research and development (R&D).
The move is necessary so as to boost R&D spending, by the private sector particularly, State Minister for Research and Technology Kusmayanto Kadiman said Tuesday.
Indonesia's annual spending on research averages some US$300 million, most of which comes from the government. This is way behind China's $76 billion, or even Malaysia's $1.2 billion and Singapore's $2 billion.
Kusmayanto said the establishment of the committee -- comprising representatives of universities, business organizations and government institutions -- was the first step toward improving Indonesia's R&D performance.
With the formulation of the guidelines, the recent government regulation on the allocation of corporate revenues for the strengthening of technology, engineering and innovation would soon be able to implemented.
"We are encouraging the participation of the business sector in this research and development effort. Our long-term goal is to see 3 percent of GDP being spend on research," Kusmayanto said.
Citing as an example Norway, which allocates more than 4 percent of its GDP on research and development, which is one of the highest levels in the world, Kusmayanto said that it would be good progress if research spending could reach 1 percent of GDP within 10 years.
The current allocation on research and development is 0.04 percent of GDP, while neighboring countries Malaysia and Singapore allocate almost 2 percent of their GDP on R&D, said Kusmayanto.
In his opening speech, Kusmayanto explained that the issuing of the regulation was part of a national strategy to strengthen links between universities, research and development institutions, businesses and networks in the science and technology fields.
"The results of research and development, as well as the application of science and technology, which mostly take place in the universities and research institutions, need to be made known to the public.
"This would lead to the making of products that would support national development, strengthen competition and give rise to national pride," said Kusmayanto.
The regulation, which was issued June 22, stipulates that businesses -- be they private companies, state-owned companies, or cooperatives -- that allocate a portion of their profits to research will be able to avail of incentives.
The incentives can take the form of tax incentives, customs incentives, or technical assistance.
M. Said Didu, secretary to the State Ministry for State Enterprises, said the government regulation offered a good opportunity for increasing state-sector spending on R&D.
"With the total capital and operational spending of state enterprises amounting to between Rp 700 trillion and Rp 800 trillion per year, the country's spending on research would increase sharply if their total spending on R&D amounted to 1 percent," Didu told the meeting. (02)
The Jakarta Post, Jakarta
The government will appoint an independent committee to formulate guidelines for the implementation of a new regulation offering tax and customs incentives, as well as technical assistance, to businesses that invest in research and development (R&D).
The move is necessary so as to boost R&D spending, by the private sector particularly, State Minister for Research and Technology Kusmayanto Kadiman said Tuesday.
Indonesia's annual spending on research averages some US$300 million, most of which comes from the government. This is way behind China's $76 billion, or even Malaysia's $1.2 billion and Singapore's $2 billion.
Kusmayanto said the establishment of the committee -- comprising representatives of universities, business organizations and government institutions -- was the first step toward improving Indonesia's R&D performance.
With the formulation of the guidelines, the recent government regulation on the allocation of corporate revenues for the strengthening of technology, engineering and innovation would soon be able to implemented.
"We are encouraging the participation of the business sector in this research and development effort. Our long-term goal is to see 3 percent of GDP being spend on research," Kusmayanto said.
Citing as an example Norway, which allocates more than 4 percent of its GDP on research and development, which is one of the highest levels in the world, Kusmayanto said that it would be good progress if research spending could reach 1 percent of GDP within 10 years.
The current allocation on research and development is 0.04 percent of GDP, while neighboring countries Malaysia and Singapore allocate almost 2 percent of their GDP on R&D, said Kusmayanto.
In his opening speech, Kusmayanto explained that the issuing of the regulation was part of a national strategy to strengthen links between universities, research and development institutions, businesses and networks in the science and technology fields.
"The results of research and development, as well as the application of science and technology, which mostly take place in the universities and research institutions, need to be made known to the public.
"This would lead to the making of products that would support national development, strengthen competition and give rise to national pride," said Kusmayanto.
The regulation, which was issued June 22, stipulates that businesses -- be they private companies, state-owned companies, or cooperatives -- that allocate a portion of their profits to research will be able to avail of incentives.
The incentives can take the form of tax incentives, customs incentives, or technical assistance.
M. Said Didu, secretary to the State Ministry for State Enterprises, said the government regulation offered a good opportunity for increasing state-sector spending on R&D.
"With the total capital and operational spending of state enterprises amounting to between Rp 700 trillion and Rp 800 trillion per year, the country's spending on research would increase sharply if their total spending on R&D amounted to 1 percent," Didu told the meeting. (02)
Lorena Air chooses Malaysia for maintenance services
Tuesday, July 24, 2007
The Jakarta, Jakarta
Malaysia Airlines Engineering & Maintenance will provide maintenance, repair and overhaul (MRO) services to PT Eka Sari Lorena Airlines' (Lorena Air) new fleet of six Boeing 737 aircraft under a three year agreement worth US$48 million.
The agreement was signed last week in Malaysia by Lorena Air's CEO, Eka Sari Lorena Surbakti, and the senior general manager of Malaysia Airlines (MAS) Mohd. Roslan Ismail, a statement says.
The full-service airline, a subsidiary of Lorena Transport Group, will commence scheduled services in August with routes from its base in Jakarta to Surabaya (East Java), Denpasar (Bali), Balikpapan (East Kalimantan), Manado (North Sulawesi), Palembang (South Sumatra) and Kuala Lumpur.
Lorena Group -- best known as a luxury bus operator on the islands of Java, Madura, Bali and Sumatra -- plans to increase its fleet to 15 Boeing passenger jets over the coming years.
"MAS's worldwide experience and MRO capabilities, together with our engineering team, will definitely help us sustain our goal of ensuring the best global companies support our operations," said Eka Sari.
Roslan said the six B737s were expected to be ready for service by September this year.
"Our entire staff is firmly focused on providing Lorena Air and all of our other customers the best services possible as we continue to build upon our existing business relationships and remain a preferred MRO provider," said Roslan.
With years of experience in the transportation business, Lorena says the airline has what it takes to be successful, even at a time when the country's airline industry is reeling.
Indonesia's aviation industry has taken a hit from a series of deadly accidents, raising serious questions about the industry's safety standards and forcing the European Union to ban all Indonesian airlines from its jurisdiction.
Saudi Arabia is also considering a similar ban.
"The agreement shows that we are serious about our services and safety standards," Eka Sari said.
MAS Engineering and Maintenance commenced operations in 1972 and has over 30 years of experience in the MRO business. It has obtained approval to carry out maintenance work from international bodies such as the European Aviation Safety Agency (EASA), and the U.S. Federal Aviation Administration (FAA).
To date, it has obtained approval from airlines in 14 countries for certification of component work and aircraft maintenance, including Air France, KLM and Qantas Airways. (02)
The Jakarta, Jakarta
Malaysia Airlines Engineering & Maintenance will provide maintenance, repair and overhaul (MRO) services to PT Eka Sari Lorena Airlines' (Lorena Air) new fleet of six Boeing 737 aircraft under a three year agreement worth US$48 million.
The agreement was signed last week in Malaysia by Lorena Air's CEO, Eka Sari Lorena Surbakti, and the senior general manager of Malaysia Airlines (MAS) Mohd. Roslan Ismail, a statement says.
The full-service airline, a subsidiary of Lorena Transport Group, will commence scheduled services in August with routes from its base in Jakarta to Surabaya (East Java), Denpasar (Bali), Balikpapan (East Kalimantan), Manado (North Sulawesi), Palembang (South Sumatra) and Kuala Lumpur.
Lorena Group -- best known as a luxury bus operator on the islands of Java, Madura, Bali and Sumatra -- plans to increase its fleet to 15 Boeing passenger jets over the coming years.
"MAS's worldwide experience and MRO capabilities, together with our engineering team, will definitely help us sustain our goal of ensuring the best global companies support our operations," said Eka Sari.
Roslan said the six B737s were expected to be ready for service by September this year.
"Our entire staff is firmly focused on providing Lorena Air and all of our other customers the best services possible as we continue to build upon our existing business relationships and remain a preferred MRO provider," said Roslan.
With years of experience in the transportation business, Lorena says the airline has what it takes to be successful, even at a time when the country's airline industry is reeling.
Indonesia's aviation industry has taken a hit from a series of deadly accidents, raising serious questions about the industry's safety standards and forcing the European Union to ban all Indonesian airlines from its jurisdiction.
Saudi Arabia is also considering a similar ban.
"The agreement shows that we are serious about our services and safety standards," Eka Sari said.
MAS Engineering and Maintenance commenced operations in 1972 and has over 30 years of experience in the MRO business. It has obtained approval to carry out maintenance work from international bodies such as the European Aviation Safety Agency (EASA), and the U.S. Federal Aviation Administration (FAA).
To date, it has obtained approval from airlines in 14 countries for certification of component work and aircraft maintenance, including Air France, KLM and Qantas Airways. (02)
Power firm PLN gets green light to pledge assets to secure loans
Saturday, July 21, 2007
The Jakarta Post, Jakarta
State-owned electricity firm PT Perusahaan Listrik Negara (PLN) has been given the green light by the State Ministry for State Enterprises to pledge its assets to secure loans for the construction of new power plants.
State Minister for State Enterprises Sofyan Djalil said Thursday evening after a coordinating meeting with Vice President Jusuf Kalla that PLN could use it assets to secure loans.
PLN had hoped to raise loans from various overseas creditors, mainly from China, to finance 85 percent of the cost of power projects worth Rp 79 trillion (US$8.7 billion), but the negotiations bogged down due to the lack of a government guarantee.
As a result, PLN cannot start the construction of the projects even though the contracts for some of them have already been signed.
PLN then sought the government's approval to allow it to pledge its assets as collateral for the loans
In March, PLN signed contracts for five coal-fired power plants, all in Java, with a total capacity of 3,300 MW.
They comprise the 600-MW Suralaya Baru plant in Banten, to be constructed by China National Technical Import & Export Corp. (CNTIC), the 600-MW Labuan plant in Banten, to be constructed by Chenda Engineering Corporation and its partner PT Truba Jurong Engineering, the 900-MW Indramayu plant in West Java, to be constructed by a consortium of China National Machinery Industry Corporation (Sinomach), China National Electronics Equipment Company (CNEEC) and PT Penta Adi Samudera, the 600-MW Rembang plant in Central Java, to be constructed by Zelan Malaysia, and the 600-MW Paiton Baru plant in East Java, to be constructed by China's Harbin Power.
In April, PLN also signed contracts for the construction of five coal-fired power plants with a total capacity of about 3,600 MW. They consist of 900-MW plants in Teluk Naga, Banten, and in Pelabuhan Ratu, West Java, and 600-MW plants in Jepara, Central Java, and in Pacitan and Awar-Awar, East Java.
These project form part of PLN's fast-track program to provide additional power supply of about 10,000 megawatts by the end of 2009 to cope with the country's acute power shortage.(02)
The Jakarta Post, Jakarta
State-owned electricity firm PT Perusahaan Listrik Negara (PLN) has been given the green light by the State Ministry for State Enterprises to pledge its assets to secure loans for the construction of new power plants.
State Minister for State Enterprises Sofyan Djalil said Thursday evening after a coordinating meeting with Vice President Jusuf Kalla that PLN could use it assets to secure loans.
PLN had hoped to raise loans from various overseas creditors, mainly from China, to finance 85 percent of the cost of power projects worth Rp 79 trillion (US$8.7 billion), but the negotiations bogged down due to the lack of a government guarantee.
As a result, PLN cannot start the construction of the projects even though the contracts for some of them have already been signed.
PLN then sought the government's approval to allow it to pledge its assets as collateral for the loans
In March, PLN signed contracts for five coal-fired power plants, all in Java, with a total capacity of 3,300 MW.
They comprise the 600-MW Suralaya Baru plant in Banten, to be constructed by China National Technical Import & Export Corp. (CNTIC), the 600-MW Labuan plant in Banten, to be constructed by Chenda Engineering Corporation and its partner PT Truba Jurong Engineering, the 900-MW Indramayu plant in West Java, to be constructed by a consortium of China National Machinery Industry Corporation (Sinomach), China National Electronics Equipment Company (CNEEC) and PT Penta Adi Samudera, the 600-MW Rembang plant in Central Java, to be constructed by Zelan Malaysia, and the 600-MW Paiton Baru plant in East Java, to be constructed by China's Harbin Power.
In April, PLN also signed contracts for the construction of five coal-fired power plants with a total capacity of about 3,600 MW. They consist of 900-MW plants in Teluk Naga, Banten, and in Pelabuhan Ratu, West Java, and 600-MW plants in Jepara, Central Java, and in Pacitan and Awar-Awar, East Java.
These project form part of PLN's fast-track program to provide additional power supply of about 10,000 megawatts by the end of 2009 to cope with the country's acute power shortage.(02)
Bakrie Telecom ups customer target to 3.6 million this year
Friday, July 20, 2007
The Jakarta Post, Jakarta
Bakrie Telecom (BTEL), the telecommunications unit of Bakrie and Brothers, reported Wednesday a 63 percent rise in gross revenues to Rp 580 billion (US$63.7 million) in the first semester, from Rp 355 billion in the same period of 2006.
The company, which operates a CDMA-based mobile phone service using the Esia brand, attributed the sharp increase to a 112-percent jump in the number of its subscribers to 2.2 million as of the end of June from 1.1 million at the end of the same month in 2006.
Besides its Esia brand, BTEL also operates a Wifone wireless fixed service, Wimode wireless internet service and the Esia-tel chain of telephone kiosks.
President director Anindya Novyan Bakrie said that BTEL expected to increase the number of its subscribers to 3.6 million as of the end of the year.
Anindya said that with the sharp increase in the number of its subscribers, starting next month BTEL would expand its national coverage to 34 cities from the existing 17 cities in Greater Jakarta, and West Java and Banten provinces.
To support the expansion project, the company would double the number of its telecommunications towers to 800. The expansion is expected to account for 500,000 subscribers out of the total target of 3.6 million.
"We expect that we will have coverage in 34 cities by the end of the year. Our target is to become a national player offering high quality services and products at affordable prices."
The company said earlier that it would set aside about $220 million for capital expenditure to finance its expansion this year, $70 million of which would be raised from vendor financing, $95 million from bank borrowing and $55 million from bonds.
The company would also issue bonds worth Rp 500 million in the third quarter to help finance the expansion. The bonds would be sold to the public from Aug. 31 to Sept. 4, and be listed on the Surabaya Stock Exchange on Sept 10.
To manage the bond issue, the company has appointed two underwriters -- PT Danatama Makmur Investment Bank and PT Mandiri Sekuritas. (02)
The Jakarta Post, Jakarta
Bakrie Telecom (BTEL), the telecommunications unit of Bakrie and Brothers, reported Wednesday a 63 percent rise in gross revenues to Rp 580 billion (US$63.7 million) in the first semester, from Rp 355 billion in the same period of 2006.
The company, which operates a CDMA-based mobile phone service using the Esia brand, attributed the sharp increase to a 112-percent jump in the number of its subscribers to 2.2 million as of the end of June from 1.1 million at the end of the same month in 2006.
Besides its Esia brand, BTEL also operates a Wifone wireless fixed service, Wimode wireless internet service and the Esia-tel chain of telephone kiosks.
President director Anindya Novyan Bakrie said that BTEL expected to increase the number of its subscribers to 3.6 million as of the end of the year.
Anindya said that with the sharp increase in the number of its subscribers, starting next month BTEL would expand its national coverage to 34 cities from the existing 17 cities in Greater Jakarta, and West Java and Banten provinces.
To support the expansion project, the company would double the number of its telecommunications towers to 800. The expansion is expected to account for 500,000 subscribers out of the total target of 3.6 million.
"We expect that we will have coverage in 34 cities by the end of the year. Our target is to become a national player offering high quality services and products at affordable prices."
The company said earlier that it would set aside about $220 million for capital expenditure to finance its expansion this year, $70 million of which would be raised from vendor financing, $95 million from bank borrowing and $55 million from bonds.
The company would also issue bonds worth Rp 500 million in the third quarter to help finance the expansion. The bonds would be sold to the public from Aug. 31 to Sept. 4, and be listed on the Surabaya Stock Exchange on Sept 10.
To manage the bond issue, the company has appointed two underwriters -- PT Danatama Makmur Investment Bank and PT Mandiri Sekuritas. (02)
Govt to standardize risk management procedures
Friday, July 20, 2007
The Jakarta Post, Jakarta
The State Ministry for State Enterprises is finalizing detailed guidelines for standardizing risk management practices in the country's 138 state enterprises.
"We are preparing detailed guidelines for the state enterprises and will announces the result as soon as possible," Loso Judijanto, a special advisor to the state minister, told reporters Thursday.
While a 2002 decree of the state minister for state enterprises on good corporate governance sets out general guidelines on risk management, "we now need more detailed guidelines," Loso explained.
Loso said that some state enterprises had already adopted risk management approaches, but these ranged from the relatively sophisticated to very primitive.
"Companies in the banking and telecommunications sector have mostly adopted risk management approaches because the nature of these sectors requires them to do so, especially the banking sector, where every financial institution is required to comply with the Basel Accord if they want to enter the international market," said Loso.
The Basel Accord is a set of agreements sponsored by the Basel Committee on Bank Supervision, which sets out recommendations on capital risk, market risk and operational risk.
Speaking during a seminar on corporate risk management organized by the Perbanas Business School, Loso said that to date only about five percent of state enterprises outside the banking sector applied risk management in the running of their businesses.
Roy Sembel, a financial and risk management consultant, said that in order to survive in a rapidly changing business environment, state enterprises needed to adopt risk management practices in their day-to-day activities.
Over the last two years, many Indonesian companies had started to lay the foundations for enterprise risk management, but it would take three to five years before this became a culture among corporations, said Roy.
"It is not only about infrastructure or standard operating procedures. It's about people's mind-sets," said Roy, adding that many state enterprises were reluctant to apply risk management as middle managers usually saw it as generating "unnecessary" additional paperwork.
Roy added that state enterprises outside the banking sector needed to learn from that sector about the application of risk management.
"The banking sector already has some tools, such as risk assessment tools, risk management information technology and risk monitoring capability that could also be employed by other sectors. No need to reinvent the wheel," said Roy.(02)
The Jakarta Post, Jakarta
The State Ministry for State Enterprises is finalizing detailed guidelines for standardizing risk management practices in the country's 138 state enterprises.
"We are preparing detailed guidelines for the state enterprises and will announces the result as soon as possible," Loso Judijanto, a special advisor to the state minister, told reporters Thursday.
While a 2002 decree of the state minister for state enterprises on good corporate governance sets out general guidelines on risk management, "we now need more detailed guidelines," Loso explained.
Loso said that some state enterprises had already adopted risk management approaches, but these ranged from the relatively sophisticated to very primitive.
"Companies in the banking and telecommunications sector have mostly adopted risk management approaches because the nature of these sectors requires them to do so, especially the banking sector, where every financial institution is required to comply with the Basel Accord if they want to enter the international market," said Loso.
The Basel Accord is a set of agreements sponsored by the Basel Committee on Bank Supervision, which sets out recommendations on capital risk, market risk and operational risk.
Speaking during a seminar on corporate risk management organized by the Perbanas Business School, Loso said that to date only about five percent of state enterprises outside the banking sector applied risk management in the running of their businesses.
Roy Sembel, a financial and risk management consultant, said that in order to survive in a rapidly changing business environment, state enterprises needed to adopt risk management practices in their day-to-day activities.
Over the last two years, many Indonesian companies had started to lay the foundations for enterprise risk management, but it would take three to five years before this became a culture among corporations, said Roy.
"It is not only about infrastructure or standard operating procedures. It's about people's mind-sets," said Roy, adding that many state enterprises were reluctant to apply risk management as middle managers usually saw it as generating "unnecessary" additional paperwork.
Roy added that state enterprises outside the banking sector needed to learn from that sector about the application of risk management.
"The banking sector already has some tools, such as risk assessment tools, risk management information technology and risk monitoring capability that could also be employed by other sectors. No need to reinvent the wheel," said Roy.(02)
Nike reaffirms commitment to Indonesia
Tuesday, July 17, 2007
The Jakarta Post, Jakarta
Nike Inc. restated its commitment Monday to doing business in Indonesia despite its recent decision to cease placing orders with two of its suppliers here, which has prompted massive protests from the companies' workers.
Erin Dobson, Nike's director for corporate responsibility and communications, said that Nike had been sourcing in Indonesia since 1989 and remained fully committed to growing its sourcing base over time.
"Since 2004, Nike has increased its footwear sourcing by 16 percent.
"Despite this decision, Nike will continue to source 20 percent of its footwear manufacturing in Indonesia and will continue to work with more than 30 footwear and apparel contract factories here," said Dobson in a statement.
The statement was made in response to continuing protests from unionized workers and the owners of PT Hardaya Aneka Shoes (Hasi) and PT Nagasakti Paramashoes Industry (Nasa), both of which have their factories in Tangerang.
On Monday, thousands of workers from the two companies, owned by Central Citra Murdaya (CCM), staged a rally at the Jakarta Stock Exchange building in Jl. Sudirman, South Jakarta, to protest Nike's decision to cease placing orders with the two companies as of the end of 2007.
The workers demanded that Nike keep placing orders at the present level, or provide severance pay for all the workers. This is despite the fact that they are not employed by Nike and severance pay, by law, is the responsibility of their employers.
Maretha Sambe from Nike Indonesia said that the decision to cease ordering was based on the two companies consistent failures to meet Nike's minimum product quality and delivery standards over the past two years.
"Following repeated failures, we reduced our orders by 50 percent in March to encourage them meet our minimum product quality and delivery standards.
"But because there has been no significant change in quality and delivery, Nike world headquarters served termination notices on July 6," Maretha told The Jakarta Post.
To make up for the supply shortfall, Maretha said that Nike had shifted its orders to the other 37 contract factories in Indonesia that also supplied it with sport footwear, apparel and equipment.
To allow enough time for Hasi and Nasa to fulfill their obligations to their workers, Nike would continue to work with the two firms over the next nine months until the last orders had been completed, said Maretha.
She said she expected CCM to fulfill its legal obligations to the employees of the two companies and their suppliers by March 2008.
Elizabeth Sutarti, a union spokesperson at Nasa, said that the workers had been shocked by Nike's decision as there had been no warnings or indications that the company had been failing to meet the required standards.
"We never heard that Nasa was failing to meet the requirements. We always held a quarterly evaluation and until the last quarter, our performance was still good and was even one of the best in the country," Elizabeth told the Post.
Hasi and Nasa, with more than 14,000 workers, have exclusively produced footwear for Nike since 1989.
Nike has been active in Indonesia since then and currently more than 115,000 Indonesian workers are employed by contract factories manufacturing Nike products.
In 2006, Nike's contract factories in Indonesia produced more than 50 million pairs of shoes and 17 million garments. (02)
The Jakarta Post, Jakarta
Nike Inc. restated its commitment Monday to doing business in Indonesia despite its recent decision to cease placing orders with two of its suppliers here, which has prompted massive protests from the companies' workers.
Erin Dobson, Nike's director for corporate responsibility and communications, said that Nike had been sourcing in Indonesia since 1989 and remained fully committed to growing its sourcing base over time.
"Since 2004, Nike has increased its footwear sourcing by 16 percent.
"Despite this decision, Nike will continue to source 20 percent of its footwear manufacturing in Indonesia and will continue to work with more than 30 footwear and apparel contract factories here," said Dobson in a statement.
The statement was made in response to continuing protests from unionized workers and the owners of PT Hardaya Aneka Shoes (Hasi) and PT Nagasakti Paramashoes Industry (Nasa), both of which have their factories in Tangerang.
On Monday, thousands of workers from the two companies, owned by Central Citra Murdaya (CCM), staged a rally at the Jakarta Stock Exchange building in Jl. Sudirman, South Jakarta, to protest Nike's decision to cease placing orders with the two companies as of the end of 2007.
The workers demanded that Nike keep placing orders at the present level, or provide severance pay for all the workers. This is despite the fact that they are not employed by Nike and severance pay, by law, is the responsibility of their employers.
Maretha Sambe from Nike Indonesia said that the decision to cease ordering was based on the two companies consistent failures to meet Nike's minimum product quality and delivery standards over the past two years.
"Following repeated failures, we reduced our orders by 50 percent in March to encourage them meet our minimum product quality and delivery standards.
"But because there has been no significant change in quality and delivery, Nike world headquarters served termination notices on July 6," Maretha told The Jakarta Post.
To make up for the supply shortfall, Maretha said that Nike had shifted its orders to the other 37 contract factories in Indonesia that also supplied it with sport footwear, apparel and equipment.
To allow enough time for Hasi and Nasa to fulfill their obligations to their workers, Nike would continue to work with the two firms over the next nine months until the last orders had been completed, said Maretha.
She said she expected CCM to fulfill its legal obligations to the employees of the two companies and their suppliers by March 2008.
Elizabeth Sutarti, a union spokesperson at Nasa, said that the workers had been shocked by Nike's decision as there had been no warnings or indications that the company had been failing to meet the required standards.
"We never heard that Nasa was failing to meet the requirements. We always held a quarterly evaluation and until the last quarter, our performance was still good and was even one of the best in the country," Elizabeth told the Post.
Hasi and Nasa, with more than 14,000 workers, have exclusively produced footwear for Nike since 1989.
Nike has been active in Indonesia since then and currently more than 115,000 Indonesian workers are employed by contract factories manufacturing Nike products.
In 2006, Nike's contract factories in Indonesia produced more than 50 million pairs of shoes and 17 million garments. (02)
Subscribe to:
Posts (Atom)