BlackBerry Fights Back With Budget Indonesian Smartphone

A man silhouetted against a video screen displaying the the Blackberry logo as he poses with a Blackberry Q10 in the central Bosnian town of Zenica in this September 21, 2013 file photo illustration. (Reuters Photo)

Jakarta. BlackBerry on Tuesday launched a new budget handset in Indonesia, one of its last bastions, a major step in the ailing smartphone maker’s fight back against titans Samsung and Apple.

The Z3, designed with Indonesia in mind but expected to be introduced in other emerging markets later, is the first new BlackBerry phone since chief executive John Chen took the helm of the crisis-hit company in November.

The handset is also the first to be produced from the Canadian firm’s partnership with Taiwanese tech giant Foxconn, which makes gadgets for Apple, and is a key test of whether the new strategy will work.

BlackBerry believes the Indonesian model — whose full name is the Z3 “Jakarta Edition” — will be a hit in
Southeast Asia’s biggest economy, where the company maintains a loyal following despite losing ground in recent years, thanks in part to the popularity of its BBM messaging service.

Like many other global companies, BlackBerry is also targeting Indonesia due to its huge population of 250 million and its rapidly emerging middle class, who increasingly have cash to spend on gadgets following years of sustained economic growth.

“From conception to delivery, the BlackBerry Z3, Jakarta Edition, was designed specifically with our
Indonesian customers in mind,” Chen said during a visit to the Indonesian capital to launch the phone.

The phone will be available in shops from Thursday and will cost 2,199,000 rupiah ($190), BlackBerry said in a statement.

But analysts think it is already too late for a comeback by the company that pioneered the modern smartphone culture but has been unable to keep up with competition from Apple’s iPhone and handsets using the Google Android operating system.

Recent years have been dismal for BlackBerry, and it has suffered heavy losses and slashed thousands of jobs.

The company even put itself up for sale last year but abandoned hopes of finding a buyer several months later, and ousted chief executive Thorsten Heins.

Since Chen took over, there have been small signs of improvement. The company reported a loss of $423 million in the three months to March 1, which was not as bad as had been feared.

As part of its turnaround strategy, the smartphone maker announced the tie-up with Foxconn in December.

It involves transferring manufacturing and inventory management to the Taiwanese company, while allowing BlackBerry to focus on software and services.

The Z3 has a 13 centimeter touchscreen, without the physical keyboard of the older devices.

The Jakarta Edition’s BBM messaging service comes loaded with pictures of local cartoon characters for users to send to one another.

There is also a limited edition with the inscription “Jakarta” on the back.

BlackBerry’s most recent phones have not fared well in Indonesia but the company believes the Z3 will be popular, in particular due to its lower price.

Retailers say that online pre-orders, which began on April 28, have been healthy.

BlackBerry has refused to say which emerging markets it might take the phone to next, but analysts speculated it would likely be others in Southeast Asia.

But even the picture in Indonesia, one of the company’s healthiest markets, is increasingly dire and the Z3 may be too little too late, analysts warn.

“The launch of this device is really BlackBerry’s final stand in the Indonesian market,” Sudev Bangah from telecoms consultancy IDC told AFP.

IDC says BlackBerry’s market share peaked in Indonesia in 2011 at about 43 percent and remained healthy in 2012, only to suffer a collapse in 2013 when it slumped to around five percent in the final quarter, in the face of stiff competition from Samsung in particular.

Agence France-Presse

BlackBerry Steps Up Fightback With Indonesian Phone

A file photo dated 13 December 2011 showing an Indonesian salesgirl serving a customer as a poster of various kind of BlackBerry is seen on the background at a shopping mall in Jakarta, Indonesia. (EPA/Mast Irham)

Jakarta. BlackBerry will this week launch a new budget handset in Indonesia, one of its last bastions, a major step in the ailing smartphone maker’s fightback against titans Samsung and Apple.

The Z3, which is designed for Indonesia but will likely be introduced in other emerging markets later, is the first new BlackBerry phone since chief executive John Chen took the helm of the crisis-hit company in November.

The handset is also the first to be produced from the Canadian firm’s partnership with Taiwanese tech giant Foxconn, which makes gadgets for Apple, and is a key test of whether the new strategy will work.

The company believes the device will be a hit in Indonesia, where many have remained loyal to BlackBerry, with a spokesman saying that “this product will deliver something that? should resonate with consumers”.

But analysts believe it may already be too late for a comeback by the company that pioneered modern smartphone culture but has been unable to keep up with competition from Apple’s iPhone and handsets using the Google Android operating system.

Recent years have been dismal for BlackBerry, and it has suffered heavy losses and slashed thousands of jobs.

The company even put itself up for sale last year but abandoned hopes of finding a buyer several months later, and ousted chief executive Thorsten Heins.

Since Chen took over, there have been small signs of improvement. The company reported a loss of $423 million in the three months to March 1, which was not as bad as had been feared.

As part of its turnaround strategy, the smartphone maker announced the tie-up with Foxconn in December, which involves transferring to the Taiwan company manufacturing and inventory management, while allowing BlackBerry to focus on software and services.

BlackBerry has chosen to launch its first new phone from the partnership in Indonesia, Southeast Asia’s biggest economy with legions of social media-mad young consumers, where its devices remain popular but it has nevertheless lost ground in recent years.

Low retail price
The phone has a 13 centimeter touchscreen, like most of BlackBerry’s newest handsets which do not have the physical keyboards of the older devices.

It is designed specifically with Indonesian consumers in mind. The BBM messaging service — wildly popular in Indonesia — comes loaded with pictures of local cartoon characters for users to send to one another.

There is also a limited edition with “Jakarta” engraved on it.

BlackBerry believes the low price — it will retail for around $200 — will be a particular selling point.
Previous phones released on the new BlackBerry 10 operating system in Indonesia were more expensive, such as the Z10 which sold for around $700, and received only a lukewarm response.

Online pre-orders, which began on April 28, have been healthy, according to retailers.
“The response is positive and hundreds of units were sold in less than a week after the pre-order started,” said an employee at vendor Global Teleshop, who declined to be identified.

The phone will be launched on Tuesday in Jakarta and will go on sale in the following days.
BlackBerry has refused to say which emerging markets it might take the phone to next, but analysts speculated it would likely be others in Southeast Asia.

But even the picture in Indonesia, one of the company’s healthiest markets, is increasingly dire and the Z3 may be too little too late, analysts warn.

“The launch of this device is really BlackBerry’s final stand in the Indonesian market,” Sudev Bangah from telecoms consultancy IDC told AFP.

IDC says BlackBerry’s market share peaked in Indonesia in 2011 at about 43 percent and remained healthy in 2012 only to suffer a collapse in 2013, when it fell to around 13 percent.

And Bangah said it was unlikely the new device would be BlackBerry’s savior in Indonesia.
“Do we expect a mass exodus to this device? Hardly likely,” he said, adding IDC expected BlackBerry’s market share to fall to around 10 percent this year.
Agence France-Presse

Brewing Up Local Interest in Indonesia’s Gourmet Coffee

Robusta coffee beans are roasted at the Losari Coffee Plantation in Magelang, Central Java, Indonesia, on Saturday, Sept. 18, 2010. (Bloomberg Photo/Dimas Ardian)

Indonesia has long been known as a powerhouse in the global coffee trade. The country is the fourth largest coffee exporter in the world and last year alone it exported over 425,000 tons of coffee worth over $1.2 billion, most of which were of the Arabica and Robusta varieties. But while Arabica coffees like Luwak, Toraja Kalosi and Mandailing are fast becoming household names overseas, the Indonesian public still seem to be missing out on the hype.

Bogor Agricultural Institute lecturer Ade Wachjar pointed out that consumption of gourmet or specialty coffee in Indonesia is among the lowest in the world at less than a kilogram per person in 2012. This figure is a far cry from neighboring countries like Malaysia at over two kilograms or Vietnam with over one kilogram.
Indonesia’s consumption also pales in comparison to countries elsewhere in the world. Finland tops coffee consumption figures with over 12 kilograms, followed by Germany with seven kilograms and Brazil at 6 kilograms.

The JJ Royal Coffee company highlighted this fact during the launch of their newest product, JJ Royal Kopi Tubruk or black coffee.

“JJ Royal Kopi Tubruk is made of specialty grade one, or premium coffee, throughout Indonesia. Their packaging and reasonable price is designed to make gourmet coffee more accessible to the Indonesian public,” said JJ Royal Coffee president director Yusuf Sumartha during the event, which was also attended by bestselling author Dewi “Dee” Lestari and Indonesian rock act Andra and the Backbone.

“It is regrettable that many Indonesians are yet to enjoy our best coffee, which in turn renders them ignorant of Indonesia’s best brews,” Yusuf said. “I hope that JJ Royal Kopi Tubruk will find its way throughout Indonesia’s cities and its villages.”

He added that the sale of the premium coffee is in line with the rise of Indonesia’s middle class, particularly in recent years.

“I deplore the fact that most Indonesians drink second or third grade coffee, as the premium products are bound for export,” Dee Lestari concurred. “Coffee has always been a major part of Indonesian culture, which is something that I can personally attest to. For instance, my short story ‘The Philosophy of Coffee’ uses coffee as a metaphor that the best things in life are its simplest pleasures.”

Andra and the Backbone vocalist Dedy Lisan was just as critical.

“It seems that the government’s policy of exporting premium coffee is rooted in our agricultural policy,” he said. “For ages, we have been selling our best produce and have had to make do with the second or third rate stuff.”

JJ Royal Coffee also gave an inside glimpse of the coffee trade by holding a coffee cupping or coffee tasting. The process is almost akin to wine tasting.

“Tasters in coffee cupping set out to determine the coffee’s flavor through its aroma. This is vital, as a coffee’s taste is determined through its aroma,” explained JJ Royal Coffee product and advertising department head Clarissa Halim. “It is important that premium coffee be made of whole, flawless beans even before they are roasted. Defective beans can give the brew a sour taste if they are accidentally processed with their more wholesome counterparts.”

Though it did not take long to see Clarissa’s point, it did take a strong stomach. Coffee cupping entails trying three different brews, namely a cup of Arabica and Robusta as well as a mix of the two.

“The taster should take a sip of each coffee strain and taste it by swirling the coffee in their mouth” Clarissa explained. “They should then spit it into a cup and move to each respective coffee strain. This has to be done so that the taste of the preceding coffees would not cover up the taste of the coffees that come after them.”

She added that the taster should also take care not to swallow any bit of the coffee seed, as their strong, bitter taste would also cover the taste of other coffee brews.

While coffee cupping might be a stomach-turning proposition, it does make one view coffee in a new light.

The careful tasting revealed the Arabica’s sweetness and low acidity, while the Robusta’s highly acidic, full bodied, and strong flavor also stood out. The Arabica-Robusta mix was well blended, as it highlighted the best of the former’s sweetness with the latter’s strong flavor.

JJ Kopi Royal Tubruk has yet to prove whether it can live up to its billing of providing the Indonesian premium coffee to the public. But what is certain is that it is a step in the right direction for Indonesian coffee buffs deprived of their country’s best brews for too long. Tunggul Wirajuda, JG

Iran Routes Oil to Batam Port Amid Western Sanctions

Malta-flagged Iranian crude oil supertanker Delvar is seen anchored off Singapore in this March 1, 2012 file photo. (Reuters Photo/Tim Chong)

London. Iran is using an Indonesian port in a strategy to keep up sales to buyers in Asia in the teeth of Western sanctions, according to shipping data and industry sources.

Two Iranian very large crude carriers (VLCCs) able to hold 2 million barrels each sailed to Batam Island in April, according to AIS ship tracking on Reuters, which tracks global tanker movements, before moving on to China.

US and European sanctions aimed at pressuring Tehran’s suspected pursuit of nuclear weapons have halved Iran’s shipments, costing the government billions of dollars in oil revenue, since the start of 2012.

“Iran has been using this strategy for the past few months,” said analysts at FGE, an energy consultancy. “The strategy is taking the crude to islands in Asia via VLCCs and selling it from there. It’s a crucial stream of revenue for the country, so it’s very important they sell as much as they can.”

Batam Island is just 20 kilometers (12 miles) off the south coast of Singapore, the continent’s oil hub.

Industry sources and oil traders said that before last year it was rare for Iranian tankers to ship crude there.

“I think it is a staging post and crude goes from Batam to China or whatever,” said an official with a global oil company who declined to be named. “The Iranians can either keep the crude there, or leave it in the ground.”

Iran has shipped oil via other islands in Asia to help maintain exports. In September, Reuters reported Iran was parking oil at Labuan before shipping it on to other destinations.

“They have used Labuan in Malaysia in the past, so there is nothing really to stop them using Batam as a base as there are no sanctions-related drawbacks,” said a shipping industry source familiar with Iran’s tanker fleet and its movements.

“All of this is too risky for the brokers in the West or most ship owners, but it’s a live trade nonetheless.”

Sailing to China
The two tankers, Sonata and Courage, both belong to Iran’s top tanker operator NITC. They have sailed on to China after Batam, according to AIS.

NITC could not be immediately reached for comment, while an Iranian oil official declined to comment.

Another shipping industry source said there were indications based on ship tracking other tankers could also be involved in movements around Batam. Three tankers — Glaros, Seagull and Ocean Nymph — last reported their positions around the South China Sea area close to Indonesia several days ago, but have since not updated their positions.

The vessels were part of a fleet of eight tankers that were bought by a Greek middle man who was sanctioned earlier this year by Washington for operating a shipping network on behalf of Iran.

In April, the biggest buyer of Iranian crude was China, followed by South Korea, Japan, India, Turkey and Taiwan, according to estimates from industry sources. All of these buyers have cut their purchases over the last year.

Iran has reduced its oil exports to about 1.1 million barrels per day — worth roughly $3.3 billion a month at current prices — or about half of their rate at the start of 2012 before tighter sanctions kicked in.

With Iran more dependent on its own tankers to move oil because of sanctions, NITC vessels including

Maharlika, Skyline and Demos have been making high-speed journeys to China and other Asian destinations from Iran to maxmimise flows, said a third shipping industry source.

“The average speed of the global fleet is anywhere between 8 to 11 knots at the moment,” the source said.

“But of late some of the Iranian tankers have been making journeys around the 16 knots mark, which is even faster than at the highest point of the market in 2008.”
Reuters

Pertamina EP Halts Oil Distribution Following Explosion Near Tempino-Plaju Pipeline

oil pipeline

Pertamina EP, upstream business of the PT Pertamina, has halted oil distribution at its Tempino-Plaju pipeline in Bayung Lencir, Musi Banyuasin, South Sumatra following an explosion near the pipeline, allegedly triggered by oil thieves, on Wednesday morning.

Pertamina EP’s spokesman Agus Amperianto told reporters in Jakarta that the company received information that the explosion, which reportedly claimed five lives, happened at 6 a.m. and the ensuing fire was extinguished by 11a.m.

"Based on the information that we found so far, there is strong evidence that the explosion was caused by oil thievery practices," he said, adding that "a two-inch pipe allegedly used for oil theft was found near the pipeline."

In previous reports, it was said that the Tempino-Plaju pipeline, which distributes 11,000 barrels of oil per day, exploded and killed three people. However, Agus said that there was no immediate information on whether the pipeline was damaged the explosion happened near by.

Still, Pertamina EP has decided to halt oil distribution, Agus said, adding that the estimated loss was approximately Rp 2.7 billion.(iwa)

More Than 2 Million Workers Strike in Indonesia

3rd door Pulogadung Industrial Areas in Jakarta was closed by demonstrant today. (merdeka.com)

Indonesian unions say more than 2 million factory workers have gone on a one-day strike across the country to call for higher wages and protest the hiring of contract workers.

National police spokesman Col. Agus Rianto says hundreds of thousands of laborers from more than 700 companies at 80 industrial estates took to the streets in protest Wednesday.

Yoris Raweyai, chairman of the Confederation of Indonesian Workers’ Union, says workers want the government to revise a law allowing companies to hire temporary workers on one-year contracts without benefits — a practice called “outsourcing” in Indonesia.

Indonesia’s Constitutional Court ruled in January that the hiring practice is unconstitutional and violates workers’ rights.

“The [protest’s] agenda is to ask for the abolition of the outsourcing system in recruiting workers, [and demand a] pay hike and health security for all workers [by] 2014, instead of 2019 as planned by the government,” Said Iqbal, chairman of the Indonesian Labor Assembly (MPBI) said.

About 23,000 workers planned to march in Jakarta on Wednesday afternoon, and some 15,000 police were expected to be deployed to safeguard the rally. In Jakarta, workers on strike conducted sweeps of factories throughout the metro area, pulling other workers to the protest lines. Most companies in greater Jakarta were forced to close on Wednesday.

More than 2,000 protestors rallied in front of the Jakarta Legislative Council (DPRD) in Kebon Sirih, as traffic ground to a halt in many Central and South Jakarta neighborhoods. Additional protests took place at the Hotel Indonesia traffic circle, at the National Monument (Monas) and outside the offices of the Ministry of Manpower and Transmigration and the Ministry of Health.

Other protests included demonstrations in Bogor, Depok, Tangerang, Cilegon, Karawang, Sukabumi, Bandung, Semarang, Surabaya, Sidoarjo, Batam, Medan and Makassar.
Protestors in Makassar likened contract work to modern-day slavery.

“[The] system causes big losses to the workers,” said Andi Mallanti, of the South Sulawesi chapter of the Indonesian Workers Welfare Union (SBSI). “The workers are not known by the company, they work through a third party [and can] be fired without compensation.”

In Batam, some 25,000 workers surrounded the Batam mayor’s office in protest. In Bekasi, demonstrators caused police to close the toll road exit in West Cikarang.

“We’re not robots that they can treat the way they like,” Ralenti, one of the protesters, said. “Treat us like a humans, give us proper wages and health insurance.”

In Depok, protestors caused gridlock along Jalan Raya Bogor. In Bandung, they sung Dangdut and Sundanese songs and danced during the demonstration.

The Indonesian Chamber of Commerce (KADIN) urged the government to stand with local business leaders, explaining that contract workers are necessary part of doing business in Indonesia.

“There are many big banks such as Bank Mandiri, BRI or Citibank that implement outsourcing but never had problem with it,” Fahmi Idris, advisory board chairman of KADIN, said. “After the contract ends, the worker returns to the outsourcing company as permanent employee. They are misunderstanding the outsourcing practice and I think it is inappropriate to ban it.”

Businesswoman Mooryati Soedibyo, also a member of the KADIN advisory board, said the government needed to listen to both sides.

“Let’s create win-win solution,” she said. “Business people should be given easy access in doing business, while workers’ demands for welfare improvement should also be implemented.”

JG/AP

Gold, Platinum Giants Toughen Stance Over S. Africa Strikes

Tires burn on September 20 in the Sondela informal settlement next to the Anglo American Platinum mine in northwestern Rustenburg after residents blocked roads to keep the police out. Anglo American ordered 26,000 striking workers in South Africa to report for disciplinary hearings Tuesday or risk the sack, as gold giant AngloGold Ashanti warned strikers there they might scale down operations.

The world’s top platinum miner ordered 26,000 striking workers in South Africa to report for disciplinary hearings Tuesday or risk the sack, as gold giant AngloGold Ashanti warned strikers there they might be forced to scale down their operations.

Anglo American Platinum (Amplats) told its striking workers they had to turn up in person to explain their absence from work or face dismissal.

“The company will also be left with no alternative but to dismiss, in their absence, all employees who do not present themselves,” it said in a statement.

At AngloGold Ashanti meanwhile, the chief executive of the world’s number-three gold producer warned that their patience was wearing thin after more than a week of illegal strikes over pay.

“Clearly for South Africa’s gold sector, as for many others, there is a very clear trade-off between investing in the sustainability of our business and employment,” Mark Cutifani said in a statement.

“If the current unprotected strike continues, it compounds risks of a premature downsizing of AngloGold Ashanti’s South African operations,” said Cutifani.

Around 24,000 AngloAshanti Gold workers have downed tools at its South African operations.

Any closures would hit its operations that are “marginal or were struggling to maintain a viable margin,” Cutifani warned at a news conference.

“Where downsizing and closures occur we are unlikely to return to these shafts in the short- to medium-term due to the associated recovery costs.

“We certainly hope it doesn’t get to that but clearly if we have to do something, we will. We have to protect the long-term viability of the business,” said Cutifani.

The mining industry in South Africa was teetering on the brink, with the platinum sector under severe stress, he warned.

“The industry is on a knife’s age, 50 percent of the platinum industry is losing cash now, before you consider additional salary increases. It’s very serious.”

All gold production has been halted at AngloGold Ashanti’s operations in South Africa due to the strike, which started last month. The world’s number three gold producer is losing up to 32,000 ounces of the precious metal each week.

Around a third of AngloGold Ashanti’s output comes from South Africa.

South Africa’s mining industry is buckling under a wave of strikes that have sucked in around 80,000 workers, according to experts in the vital industry.

Late on Monday, global ratings agency Moody’s downgraded the unsecured credit rating of GoldFields, the world’s 4th gold producer, from positive to stable.

Its KDC West mine, which employs 15,000 people near Johannesburg, has been crippled by a strike since September 9.

GoldField’s downgrade “reflects a combination of the weakening of the South African government’s credit profile and also the continued growing labour unrest in the company’s South African mines, which is likely to lead to higher-than-expected wage demands from miners,” said Moody’s.

The agency last week dropped South Africa to a Baa1 rating, a move likely to further alarm investors already worried by the strikes and political instability.

South Africa’s mining sector has been rocked by protests since a deadly wildcat strike that began in August at the world’s number three platinum producer Lonmin and spread to other mines.

Lonmin workers last month sealed a hefty wage hike, ending a six-week strike that claimed 46 lives.

An inquiry opened Monday into the police killing of 34 miners at Lonmin and related violence, in what was the country’s worst bloodbath since the end of apartheid. AFP

Heineken Takeover of Tiger Beer Maker Approved

Photos of Heineken and Tiger beer. (Photo: Raj Nadajan)

Shareholders in the parent company of the Singapore-based brewer that makes Tiger Beer on Friday approved the firm’s takeover by Dutch giant Heineken.

The nearly unanimous vote at an extraordinary general meeting of Fraser and Neave (F&N), which held 40 percent of Asia-Pacific Breweries (APB), clears the way for Heineken to take full control of APB.

Heineken, which is seeking to expand its Asian sales as demand falls in western markets, already held 42 percent of APB when it made a bid.

“I declare the resolution carried,” F&N chairman Lee Hsien Yang said after 98.73 percent of shareholders voted for the deal.

A Thai faction in F&N led by beverage billionaire Charoen Sirivadhanabhakdi had earlier emerged as a potential rival to Heineken but later gave its approval to the sale of APB, which also makes Indonesia’s Bintang Beer.

Heineken offered F&N Sg$5.6 billion ($4.6 billion) for its stake in the brewer.

Before Friday’s meeting in Singapore, Heineken bought an additional 8.6 percent in APB held by Thailand’s Kindest Place Groups, also linked to Charoen. AFP

IMF : Energy Subsidies Not As Helpful

Energy subsidies are bad because too many people are using fuel, thus creating more air pollution, an NYU professor says. (PedomanNEWS.com Photo)

The Indonesian government should replace its existing inefficient energy subsidy bill with direct cash transfers to help the country’s poor from being impacted by rising energy costs, the International Monetary Fund said in a report released on Wednesday.

The Washington-based IMF, which helped provide billions of dollars to Indonesia more than a decade ago, said that Indonesia should use the energy bills as a buffer in case risk from China’s hard lending and Euro crisis continue to intensify.

“This [the energy cost] would create greater fiscal room to spend on pressing infrastructure, health, and education needs. It would also enhance economic equity,” said Sanjaya Panth, the IMF mission chief for Indonesia.

Thomas J. Sargent, William R. Berkley Professor of Economics and Business at New York University, and a 2011 Nobel laureate in economics, said that a direct payment scheme would be the most efficient way to target one who needed it most.

“Using artificially suppressed prices is a very bad way to subsidize … It destroys price signals and there would be too much pollution because too many people are using the fuel,” Sargent said in Jakarta on Wednesday. He warned that when Europe and China suffers, it impacts trade.

“So, what the countries in periphery can do is try to be prudent, and the country can save so it can have flexibility in its fiscal policy,” he said. “From what I’ve seen, that’s what Indonesia is trying to do.

The IMF forecast Indonesia’s economic growth to slow to 6 percent this year, lower than its earlier projection of 6.1 percent, with global demand to remain weak. The IMF forecast is less than the projection made by the government. The Indonesian government targeted GDP growth rate at 6.5 percent this year. In the first half of this year, the economy grew by 6.3 percent.

The largest economy in Southeast Asia would grow 6.3 percent next year or below its government target of 6.8 percent, the IMF said, as the country’s fundamentals are still robust.

“Corporate and financial sector balance sheets are healthy, and the sharp reduction in the public sector debt burden has provided the authorities with room to respond if further stimulus is needed,” Panth said.

Such stimulus would be needed if growth in China — one of the main destinations for Indonesia commodities — slowed down. The IMF estimated that a reduction of 1 percent in China’s growth could lower

Indonesia’s GDP growth by up to half a percentage point. Further deterioration in Europe would mean that foreign investors would leave local capital markets, especially the bond market.

The IMF report said the the government’s budget deficit at 2.3 percent of GDP in 2012 is supportive to growth, yet not burdening the country with excessive debt. However, it noted that the allocation and administration of government spending needs to be improved, especially regarding subsidies.

The government has allocated Rp 274.7 trillion ($29 billion) for energy subsidies next year, which is equivalent to 18 percent of the budgeted spending. The energy subsidy is forecast to reach Rp 306 trillion this year, more than the Rp 202 trillion set in the revised state budget. JG

Indonesia Clamps Down on Minimarts

The Trade Ministry has warned 7-Eleven that it violated its permit. (prioritas photo)

Jakarta. Around the corner of a large shopping mall in downtown Jakarta is a popular spot filled with young people sitting at outdoor tables, surfing the web on their gadgets or singing along to a band.

"It is a cool place to hang out because we can people-watch, snacks are affordable, and we can sometimes watch live soccer matches," said college student Edhie Wira, 18.

But while 7-Eleven has become a popular hang-out since its first store in Jakarta opened three years ago, it is now being pursued by the Trade Ministry for failing to secure a permit to operate a convenience store.

Lawson, a minimarket owned by a Japanese company and an Indonesian partner, was also warned for incorrectly declaring its license under its name and not its Indonesian partner's.

The two cases reflect the increasing scrutiny over the growth of minimarkets owned by large corporations, for fear they may hurt small local operators. Many Indonesians shop at 7-Eleven and other mini-markets instead of supermarkets or hypermarkets.

The Trade Ministry is pushing for a new law on franchises that will limit the number of outlets for any one franchise, beyond which they must be operated by local small investors. This has drawn cries of protectionist behavior from retailers.

The Indonesian Retailers Association (Aprindo) said the number of minimarkets in the country jumped to 16,720 last year, up 63 percent from 2008, on the back of a booming economy and expanding middle class.

A McKinsey report released last week predicted "a revolution in the (retail channels) sector to 2030, led by convenience stores," fueled by an estimated 90 million Indonesians who could enter the country's consuming class then.

By contrast, the number of supermarkets dipped to 1,229 across Indonesia, or shrank 17 percent, from 1,477 stores in 2008.

Many of these minimarkets operate without licenses. The Jakarta administration said that only 15 of the 57 7-Eleven outlets in the capital had proper licenses.

Starting next month, it said, violators will get written warnings and, at worst, be forced to shut down.

The Trade Ministry's director of domestic trade Gunaryo said, "We want 7-Eleven to amend its operations to adhere to the license it got, (that is) the one for cafeteria. In reality, it sold not only fresh food and beverages... but more of convenience goods."

Officials said the Japanese-owned 7-Eleven chain opened restaurants in Indonesia to skirt a rule that allows only local investors to operate mini-markets and small convenience stores.

Trade Minister Gita Wirjawan told reporters, "Retail stores (such as minimarkets) must be 100 percent owned by local investors, so (7-Eleven) probably obtained the permit for restaurants because it did not violate the negative investment list."

Indeed, a 7-Eleven store in the Menteng district in central Jakarta reflects its unique restaurant-cum-convenience store model. It sells goods on the first floor while the second level is for dining. Chairs and tables are found outside the store, shaded by big umbrellas.

Others have copied this concept.

While Lawson's Indonesian partner has quickly sent documents to amend its name, the local partner for 7-Eleven in Indonesia, Modern Internasional, said it had the right licenses.

Aprindo's deputy secretary-general Satria Hamid urged the government to issue a permit that accommodates 7-Eleven's unique model.

"The retail business is very dynamic and evolves according to changes in consumers' lifestyles," he said. "The government should recognize this diversification."

Observers said this clampdown and a revision to a franchise law that limits the number of company-owned outlets is anti-competition and protectionist.

Amir Karamoy of the Indonesia Franchising and Licensing Society said some of the eight foreign companies planning to set up franchises worth a total of 12 billion rupiah ($1.25 million) are waiting for the new rule before plunging into the market.

But Gunaryo said the number of franchises for mini-markets and restaurants has simply grown too quickly. "This has to be followed by a regulation that ensures business opportunities are given to the smaller and medium-scale businessmen, (for them) to own and manage them and also sell locally made products."

Reprinted courtesy of The Straits Times

China's Super-Rich Get Poorer

Zong Qinghou, chairman of Hangzhou Wahaha Group Co., is China's richest man

Many of China's richest people have grown poorer over the past year and the number of its US dollar billionaires has fallen for the first time in seven years, according to the Hurun Rich List, which tracks Chinese wealth.

In its annual report on China's super-wealthy, released on Monday, Hurun said China had 251 people worth $1bn or more, down 20 from last year but still sharply up from 2006, when there were just 15. And for the first time since Hurun began publishing the list in 1999, property lost pride of place as the sector that generates the most wealth.

Nearly half of the 1,000 richest people in China saw their wealth shrink in the past year, 37 of them by more than 50 per cent. The average wealth of the top 1,000 also fell 9 per cent to $860m, at a time when growth in the Chinese economy has also decelerated, the property market has declined and the stock market has fallen sharply. Chinese GDP growth hit a three-year low of 7.6 per cent year on year in the second quarter of this year.

Heading this year's list with a fortune of $12.6bn was Zong Qinghou, of beverage company Wahaha, who reclaimed the top spot he lost last year to Liang Wengen, co-founder of machinery company Sany. Mr Liang fell to fifth place this year.

In second place is Wang Jianlin, with wealth of $10.3bn, founder and chairman of property developer and cinema operator Dalian Wanda Group, which recently bought AMC Entertainment in one of the biggest recent overseas acquisitions by a Chinese company.

Rupert Hoogewerf, Hurun report chairman and chief researcher, said that despite the "bloodletting" this year, "it is worth remembering that these entrepreneurs are still up 40 per cent on two years ago and almost 10 times 10 years ago". And though the cut-off to make the list fell 9 per cent to $290m, that was three times the cut-off of five years ago, he said.

Despite signs that the slowdown in the Chinese economy is hitting manufacturing output, manufacturing took over as the sector that generates the most Chinese wealthy, with over with 20.7 per cent of those on the list.

Seven of those on the list are not just rich but politically powerful as well: they have been named as delegates to the 18th Party Congress, expected to take place sometime next month, including Mr Liang. CNN

From Fishing to Crab Farming in Indonesia

After planting mangroves, one by-product is crabs. (Photos courtesy of Putro Agus Harnowo)

Shifts in the weather have changed the lives of today’s fishermen in Bali.

They no longer can predict the best days to sail and catch fish. Maybe it’s because of climate change — Balinese fishermen leave it to scientists to figure out the reasons — but nonetheless, they need an immediate alternative to be able to maintain a steady income.

And some might have found one.

Fishermen have turned to farming mangrove crabs in the mangrove forests in their neighborhoods.

For the fishermen at Wana Sari, in the south of Denpasar, it was not easy to change from fishing to crab farming. Not only did the lack of know-how present a problem, but the farm also requires Rp 25 million to Rp 35 million ($2,600 to $3,700) to start. They need at least 10 fishing nets for a farm, each costing about Rp 2.5 million. They also need to build a proper cage for each crab to grow. It comes as no surprise that of more than 100 fishermen in the area, only 45 were willing to change their line of work.

It was only in March of last year that they began to establish these crab farms. The fishermen organized themselves into groups and all chipped in to build a farm. There are now five groups, and each owns a hectare of crab farm in the mangrove forest in Wana Sari.

“We sell these crabs alive to Jakarta and Singapore, and buyers usually buy a minimum of 200 kilograms,” said Made Sumasa, the head of the fishermen’s association at Wana Sari.

It takes between 20 and 30 days for a crab to grow. The fishermen usually buy a ton of seeds for each group, which results in about 500 kilograms of crabs.

The first time they sold crabs, which was last year, they made a profit of 30 percent. So Made and his friends decided to maintain their crab farm.

It soon become clear that crab farming is more promising because there is no risk of going home empty handed, unlike fishing. Made said they need to plant more mangroves to make sure that the crabs have the perfect habitat.

Should anyone want to build a new crab farm, there is no need to worry about the lack of space, said Yudha Wayan, another fisherman at Wana Sari. There are more than 1,300 hectares of land in the forest in Ngurah Rai.

“We live very close to the road, so there’s no distribution problem. But we were all purely fishermen, so we lack the proper knowledge on how to grow these crabs,” he said.

The fishermen-cum-crab farmers recently received donations and workshops from Pertamina. The energy company donated Rp 5 million to each group and put them in contact with a beneficiary of its corporate social responsibility program in Probolinggo, East Java. They will share their knowledge of crab harvesting, and making sweet jelly (dodol) and syrup with mangrove fruit as the main ingredient.

Pertamina also recently agreed to contribute to the government’s Grow a Billion Trees program. Afandi, a manager at Pertamina, said that the company plans to plant 100 million trees by 2015.

Speaking in front of 100 high school students before a mangrove-planting event in Serangan, Bali, on Thursday, Afandi said that mangrove trees are useful in a variety of ways.

“We know that Pertamina’s products contribute gas emissions, so we decided to [plant] more trees,” he said.

He added that although mangroves do not produce oxygen, the plant is useful for fishermen on the island because they can grow crabs in the forest and make food from its fruits.

“It’s very important to pick up only the fruit and not the wood,” Afandi added.

The company has been planting mangroves since 2008. The numbers grew from 1,000 to 10,000 trees in four years, and it is hopeful of reaching its eventual goal. To teach fishermen at Wanasari, Pertamina works with Bali’s University of Udayana.

Budi Waluya, a representative from the conservation association, said that mangroves are very easy to plant and grow. The trick is to plant only mangroves that have grown at least one meter high.

“[The tree] lives on muddy ground,” said Budi, adding that the areas in Serangan and Wana Sari are good for mangroves.

Made said that mangroves helped his people survive a food crisis during the eruption of Mount Agung in 1963, and through the political crisis in 1965.

“It is proven that we can survive by consuming mangrove, so we should [grow] more,” he said.

Fishermen at Wana Sari agree. To sustain their occupation, these fishermen have also began to consider eco-tourism. They have built a 150-meter trekking route into the forest where tourists can see a small warung and enjoy grilled crabs.

Jakarta Globe

Jakarta : Garuda forms partnership with Liverpool FC

Flag carrier Garuda Indonesia has signed a sponsorship deal with English Premier League (EPL) club Liverpool FC and Athletic Grounds Ltd., the owner of Liverpool FC, for next season.

Garuda is given the right to be the “Official Partner of Liverpool Football Club” and the “Official Global Airline Partner of Liverpool Football Club.

A number of six-minute advertisement videos about Garuda Indonesia will be broadcast during matches at the Reds’ home ground, Anfield, for the 2012-2013 season starting on Aug. 19 with the first EPL match.

Garuda marketing director, Elisa Lumbantoruan, said the airline took the opportunity as Anfield Stadium hosted a number of high profile matches.

The agreement is expected to assist Garuda expand its international market as well as trim the airline’s advertisement expenses.

“It is cheap when compared to placing advertisements on television to be seen by the entire population of the Earth.” she said.

Elisa said the flag carried had looked into cooperation with other clubs but refused to reveal which clubs.

In its regulatory filing, Garuda also announced its capital expenditure of US$400 million which would be used mostly to develop its fleet in addition to repaying pre-delivery payment and security deposit fees on leased aircraft.

This year Garuda plans to add 21 more aircraft of which 11 will go to the flag carrier and the remaining 10 to low-cost carrier subsidiary Citilink. The Jakarta Post

Harvest Peaks, Indonesia's Sumatera Robusta Ready Boosting Exports

Coffee-bean exports from Indonesia’s Sumatra island, the main growing area in the world’s third-largest robusta producer, surged 58 percent in June from a month earlier as the main harvest neared its peak.    

Shipments from Lampung, Bengkulu and South Sumatra provinces climbed to 14,719 metric tons from 9,313 tons in May, according to data from the Lampung trade and industry office today. Sales were 17,914 tons in June last year.    

Rising supplies from Indonesia may help to halt this year’s 18 percent rally in the price of the bitter-tasting robusta variety that’s used in instant drinks and espressos, potentially easing costs at companies including Nestle SA.    

“Farmers have already picked about 85 percent of crops on the higher-lying areas,” Mochtar Luthfie, head of research and development at the Lampung branch of the Association of Indonesian Coffee Exporters and Industry, said in an interview. The main harvest will peak in July, with smaller quantities continuing until September, he added.

The beans were shipped from Panjang port in Lampung to 26 countries last month including Japan and Italy, data showed. First-half sales plunged 60 percent to 50,664 tons. Lampung, Bengkulu and South Sumatra represent 75 percent of supplies from Indonesia, which ranks third behind Vietnam and Brazil.    

The country may harvest 10 million to 11 million bags in the 2012-2013 season, up from 7 million to 8 million bags a year earlier, the Indonesian Coffee and Cocoa Research Institute estimated on March 7. Production will rise because the weather was favorable during flowering, the institute said. A bag usually weighs 60 kilograms (132 pounds).    

September-delivery robusta futures dropped as much as 0.6 percent to $2,122 a ton on the NYSE Liffe Exchange in London, and traded at $2,127 at 3:45 p.m. in Jakarta.

Bloomberg