a country analysis

2. About INDONESIA
• Indonesia, with its population of almost 23 Crores people, more than 17,000 islands, hundreds
of ethnic groups and languages, as well as its strategic geographic location, occupies a
significant place in Southeast Asia.
• The contribution of Indonesia to the global efforts to address the current world financial crisis
(sub-prime) which brings it as a new economic power.
• With the success of the ongoing reform efforts of its political structure, Indonesia is now the
third largest democracy in the world.
• Indonesia is the largest Muslim country in the world with Muslims accounting to almost 86%
percent of the population.
• As a multi religious, multi-ethnic and a multi-cultural country, Indonesia attaches great
importance to a harmonious coexistence of different religious faiths as well as ethnic and
cultural groups.

3. Sovereign ratings
BB+
Ba1
BB+

4. 1. Geography
a. Land area: 20.00.000 sq. km(16th largest country)
b. The world’s largest archipelago with more than 17,000 islands: 6,000 are inhabited: 1,000 of
which are permanently settled.
c. Climate: tropical; cooler in the highlands 16-35oC (77-900F)
d. Humidity: 80-900%
East to West 6,435 Kms

5. 2. The People
a. Population: 230 million (fourth-most
populous country)
b. Ethnic: 300 ethnic groups with 700 languages and dialects
c. National language: Bahasa Indonesia
d. Religion: 86% Islam, 6% Protestant, 3% Catholic, 2% Hindu, 1% Buddhist
3. Government and Politics
a. Form: unitary republic with a presidential system
b. Multi-party system

6. 3. Indonesian Currency: Rupiah
The Asian Financial Crisis of 1997 began in Thailand.
Indonesia, which had massive foreign reserves and was seen as having a strong economy,
responded on July 11, 1997, by widening its exchange rate band from 8 to 12%. But there
was a more serious crisis of confidence.

7. Business fields open to foreign investment are:.
• All business are open to Foreign Investment
, except those feature in Negative List.
• FDI limit is allowed 49%-100% in such
industry.

8. Business fields closed to foreign investment are:
1) production of weapons, ammunition, explosive equipment,
and warfare equipment; and
2) any business sectors explicitly declared closed based on the
law.
Example: Casino, Gambling, Alcohol Beverage Industry,
Mercury processed Chlorine Alkali Maker Industry,Chemical
Material Industry that can damage the environment

9. National Single Window for Investment
• INVESTMENT GUIDE | ONE-STOP-SHOP
• BKPM is implementing a one-stop-shop system (PTSP), to cut bureaucratic red tape and
allow investors to process business licenses faster. Its goal is to streamline and
consolidate the number of steps and places an investor must go for business permit
issuances.
National Single Window for Investment (NSWi)
• In order to facilitate PTSP even further, the National Single Window for Investment
(NSWi) was created. NSWi is an electronic platform for investments that enables
investors to apply for license and non-license services online. The ability to fully
automate the investment license process would significantly enhance the efficiency of
licensing services. The system was first launched in January 2010 in the Free Trade
Zone and Free Port of Batam.

10. Indonesia In International Trade
• Exports - commodities:
Oil and gas, electrical appliances, plywood, textiles and rubber.
• Exports - partners:
Japan, China, US, Singapore, South Korea, India and Malaysia.
• Imports - commodities:
Machinery and equipment, chemicals, fuels and foodstuffs.
• Imports - partners:
Singapore, China, Japan, US, Malaysia, South Korea and Thailand.

11.  Balance Of Payment - Indonesia
BOP 2008 2009 2010
Current Account 126 10,192 6,294
Capital and Financial Account -1,832 5,002 26,218
Total -1,706 15,194 32,512
Net Errors and Omissions -238 -2,688 -2,227
Overall Balance -1,945 12,506 30,285
Foreign Exchange Reserves 51,639 66,105 96,207

12. Indonesia International Business Statistics
 Contribution to GDP: 21% (2010, Non Oil & Gas)
 Real Sector Growth: 4.6% (2009-2010)
 Number Employed in the Sector: 14.4 million
 Average Employee Salary: 1,173,500 RP/month ( INR 5865)
 Main areas: Automotives, Electronics, Textiles, Footwear, Food &
Beverage, Palm Oils, Metal Products, Chemicals
 Main Export Markets: China, Japan, USA, India, Singapore,
Malaysia, EU.

13. Indian Companies in
Indonesia

14. Classification of Companies in Indonesia
Abbreviation Example Remark
PT PT Astra Honda Motor ≈ Ltd. (UK)
PT(Persero) PT Bank Mandiri (Persero) Tbk state-owned or majority
state-owned
PT Tbk PT Multi Bintang Indonesia Tbk ≈ plc (UK). Listed on the
Indonesia Stock
Exchange.

15. • First Indian Co to start business in Indonesia
• Year: 1973
• Company name: PT Elegant Textile Industry
• Group: Aditya Birla Group
• Industry: Rayon spun yarn
• Today: 1) Contributing 10 per cent of the global
rayon spun yarn trade.
2) 80 per cent of its products are exported.

16. • Year: 1979
• Company name: PT Sunrise Bumi Textiles
• Group: Aditya Birla Group
• Industry: Yarn manufacturer
• Today: 1) Developing value-added products to meet
customers’ specific requirements in high-
end use

17. • Year: 1979
• Company name: PT Bajaj Auto Indonesia
• Group: Rahul Bajaj Group
• Industry: Automobile
• Today: 1) Today 30-40% of total revenue come from
outside India.

18. • Year: 1980
• Company name: PT Indo Bharat rayon
• Group: Aditya Birla Group
• Industry: Viscose staple fibre (VSF)
• Today: World largest manufacturer of Viscose staple
Fibre ( Yarn)

19. • Year: 1990 ( 11 year after Bajaj Auto)
• Company name: PT TVS Motor Indonesia
• Group: TVS
• Industry: Automobile
• Target to capture 5% market share by 2014

20. • Year: 1993
• Company name: PT Punj Lloyd Indonesia
• Group: Punj Lloyd
• Industry: Engineering, Procurement and
Construction (EPC) for Oil & Gas and
Infrastructure
• Punj Lloyd was the first Indian company in the
hydrocarbon sector in Indonesia.

21. • Year: 1995
• Company name: PT Indo Liberty Textiles
• Group: Aditya Birla Group
• Industry: Synthetic Spun Yarn
• Today: 1) The company exports more than
80 per cent of its production

22. • Year: 2003
• Company name: PT Indo Raya Kimia
• Group: Aditya Birla Group
• Industry: Carbon disulphide
• Today: 1) Plant has a capacity of 50,000tpa

23. • Year: 2004
• Company name: PT Jindal Stainless Indonesia
• Group: JINDALS
• Industry: Stainless Steel Cold Rolling plant
• In 2004 : Co acquired Maspion Stainless Steel
(First Indian Co Going For M & A )

24. • Year: 2004
• Company name: PT Minda ASEAN Automotive.
• Group: MINDA
• Industry: Switches and locks for two
wheelers
• Today: Production at its full capacity in their
Greenfield manufacturing
facility.

25. • Year: 2005
• Company name: PT Bank IndoMonex.
• Group: State Bank of India
• Industry: BANKING
• In 2005: Acquire 76% share holding, the bank
was valued at 2.7 times its book value

26. • Year: 2006
• Company name: P T Bank Swadesi Tbk
• Group: Bank of India
• Industry: BANKING
• In 2006: Acquire 76% share holding, the bank
was valued at 2.5 times its book value

27. • Year: 2007
• Company name:
PT KaltimPrima Coal
PT Arutmin Indonesia
• Group: Tata group
• Industry: Coal mining
• 30 per cent stake for about $1.1
billion(INR5,100 crore)
• Strategic buy to ensure Coal for their
Thermal Power Plant In India.

28. • Year: 2010
• Group: Adani Group
• Industry: Infrastructure (Port and rail
project)
• Investing about $1.65 billion (Rs 7,700
crore) to ensure smooth supply of Coal to
Ports from Coal Mines.

29. • Year: 2010
• Group: GVK
• Industry: Infrastructure (Construction of
airport)
• Two airports in North Bali and Yogyakarta,
Java
• An initial investment of $4 billion (INR 20000 Crores)
onBuild Operate Transfer Basis

30. • Year: 2010
• Group: NALCO
• Industry: Aluminium smeltering plant
• Plant to commissioned by 2013

31. • Year: 2011
• Group: ADA Group
• Industry: Mining and
infrastructure sectors.
• Owner of 2 coal companies
• Building Rail network to ensure smooth supply
of Coal to Ports from its Coal Mines

32. • Year: 2011
• Company name: PT Sarwa Sembada Karya Bumi
• Group: Monnet Group
• Industry: Coal mining
• Mining in Jambi province of Sumatra.
• Plans to use coal for captive needs in India.

33. Other Indian Companies
• Lanco Infrastructure: PT. Lanco Indonesia Energy
• Tech Mahindra: PT Tech Mahindra Indonesia
• Coal India :In advance talk to buy up to 40
percent of Indonesia's Golden Energy Mines
(26.05.2011)
• Tata Motors will produce 50000 Nano car by
2013 in Jakarta plant.