The Company Indonesia’s largest integrated textiles manufacturer, Sri Rejeki Isman (SRIL), popularly known as “Sritex”, is currently enjoying the benefit of demand displacement from China as companies relocate to South-east Asia due to cheaper labour costs. The upstream segment of spinning and weaving operated by SRIL is more capital-intensive compared to the company’s downstream segment (printing…
The Company Total Bangun Persada (TOTL), one of two listed construction companies not owned by the state, focuses on high-rise buildings for residential, office and commercial projects. Established in 1970, the company was listed on the IDX in July 2006, before being included in the MSCI Indonesia Index in May 2013. TOTL has built some prestigious buildings in Indonesia, including Bank Mega Tower,…
After taking over from the Indonesia Capital Market and Financial Institution Supervisory Agency, the new Financial Services Authority (OJK) is leading a regulatory overhaul of the sector. More aggressive than its predecessor, OJK is implementing new governance rules for underwriters and has set new premium tariffs and caps on commissions for highly competitive motor and property classes – all ahead…
As one of the countries most exposed to natural catastrophes (NatCat) such as earthquakes and floods, Indonesia’s relatively low insurance penetration has historically meant that the government must shoulder the lion’s share of losses. With earthquake and flood policies usually sold as standalone covers, a growing incidence of catastrophes has driven increased penetration, albeit from low levels.…
With oil and gas imports weighing on its trade balance, Indonesia is taking steps to reduce domestic demand for fuel and boost local refinery capacity. These moves come in the wake of the International Energy Agency (IEA) releasing a 2013 report projecting that energy demand in the South-east Asian country is set to nearly double over the next two decades. Improving The Trade balance Imports of oil…
Promulgated in 2001, Indonesia’s Oil and Gas Law forms the backbone of the sector’s regulatory framework along with various supplementary government ordinances and decrees. While the law ostensibly lays out a clear set of rules governing both state and private sector responsibilities, entitlements, liabilities and all manner of legal obligations, different interpretations of regulations by the…
As part of Indonesia’s push to ensure that more benefits from resource extraction carried out by mining activity are preserved and reinvested domestically, the government is revamping the framework regulating mining contracts. This is aimed at facilitating greater local participation in operations and securing a larger proportion of revenues for the state. The overhaul of the longstanding Contracts…
Home to the world’s second-most productive copper mine, and the largest gold mine in terms of reserves, Indonesia has positioned itself strongly among the world’s largest precious mineral producers. Although gold production across the archipelago has traditionally been extracted as a by-product from large-scale copper mines, the revenues generated from gold sales are far from an afterthought. Almost…
Already the third-largest geothermal power producer in the world behind only the Philippines and US, Indonesia is counting on tapping into more of this abundant renewable power source to diversify its rapidly expanding power sector. Located along the infamous ring of fire amidst the convening of the Eurasian, Australian, Pacific and Philippine Sea plates, the same geologic forces responsible for the…
Rising domestic consumption brought on by organic population growth as well as increased energy intensity from industrial and economic expansion is fuelling the country’s drive to boost electrical power generation capacity, which is targeted to double in size by 2020. Delivering this new wave of electricity generation will be crucial for the development of Indonesia given the fact that its current…
