Office of Commercial Affairs, Jakarta Feb 2012
Market Overview


Crossroad between 2 oceans, the
Pacific and Indian Ocean, and bridge
of 2 continents, Asia and Australia
Population: 237.6 Million (No. 3
rangking from the world
highest number of population among
ASEAN
The Global Outlook Summary
2008
2009
2010e
2011f
2012f
Global Conditions
World Trade Volume
3.2
-11.6
11.2
6.8
7.2
97.0
61.8
78.1
74.6
73.9
World
1.7
-2.1
3.3
3.3
3.5
OECD Countries
0.3
-3.4
2.2
2.3
2.6
Euro area
0.4
-4.1
0.7
1.3
1.8
-1.2
-5.2
2.5
2.1
2.2
United States
0.4
-2.4
3.3
2.9
3.0
Non-EOCD Countries
1.8
-1.7
4.2
4.2
4.5
Developing Countries
5.7
1.7
6.2
6.0
6.0
East Asia and Pacific
8.5
7.1
8.7
7.8
7.7
China
9.6
8.7
9.5
8.5
8.2
Indonesia
6.0
4.5
5.9
6.5
6.5
Thailand
2.5
-2.3
6.2
4.0
5.0
India
5.1
7.7
8.2
8.7
8.2
Oil Price (US$ per barrel)
Real GDP growth
Japan
Indonesia Vision 2025



Self Reliance
Competitiveness
Superior Civilization
Economic Policy Plan 2011-2025



1 of 10 Economic Growth Countries –
2025 (now 17th Ranking)
Increase GDP per capita from us$3,000 to
us$ 15,000
Increase GDP from us$ 700 billion in 2010
to us$4.5 trillion in 2025
6 Economic Zones
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Sumatra – Agriculture and Energy
Kalimantan – Mines and Energy
Sulawesi and Notrh Maluku – Agriculture &
Fishery
Bali & Nusa Tengara – Tourism & Food
Production
Papua & Maluku – Natural Resources &
Human Resources
Java – Manufacturing Base and Services


Huge market: a number of population/ consumer 240 Million
80 – 90% of population is middle to low, the rich is 15%
Import Structure of Thailand from Indonesia in 2010
 Raw Materials
37.63 %
 Fuel Lubricants
25.45 %
 Capital Goods
18.99
%
Export Structure of Thailand to Indonesia in 2010
 Principle manufacturing products
82.59
%
 Agro – Industrial products
9.72
%
 Agricultural products
5.64 %
Page 4
Office of Commercial Affairs, Jakarta, January 2011
Value (Million US$)
2010
2010
(Jan-Nov)
% Growth
2011/2010
(Jan-Nov)
2011
(Jan-Nov)
Total Trade Value
293,442
263,466
347,379
31.8
Export
157,779
140,949
186,419
32.3
Import
135,663
122,517
160,960
31.4
22,116
18,143
25,459
Trade Balance
Source: Statistics Indonesia
Office of Commercial Affairs, Jakarta, Feb 2012
Office of Commercial Affairs, Jakarta, January 2011
Office of Commercial Affairs, Jakarta, January 2011
Office of Commercial Affairs, Jakarta, January 2011
Office of Commercial Affairs, Jakarta, January 2011
Value : Million US$
% Growth
2009
2010
2011
Total Trade
8,467.85
13,038.77
17,447.87
33.82
Export
4,667.33
7,346.43
10,078.02
37.18
Import
3,800.47
5,692.33
7,369.83
29.47
866.81
1,654.10
2,708.18
Trade Balance
2010
Office of Commercial Affairs, Jakarta, Feb 2012
Office of Commercial Affairs, Jakarta, January 2011
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Huge market - high demand in products & services
High-end market or the rich is wealthy with high
purchasing power
Geographic- not far from Thailand
High economic growth rate compared to other
countries in ASEAN
Import duty - CEPT/ AFTA
Consumer perception on Thai products
Office of Commercial Affairs, Jakarta, Feb2012



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Trade barriers – Non-Tariff Barriers (NTB’s)
- AD/ CVD/ Safeguards
- Import Regulation of Certain Products
- Import Ban
- Import Licensing
- BPOM – ML Registration
- SPS Food Safety
- Products Label in Indonesian Language
- National Product Standard
Bureaucratic
Rules & regulations are not transparent
Difficulty in finding market info. & trade data
Close for newcomers – connection base
Office of Commercial Affairs, Jakarta, January 2011

Provide services
- Data/ Consultation/ Facilitation & Business meeting
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Regimes – Rules/ Regulations/ Measures
Export promotion - including
- Thailand Exhibition
- In-Store promotion
- Incoming mission
- Trade fair in Indonesia
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Trade & Economic data/ report
Promotion in Internationalisation
Relation & connection with government agencies
and businessman
Public relation – promote Thai products
in Indonesian market
Office of Commercial Affairs, Jakarta, January 2011

Market study – very important !!!

Study on rules and regulations concerned
– also very important !!

Relation & connection with Government agencies

Business partnership – Relation & connection with
Indonesian businessman

Carefully select trading partner
Office of Commercial Affairs, Jakarta, January 2011
Policy: Encourage investment in Indonesia esp. foreign direct investment
(FDI) to pursue national economic development
Investment Law
 Passed by Parliament 29 March 2007 and signed into law
26 April 2007 replacing Investment Law 1967 and 1968

Designed to govern investment activities in Indonesia to improve the
investment climate to attract foreign investment

Focus on national interest – esp. national economic development
Office of Commercial Affairs, Jakarta, January 2011

National treatment, transparency and accountability

Separation of authorities and responsibility between Central
and Regional Government

Simplification of investment procedures and licensing – onedoor integrated service

Investment facilities include
- Fiscal facility
- Services for rights of land use
- Immigration services
- Import licensing facility
Office of Commercial Affairs, Jakarta, January 2011
The Investment Coordinating Board (BKPM)
BKPM – Badan Koordinasi Penanaman Modal
Same as BOI
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Chairman assigned by and directly responsible to
the President
Coordinate the implementation of the investment policies
- Indonesia’s investment roadmap
- exploring and promoting investment opportunities
and potential
Office of Commercial Affairs, Jakarta, January 2011

Net income tax deduction 30% for 6 years when investment made

Import duty reduction 5% for 2 years for imported capital goods,
machinery or equipment

Exemption or postponement of the value added tax on goods and
services

Accelerated depreciation or amortization for 5 years

Property tax reduction esp. for certain business sectors in cretain area/
zone.
Office of Commercial Affairs, Jakarta, Feb 2012

Government policy
- to reform and promote conducive investment climate
in Indonesia
- Investment is a key component of its five-year economic plan
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Large domestic market & competitive work force

Abundance of diversified natural resources

Potential outsourcing partners: from large to SMEs
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Strategic location: several international sea transportation routes
Office of Commercial Affairs, Jakarta, January 2011

Agribusiness: cultivation of soybean, corn, rubber, oil palm, cocoa,
coffee, cashew nut and sugar cane

Fisheries: marine & brackish water fisheries

Industries: chemical and pharmaceuticals, food, wood and furniture
products, pulp & paper, electronics, automotives, textile and garment

Infrastructure and power plants, toll roads, airports, harbors,
telecommunications and water plant

Services: trading, hotels & restaurant, warehouses, recreational and
entertainment services and technical & engineering services
Office of Commercial Affairs, Jakarta, January 2011
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During 1990 – 2009, Thailand – rank of investment approval by country is No. 26
Value: 1,587 Mil.US$ Number of project: 33
by sector: mining, metal, mechinery & electronic, food, chemical
1. Japan 2. U.K 3. Singapore 4. Hong Kong 5. Taiwan
In 2008, Thailand ranking No. 23 among foreign investors in Indonesia
Value: 3.7 Mil.US$ Approved project: 5
1. Mauritius 2. Singapore 3. Japan 4. U.K. 5. Malaysia
6. South Korea 7. Germany 8. France 9. U.S.A 10. China
In 2009, Thailand ranking No. 6
Value: 51.4 Mil.US$ Approved project: 4
1. Singapore 2. Netherlands 3. Japan 4. South Korea 5. U.K.
In 2010, Thailand rangking No. 12
Value: 60.3 Mill US$, Approved project: 1
1. Singapore, 2. Mauritius, 3. USA, 4. United Kingdom, 5. Australia ...
Office of Commercial Affairs, Jakarta, January 2011
1. MINING
Ban-pu Public Co., Ltd
1. PT. Nusantara Thai Mining Services
2. PT. Trubaindo Coal Mining
3. PT. Indominco Mandiri
2. MANUFACTURER
2.1 Building materials
1. PT. Surya Siam Keramik: Ceramic Tiles
2. PT. Siam Indo Gypsum Industry: Gypsum
3. PT. Siam Indo Concrete Products: Concrete
2.2 Food
1. Charoen Pokphand Group Indonesia: Chicken product,
animal feed meal,
2. PT. Jui Fa Manufacturing Co., Ltd.: Canned fish
2.3 Petrochemical & Chemical products
1.
2.
PT. TPC Indo Plastic and Chemicals: PVC
PT. Trans Pacific Petrochemical Indotama
Office of Commercial Affairs, Jakarta, January 2011
2.4 Textile & Garment
1. PT. Winnersumbiri Knitting Factory
2. PT. Mingala Garment
3. PT. Sumber Bingtang Rejeki
3. PLANTATION
PTT Green Energy (Thailand) Co.,Ltd. (Palm Oil Plantation)
4. Petroleum
PT PTT Exploration and Production-Indonesia
5. Trading: Import – Export
1. SCT Co., Ltd.: various products - coal, tapioca starch, glass wool, particle board etc.
2.
3.
4.
5.
PT. M – 150 Indonesia: Energy drink
PT. Kemio Jajucitra/ PT. Kemici Indonesia: Chemical product
PT. Indonesia Thai Summit Auto Company: Motorcycle parts
Thai Martin Group: Garment
6. Banking: 1. Bangkok Bank Public Co., Ltd., Jakarta Branch
7. Franchising: Black Canyon Coffee, Coca Suki, Coffee World.
Office of Commercial Affairs, Jakarta, January 2011
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Rules & Regulations – ex. Central government/ local
government

Bureaucratic system – cost of investment
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Infra-structure – need to be developed
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Labour:
- Quality
- Labour Law – in favor of labour
Office of Commercial Affairs, Jakarta, January 2011
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Information/ Data services
 Rules & Regulation
 Investment opportunity & suggestions
Assist Thai company/ investors
 Checking on the regulations concerned – defend with
Indonesian Government agencies ex. Customs, Dept. of Trade
 Support and push forward on issues raised by Thai company/
investors on behalf of Thai Government agency
 Business Networking
Cases:
• PT. Surya Siam Keramik: customs, regulation on survey
• PT. TPC Indo Plastics and Chemicals: VCM import duty
Office of Commercial Affairs, Jakarta, January 2011
Office of Commercial Affairs, Jakarta
September 2011
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