Foreign investments hits record high<\/p>\n
JAKARTA (JP): Foreign investments approved by the government
\nduring the first six-and-a-half months of this year jumped by
\n192.9 percent to a new record high of US$27.2 billion over the
\nsame period of last year, a minister said yesterday.<\/p>\n
State Minister of Investment Sanyoto Sastrowardoyo said that
\ndomestic investments, however, recorded a 16.7 percent decrease
\nto Rp 30.9 trillion ($13.7 billion), committed for 448 projects.<\/p>\n
"This year, foreign investment approvals will surely create a
\nnew record high as the approvals for the last six-and-a-half
\nmonths alone have surpassed last year's record," Sanyoto said
\nafter opening the seventh two-day convention of the Association
\nof Indonesian Chemical Engineers at the Equatorial Hotel here.<\/p>\n
Last year, direct foreign investments hit a record high of
\n$23.7 billion for 449 projects, almost three times higher than
\nthe 1993 figure of $8.14 billion.<\/p>\n
Sanyoto said that the realization rate of proposed foreign
\ninvestment projects had also increased to nearly 60 percent so
\nfar this year, from 51.3 percent last year.<\/p>\n
"The realization rate of foreign investments is quite high, as
\ncompared with the rate in China, which is only 27 percent,"
\nSanyoto said.<\/p>\n
He said that greatest interest for foreign investments this
\nyear was in the chemical industry, with 71 projects worth at
\n$16.4 billion already approved.<\/p>\n
He disclosed that one of the proposed foreign investment
\nprojects in the chemical industry was a second olefin center to
\nbe built in East Java with a total investment of some $2 billion.
\nHowever, he declined to give details of the proposed project.<\/p>\n
Indonesia's first olefin center in Cilegon, West Java, which
\nis owned and operated by PT Chandra Asri Petrochemical Center,
\nhas sunk a total investment of $1.6 billion. The Cilegon olefin
\nplant, with initial installed capacity of 1.3 million tons of
\nolefin products, mainly ethylene and propylene, started trial
\nproduction earlier this year.<\/p>\n
Chandra Asri, controlled by politically well-connected
\nbusiness groups -- namely the Napan, Barito Pacific and Bimantara
\nGroups -- has been the subject of prolonged debates because of
\nits request to the government for significant tariff protection.
\nHowever, up to now the government has not granted such protection
\nto the company.<\/p>\n
Wardijasa, chairman of the Association of Indonesian Chemical
\nEngineers and also assistant to Sanyoto, said Indonesia still
\nneeds more olefin centers as the dependency of intermediary and
\ndownstream industries on olefin products, such as ethylene,
\npropylene, polyethylene and polypropylene would be greater in the
\nfuture.<\/p>\n
Olefin products are raw materials for various downstream
\nindustries, including fiber and plastics.<\/p>\n
The domestic demand for ethylene is projected to increase by
\n30 percent to 540,000 tons this year, for propylene to remain
\nflat at some 125,000 tons, for polypropylene to rise by six
\npercent to 371,000 tons and for polyethylene to increase by four
\npercent to 547,000 tons. (rid)<\/p>",
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