Foreign investment increases 14.8%
JAKARTA (JP): The value of government approved foreign investment proposals increased by 14.8 percent in the first 4.5 months of 1996 over the same period last year, while domestic investment approvals more than doubled.
The Investment Coordinating Board (BKPM) said in its May 1996 report that foreign investment proposals approved between Jan. 1 and May 15, 1996 reached US$18.2 billion compared to $15.9 billion in the same period last year.
The number of foreign investment proposals rose by 77.2 percent from 267 to 473, said the report, which was discussed in last week's monthly cabinet meeting on the economy.
Domestic investment jumped to Rp 58.6 trillion ($24.9 billion) in the first 4.5 months of 1996, up from Rp 24 trillion in the same period in 1995. The number of domestic investment proposals rose by only 13.6 percent from 337 to 383.
The chemical industry was the most attractive sector to foreign investors with total approved investment reaching $4 billion. Infrastructure investment was the next most attractive, particularly electricity, gas and clean water, with approvals of $3.5 billion. Investment in the paper industry reached $2.8 billion.
For domestic investment, Rp 12.1 trillion went to the paper industry, Rp 8.8 trillion to the chemical industry and Rp 7.5 trillion to plantations.
The BKPM report said that April was this year's best month for investment approvals.
Foreign investment
Foreign investment proposals approved in April 1996 reached $4.9 billion which is $900 million higher than the March figure. Approved domestic investment proposals reached Rp 19.5 trillion in April, Rp 5.6 trillion higher than in March.
According to the report, the largest approved foreign investment proposal came from PT Hemoko Selayar International, a company originally from Kuwait. It will invest $1.5 billion in an oil refinery in South Sulawesi.
PT International Nickel Indonesia, a Canadian-Indonesian joint venture will invest $500 million in a nickel expansion project also in South Sulawesi.
Another major investor is PT Sumatra Energy Company of Japan which will invest $390 million in a power plant in North Sumatera.
PT Indomobil Suzuki International, a Japanese-Indonesian joint venture, will invest $356.9 million to expand its automobile plant, to produce engines and components.
The major domestic investors whose proposals were approved in April include PT Irian Andalan Kertas, which will establish a factory in Irian Jaya to manufacture uncoated paper. It will invest Rp 2.69 trillion. PT Cendrawasih Andalan Kertas will set up a similar plant in Irian Jaya with a Rp 1.79 trillion investment. And PT Prima Andalan Kertas will establish a Rp 1.79 trillion factory in Riau to manufacture uncoated paper.
In April the BKPM canceled licenses for seven foreign investment projects worth $1,509 billion, including an oil refinery in Riau expected to cost $1.5 billion.
The board also revoked the 18 licenses for domestic investment proposals worth Rp 1.3 trillion.
The government cancels investment licenses if sponsors fail to start projects within three years. (kod)