RI expects rise in domestic investment level

RI expects rise in domestic investment level

JAKARTA (JP): Minister of Investment Sanyoto Sastrowardoyo
forecasted yesterday that the value of domestic investment
approvals will surpass the value of foreign investments this
year.

Speaking at a business meeting promoting investment in the
country's eastern provinces, Sanyoto disclosed that during the
first four months of this year alone, the government approved 341
domestic investment projects worth Rp 53.2 trillion (US$22.7 billion).
During the same period, it approved 409 foreign investment
projects worth $16.1 billion.

"This year domestic investment is very likely to be higher
than foreign investment," Sanyoto said.

Last year, domestic investment approvals by the government
reached Rp 69.9 trillion for 775 projects, up from Rp 53.3
trillion for 823 projects in the previous year.

Meanwhile, foreign investment approvals last year stood at
$39.9 billion for 799 projects, up from $23.7 billion in 1994 for
449 projects in the previous year.

Sanyoto noted that foreign investment approvals this year are
not likely to reach last year's level. "Last year's figure for
foreign investment was just too high."

He added that last year's high level of foreign investment
approvals was the result of seven oil refinery projects valued at
$12.7 billion.

"If we excluded the seven refineries, last year's foreign
investment would have reached only $27.2 billion. That's probably
the more realistic number," Sanyoto said.

Petrochemicals

Sanyoto also called on both domestic and foreign investors to
enter the upstream petrochemical industry, which he said was in
dire need of more investment due the growing demand for plastic
products.

He explained that annual plastic utilization currently stands
at eight kilograms per capita, far below the ideal for a country
with a per capita income of more than $1,000.

"For our income level now, our plastic consumption should be
around 32 kilograms per capita per annum. We need four more
olefin centers like Chandra Asri," Sanyoto said, referring to a
huge olefin plant owned by PT Chandra Asri Petrochemical Center
in Cilegon, West Java.

According to data from the Investment Coordinating Board, the
high figure for domestic investment approvals during the first
four months came mainly from a number of huge projects in the
pulp and paper industry, power generation and integrated palm oil
plantations and refineries.

The major projects include seven pulp and paper mills, with a
total investment of Rp 8.06 trillion, five power plants worth Rp
3.2 trillion, 14 palm oil plantations and refineries worth Rp 3.8
trillion.

Meanwhile, leading foreign investment projects approved during
the first four months included three power plants valued at $1.66
billion, seven automotive component projects at $763 million and
line chemical projects at $461 million. (rid)