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NEWS | Press Release : Domestic and Foreign Direct Investment Realization, Q2 and S1 Year 2011

Press Release

Domestic and Foreign Direct Investment Realization, Q2 and S1

Year 2011

Jakarta, July 21, 2011 – The Investment Coordinating Board of Republic of Indonesia (BKPM) today announces the second quarter (April – June) and first semester (January – June) 2011 of its investment realization figures for both domestic (PMDN) and foreign direct investment (PMA).

A. Realization of Investment in Q2 2011

Total investment realization in the second quarter (April-June) of 2011 is Rp. 62.0 trillion. This means an increase of 22.1% in comparison with figures from the same period in 2010.

Considering our target in 2011 (Rp. 240.0 trillion), the realization figures until the first semester (January – June) 2011 have increased Rp. 115.6 trillion or 48.2% from the target. Compared to the realization at the same period in 2010 (Rp 92.9 trillion), there is an increase of 24.4%.

Domestic Direct Investment realization (PMDN) increased 24.3% in the second quarter of 2011 compared to the same period in 2010; from Rp 15.2 trillion to Rp 18.9 trillion.

The Foreign Direct Investment realization (PMA) increases 21.1% in the second quarter of 2011 compared to the same period in 2010; from Rp 35.6 trillion to Rp 43.1 trillion.

Realization of Labor force absorption until June 2011 reached 225,804 people, with 91,533 people employed as a result of domestic direct investments (PMDN) projects and 134,271 people employed from foreign direct investment (PMA) projects. Compared to the realization of labor force absorption in the same period in 2010 (211,040 people), there is an increase of 7%.

“ The investment realization in the period of January to June 2011 showed an encouraging improvement. There is a significant increase of investment realization compared to the same period in 2010. We are especially encouraged by the jump of over 85% of investments directed outside of the island of Java. The investment trend is reflected in the increasing capital inflow of the foreign exchange reserves recorded by Bank Indonesia, amounting to US$ 119.65 billion“, said the Chairman of Indonesia’s Investment Coordinating Board, Mr. Gita Wirjawan.

Highlights of the invetsment realization results of the domestic (PMDN) and foreign (PMA) direct investment on second Quarter 2011:

1. Domestic Direct Investment Realization

Based on sectors (five biggest), the domestic direct investment realization are: Food Crops and Plantation (Rp 3.1 trillion); Food Industry (Rp 2.9 trillion); Paper, Paper Goods, and Printing Industry (Rp 2.7 trillion); Basic Metal Industry, Metal Products, Machinery and Electronic Industry (Rp 1.9 trillion); Transportation, Storage, and Telecommunication (Rp 1.7 trillion).

Domestic direct investment realization based on locations (five biggest) are: Special Capital Territory of Jakarta (Rp 2.8 trillion), West Java (Rp 2.7 trillion); East Java (Rp 2.1 trillion); Central Kalimantan (Rp. 2.0 trillion) and Jambi (Rp. 1.9 trillion).

2. Foreign Direct Investment Realization

Based on Sectors (five biggest), the Foreign Direct Investment realization are: Mining (US$ 1.5 billion); Basic Chemical Industry, Chemical and Pharmaceutical Industry (US$. 0.6 billion); Basic Metal Industry, Metal Products, Machinery and Electronic Industry (US$ 0.5 billion); Transportation, Storage, and Telecommunication (US$ 0.5 billion); Trade and Repair (US$ 0.4 billion);

Foreign Direct Investment realization based on locations (five biggest) are: West Java (US$ 0.8 billion); The Special Capital Territory of Jakarta (US$ 0.7 billion); Banten (US$ 0.6 billion); Papua (US$ 0.5 billion); and West Nusa Tenggara (US$ 0.4 billion).

Based on country (five biggest), the Foreign Direct Investment realization are: Singapore (US$ 0.8 billion); Netherlands (US$ 0.6 billion); USA (US$ 0.6 billion); Japan (US$ 0.4 billion); South Korea (US$ 0.2 billion).

3. Distribution of Project Location

Distribution of Project Location in the second quarter 2011 outside Java is Rp. 33.1 trillion (53.4%). Compared to the same period on 2010 which was Rp. 17.9 trillion. The increase in projects being located outside of Java is 85.5%, compared to last year.

B. Semester I (January-June) 2011

1.Cumulative of investment realization in the period of January-June 2011 is Rp. 115.6 trillion, which consists of Rp. 33.0 trillion from domestic direct investment (PMDN) and Rp. 82.6 trillion from foreign direct investment (PMA).

The realization of PMDN in the first semester 2011 increases 50.7% compared to the same period in 2010 amounting to Rp 21.9 trillion, while the realization of foreign direct investment increased 16.2% compared to the same period in 2010 amounting to Rp. 71 trillion.

2. The realization of PMDN based on the business sectors (five biggest) are: Food Industry (Rp 4.6 trillion); Food Crops and Plantation (Rp 4.5 trillion); Transportation, Storage and Telecommunications (Rp 4.3 trillion); Non metalic Mineral Industry (Rp. 3.5 triliun) and Basic Metal Industry, Metal Products, Machinery and Electronic Industry (Rp 3.2 trillion).

The realization of PMDN based on the project location (five biggest) are West Java (Rp 5.1 trillion), Special Capital Territory of Jakarta (Rp 5.0 trillion;); East Java (Rp 4.6 trillion); Central Kalimantan (Rp 2.3 trillion) and South Sulawesi (Rp 2.1 trillion).

The realization of PMA based on the business sectors (five biggest) are Mining (US$ 2.5 billion); Transportation, Building and Telecommunications (US$ 1.0 billion); Basic Chemical Industry, Chemical and Pharmaceutical Industry (US$ 0.9 billion); Basic Metal Industry, Metal Products, Machinery and Electronic Industry (US$ 0.8 billion) and Food Crops and Plantation (US$ 0.7 billion).

The realization of PMA based on project location (five biggest) are West Java (US$ 2.0 billion), Special Capital Territory of Jakarta (US$ 1.5 billion); Papua (US$ 0.8 billion); Banten (US$ 0.8 billion) and South Sumatera (US$ 0.5 billion).

The realization of PMA based on country of origin (five biggest) are Singapore (US$ 1.9 billion), USA (US$ 0.9 billion); Japan (US$ 0.7 billion); Netherlands (US$ 0.7 billion) and South Korea (US$ 0.3 billion).

4. The distribution of the project location during the first semester of 2011 outside of Java is Rp. 56.8 trillion (49.1%), compared to the same period in 2010 amounted to Rp 33.7 trillion, there is an increase of 68.5%.

5. The investment realization based on Economic Corridors in the first semester of 2011:

a. The investment realization in the Sumatera Economic Corridor is Rp 16.8 trillion (14.6%), consisting of Rp 5.8 trillion from PMDN and Rp. 11 trillion (US$ 1.2 billion) from PMA.

b. The investment realization in the Java Economic Corridor is Rp 58.9 trillion (50.9%), consisting of Rp 16.9 trillion from PMDN and Rp. 12 trillion (US$ 4.7 billion) from PMA.

c. The investment realization in the Kalimantan Economic Corridor is Rp 16.5 trillion (14,3%), including Rp. 4.9 trilion from PMDN and Rp. 11.6 trilion (US$ 1.3 billion) from PMA.

d. The investment realization in the Sulawesi Economic Corridor is Rp. 8,2 trillion (7,1%) consist of Rp. 3,6 trillion from PMDN and Rp. 4,6 trillion (US$ 0.5 billion) from PMA.

e. The investment realization in Bali-Nusa Tenggara Economic Corridor is Rp 5.6 trillion (4.8%), consist of Rp 0.3 trillion from PMDN and Rp 5.3 trillion (US$ 0.6 billion) from PMA.

f. The investment realization in Papua – Maluku Economic Corridor is Rp 9.6 trillion (8,2%), consisting of Rp. 1.4 trilion from PMDN and 8.2 trillion (US$ 0.9 billion) from PMA.

“The increase of investment realization is not only from the rise of domestic direct investment, and greater distribution outside of Java but also comes from the more value-additive downstreaming of raw materials such as processing of agriculture products: rubber industry, CPO processed to its derivatives (oleo chemical), bio-diesel; processing of mining products: from bauxite to chemical grade alumina, iron ore to sponge iron, cement industry, as well as investment in infrastructure, such as power generation and telecommunications”, said Mr. Gita Wirjawan, the Chairman of Indonesia’s Investment Coordinating Board.