Industries

Examining Opportunities in Indonesia’s Upstream Palm Oil Sector

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By: Samuel Glickstein

Palm oil and palm oil-based products can be found in supermarkets around the world. Although palm oil can be used as a simple frying tool, this production-efficient oil can be blended and processed to create numerous food, pharmaceutical, and cosmetic products. The rapid growth of the palm oil industry in recent years has benefitted the economy of Indonesia, the world’s leading producer and exporter of the oil. The sector has provided employment to millions of Indonesians, particularly on the islands of Sumatra and Kalimantan, where most palm oil estates are located. According to the Indonesian Palm Oil Producers Association (Gapki) and Indonesia’s Ministry of Agriculture, Indonesia produced 32.5 million tons of crude palm oil (CPO) in 2015 and exported 26.4 million tons.

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An Introduction to Indonesia’s Renewable Energy Industry   

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By Samuel Glickstein

Indonesia possesses enormous potential for renewable energy. According to a 2015 report by the International Energy Agency (IEA), the nation has 75 gigawatts (GW) of hydropower potential and 28 GW, or 40 percent, of global geothermal reserves. The report also states that the archipelago holds solar energy potential of approximately 1,200 GW. Although Indonesia’s wind power potential is relatively small at less than 1,000 MW due to low wind velocity, this resource has also recently caught the attention of foreign companies.

Investors may consider Indonesia’s growing demand for energy as a significant reason to invest in the nation’s renewable energy sector. The country’s energy consumption has increased rapidly since the early 2000s, aided by a growing economy, rising middle class, and upticks in urbanization. In addition, the country’s electrification ratio (the percentage of households that are connected to the power grid) is approximately 82 percent, one of the lowest ratios in the Asia-Pacific region. This means that millions of Indonesians do not have access to electricity. Energy use is set to rise in coming years as the Indonesian government works to reduce poverty and develop remote areas that are not connected to the national power grid.

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Understanding Tax Treatment of Representative Offices in Indonesia

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By: Winnindo Business Consult
Editor: Mourme Taruna Halim 

In early April 2016, Indonesia Tax Authority indicated that Google Indonesia, Yahoo Indonesia, Facebook Singapore Pte Ltd and Twitter Asia Pacific Pte Ltd were avoiding tax in Indonesia.

Among the four companies, Facebook and Twitter are established in Indonesia in form of Representative Offices (RO). This article will not analyze the pros and cons of the representative office compared to other investment vehicles, but instead will focus on application of tax regulation to representative offices; and highlight regulations that caused tax authorities to target Facebook and Twitter.

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Setting Sail in the Sea of Java: An Introduction to Indonesian Aquaculture

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Indonesian FishingBy: Aysha Nesbitt

As the world’s largest archipelago, Indonesia is among the most important producers of aquaculture globally. In 2001, Indonesia ranked fourth in aquaculture output and has since increased its fishery exports to US $4 billion in 2015. Though Indonesia’s aquaculture industry has begun to make strides, it is still far from realizing its full potential.

In an effort to harness its comparative advantages, the Indonesian government has made monetary commitments to the sustainability of the industry and is working to relax regulations surrounding foreign investment. Upon their election in 2014, both President Joko Widodo and Susi Pudjiastuti, the Minister of Maritime and Fisheries, have been working to establish strategies to promote and expand Indonesia’s fisheries.

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Cascade Asia Upbeat on Renewed Opportunities in Indonesian Manufacturing

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By: Cascade Asia Advisors

As businesses look away from China and towards other countries to fulfill their manufacturing needs, Indonesia is an increasingly attractive prospect. With a massive workforce, a growing middle class, and newly established investment incentives, Indonesian leaders are making clear their commitment to promoting Indonesia as a hub of manufacturing in Southeast Asia.

Although Indonesia shows promising signs of growth in the manufacturing industry, regulations governing the sector are still cumbersome and are further complicated by governmental red tape. Ambiguous legislation, combined with stark regional differences in infrastructure, make it imperative for prospective investors to understand the Indonesian manufacturing climate. In this respect, Manufacturing in Indonesia: new options, opportunities and challenges, published by Cascade Asia Advisors, provides a clear overview of the current investment environment and considers the investment incentives, the fastest growing sectors, and the most cost effective locations in the country.

The following is a brief outline of Cascade Asia’s insightful article, which highlights the momentum that will move Indonesia closer to its goal of rebuilding its manufacturing industry.

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