Worsening debt crisis, INDONESIA's EXPORTS to Europe will stagnate

Ministry of Industry worrying the European Union financial problems will affect the Indonesia export to Europe. Because, Greece's debt problems spread to other countries in Europe which has the potential to expand the region's financial crisis.

"For me Europe is not too optimistic. Especially if you look at the debt structure of large countries," said Director General of International Cooperation Ministry of Industry Industry, Agus Tjahayana.

According to him, Greece's debt problems will be difficult to prolonged unresolved because the three countries, namely Germany, France, and Britain is expected to help bail out Greece's debt was in trouble. In fact, Germany was difficult to expand its export market as China slammed aggression. "The possibility of its condition deteriorated," he said.

In fact, Indonesia's exports to the EU during the period 2007-2010 recorded an average increase of 9%. That number exceeds the import of industrial products from Europe which reached 8%. In 2010 Indonesia's trade balance with the EU surplus of U.S. $ 4.5 billion.

The amount was donated processed coconut or palm oil with a market share of 20%, textiles and textile products 14.5%, electronics 10.5%, 10.5% of processed rubber, and footwear or shoes 8%.

In fact, certain products have increased sharply as exports of other chemical products rose 147%, 59.4% of other commodities, cigarettes rose by 28.7%, and sports equipment 26.5%.

Unfortunately, the market penetration of industrial products to the EU is still relatively low with an average of about 0.5%. It is actually according to Agus could be an opportunity to expand market share of Indonesian exports. However, the region's financial condition would likely delay the planned expansion of Indonesia's exports.

"It is possible that down then the condition will remain stagnant because Europe needs these commodities," he said.

As with the financial problems the United States. According to Agus, the condition of the country was not too worried because the position of United States economic growth which is growing despite the crisis.

Country's internal political problems that make the financial problems the United States as unresolved. However, he believes, the country will find the solution of the problem.

As a result, most likely the United States - Indonesia trade will be stagnant for some time. Even if rising then the condition is a result of the appreciation of the yuan currency, the rupiah (IDR), Singapore dollar, ringgit, baht and peso. "The effect would be all for all countries for the same commodity," he said.

Indonesia Trade Minister Marie Elka Pangestu also ever mentioned her concern at the condition of the European Union's financial problems. "Compared to the United States, we are more worried about conditions in Europe," she said.

To maintain the level of Indonesia exports due to the decline in market share in both areas, Marie expressed, should be done by enhancing competitiveness, increasing diversification of export markets, and minimize the high cost.

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Indonesian woodworking exports are decreasing

Indonesian woodworking exports are decreasing sharply. It because the economic conditions in Europe and the USA which has been the main export market has not recovered yet.

The Indonesian Sawmill & Woodworking Association (ISWA) estimates, woodworking export volume this year only 1.2 million cubic meters. The export volume was down 14.2 percent compared to last year's export volume which reached 1.4 million cubic meters.

Similarly, plywood, even though the volume down, value of exports, probably, will not sag away from last year that reached USD 957 million. The trigger is woodworking prices also increased slightly, from USD 665 per cubic meter in 2009 to USD 675 per cubic meter. "So, we estimate, the value of exports same as of 2009," said Soewarni, Chairman of the ISWA.

Soewarni explained, since the financial crisis plagued the USA in September 2008, woodworking wood consumption in the USA continued to decline. It happened because a lot of housing development projects stalled. Similar conditions also experienced a number of other export destination countries, like China, Japan, Australia, and Germany. "Since the crisis, it is difficult for us to expect an increase in export of woodworking, especially in terms of volume," said Soewarni.

Weakening demand for Indonesian woodworking in the world market, bring bad impact to exporters. According Soewarni, many exporters of woodworking is now out of business. "Of the 700 exporters are now only just over 600 exporters," he said.

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Indonesian Exports increase 9.76 per cent

The Indonesian exports increase 9.76 per cent in August 2010 with value reached US$ 13.71 billion, compare to the exports in July 2010. If compared to exports on August 2009 is increasing of 29.99 percent.

Non-oil/non-gas exports on August 2010 has reached US$ 11.77 billion, rose 10.94 percent compared to July 2010, whereas compared to August 2009 exports increased by 32.35 percent.

The cumulative value of Indonesian exports from January to August 2010 reached US$ 98.71 billion, an increase 40.42 percent over the same period in 2009, while non-oil exports reach US$ 81.73 billion, an increase of 36.25 percent.
The largest increasing of non-oil exports in August 2010 is coming from animal fats & oils / vegetable at US$ 1.1 billion, while the largest decline occurred in the ore, scale, and ash for metals at US$ 80.0 million.

Non-oil exports to Japan in August 2010 is the largest number of US$ 1.40 billion, followed by China US$ 1.24 billion and the United States US$ 1.14 billion, with the contribution of all three reached 32.17 percent. While exports to the European Union (27 countries) around US$ 1.62 billion.

By sector, industrial product exports from January-August 2010 rose by 34.66 percent compared to same period of 2009, as well as exports of agricultural products rose 15.84 percent and exports other mining products rose 47.35 percent.

Source: Indonesia Central Statistics Agency (BPS) / picture:google.com

Garuda Indonesia cargo capacity up to 7 tons

Indonesia airline, Garuda Indonesia is preparing cargo capacity up to 7 tons each time flying for the benefit of various fresh fishery exports commodities from North Sulawesi. "Exports that can be served by Garuda Indonesia is mainly to Japan, which became one of the country potential buyer of fishery products from North Sulawesi," said Head of the Main Branch of Garuda Indonesia Manado, Shidiki Iribian.

Shidiki said exports could be served by Garuda Indonesia mainly fresh commodities like fresh tuna and other fisheries, as market demand. "Fresh fishery commodities require fast delivery, and Garuda Indonesia is able to ensure delivery time approximately 10 hours from Sam Ratulangi Airport, Manado to Japan," said Shidiki. The delivery time is still pretty long, because the flight had to go through Bali's Ngurah Rai Airport first and then sent to buyers in Japan.

Possible additional cargo capacity for air freight will be reviewed to take account also of the passengers’ luggage. "If this fishery commodity export is increasing, Garuda Indonesia will find a way out so that delivery to overseas can be done," said Shidiki.

Head of Foreign Trade, North Sulawesi, Hanny Wajong, said North Sulawesi needs additional export capacity by using air transport because of the tendency of increasing the performance of fishery products in recent years. "Some foreign countries have inquiry of fresh fishery products. Therefore, in this case air transport by Garuda Indonesia, is very important," said Hanny.

LG will not relocate its factory from Indonesia

LG Electronics Indonesia has argued the news that LG will relocate one of its factories in Tangerang outside Indonesia. LG hand over about the road infrastructure improvements to the Indonesian government.

President Director of LG Electronics Indonesia, Kim Dae Weon, confirmed today the company does not have a plan to leave Indonesia, or relocating any factory. "LG already invest in Indonesia since 1991. LG has become part of Indonesia and helped to get better quality people," said Kim Dae Weon at Crown Plaza, Jakarta, Friday, August 13, 2010. While for the road infrastructure problem, Kim believes the Indonesian government will do the best. LG wants to maintain good relations with the Indonesian government, especially local government.

According to Kim, is the road infrastructure needs of the two parties between LG and the government. Although the infrastructure is damage, LG business in Indonesia is still positive. LG Global still  rate Indonesia as one of the company's main market. Of the 120 countries that became LG product markets, Indonesia is in the "Top Seven" LG sales worldwide. "As for domestic sales and exports, Indonesia is in the seven major LG from 120 countries. That is why Indonesia's position is very important for the LG Global," Kim said.

Based on LG data, LG Electronics Indonesia sales increased 36 percent in the first half of 2010 compared to the previous period. The highest sales was contributed by LCD, refrigerators, and washing machines.

Previously reported, the Minister of Industry, MS Hidayat has received complaints from LG regarding the destruction of road infrastructure along seven kilometers around the LG factory in Tangerang. However, when confirmed, LG did not provide a detailed explanation. "LG is only to say the real situation to the government," said Head of Public Relations, LG Electronics Indonesia, Dewi Damayanti.

60% of Indonesia fishery export is USA and Japan

The largest export destinations of Indonesian fishery is United States and Japan. Both of countries have Indonesia fish export market share up to 60%. "30% of the Indonesia fishery export is to the United States and 30% to Japan, the rest is going to Europe, Hongkong and so on," said Rusman Heriawan, Head of the Central Bureau of Statistics.

In year 2008, based on the grouping of export, the export of fishery products in the top ten positions. Meanwhile in 2010, the export performance of fisheries affected by USA financial crisis, which impact the U.S. and Japanese export markets was declined. "In 2009 export of fishery was in a 11th position, amongst copper, gas, rubber and palm oil," said Rusman.

Viewing conditions this year, Rusman predict Indonesia fisheries export could penetrate the export value of U.S. $ 2.6 billion or below the target of the Ministry of Maritime Affairs and Fisheries. Export performance rating is predicted by Rusman could rise to the eighth rank. "Based on the current potential, these targets can be achieved, especially if exports increase, especially fresh fish that is experiencing increased demand," explained Rusman.

Earlier, Minister of Maritime Affairs and Fisheries, Fadel Muhammad set a target of Indonesia fishery product exports in 2010 to U.S. $ 2.8 billion. The target was higher than exports in 2009 and the realization that only U.S. $ 2.25 billion. Actual exports in 2009 and then decreased compared to the year 2008 the export value of fishery exports reached U.S. $ 2.47 billion. Decline in exports in 2009 occurred because of the declining consumption of fish by export destination countries due to the impact of global crisis.

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