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Indonesia news roundup

Build and interiors firms in Indonesia should be feeling optimistic, as the latest news from the nation's construction industry shows that it is in a period of rapid growth. One expert has predicted an increase of 14.26 per cent in 2015, and Indonesia's state cement firm has just announced significant growth in cement consumption and profit last year.

This growth has been led by a series of major projects. For example, PT Kawasan Industri Jababeka has announced it will be constructing a series of hotels in West Java, while international firm USANA has declared its intention to move to Indonesia and construct offices in Jakarta.

Here are the latest stories from this growing area of Indonesian business:


Growth predicted for construction industry

An industry expert has outlined his predictions for the future of Indonesian construction. In an interview with Antara News, Satrio Herlambang - the secretary general of the Indonesian Architects Association (IAI) - pointed out the huge growth potential of the nation's building sector.

His forecast is for Indonesia's construction industry to grow by a massive 14.26 per cent in 2015. "IAI realises that the growth of the construction sector has an important role in the economic development of [Association of Southeast Asian Nations] countries, especially in Indonesia," he added.

The growth of Indonesian domestic construction has allowed some of the nation's firms to expand into nearby Myanmar, according to Mr Herlambang. He pointed to Ciputra Group, Lippo Group, and Wijaya Karya as examples of firms that have been able to expand in this manner.


Developer planning to construct 5,000 new hotel rooms

PT Kawasan Industri Jababeka, Indonesia's oldest publicly listed industrial estate developer, has announced a major hotel construction project in the special economic zone of Tanjung Lesung, which is located in the region of Banten, West Java. In total, the company will add 5,000 hotel rooms to the region.

S. D. Darmono, the firm's president director, told the Jakarta Post that a portion of these rooms would be found in a range of Marina Boutique hotels. The firm will be constructing 100 of these in the next two years, which will account for 1,000 of the rooms.

Another 1,000 will come in the form of a range of homestay-style houses, which will be a cheaper option for tourists. Mr Darmono said: "Apart from developing hotels, we will also provide facilities to support MICE [meetings, incentives, conventions and exhibitions], as Tanjung Lesung has the potential to hold huge international events as an alternative option apart from Bali."


Government plans to make port construction easier

In an attempt to increase the number of seaports being constructed in Indonesia, an effort is being made to cut red tape by reducing the number of permits required for these major projects. The country's Investment Coordinating Board (BKPM) will be working with a variety of ministries and other organisations to achieve this goal.

The Indonesian government has ambitious targets to construct 24 new ports by 2019. However, red tape is getting in the way of this goal. One port operator, Pelabuhan Indonesia III, found that it took three years for it to process a single administration permit for its Teluk Lamong port project in East Java.

Franky Sibarani, chairman of BKPM, said: "If a port needs up to three years to process its administration permit, it would be very difficult to build 24 ports in the next five years." As such, it is working to reduce this time significantly.


USANA to open office in Jakarta

Global health care and nutritional supplement firm USANA has just announced that it is planning to move into Indonesia. The multinational company is already present in 19 markets around the world, making Indonesia its 20th, and its arrival looks likely to provide many benefits for the country.

One of these major benefits will be the construction of its offices in Jakarta. The Indonesian capital will see a "state-of-the-art" building created, which will be used for employee offices as well as a "will-call" centre - where customers can pick up goods from USANA's offices rather than having them delivered - a distributor meeting area and several large meeting rooms.

Kevin Guest, president of USANA, said: "Indonesia is an exciting market, and I’m confident that the people of Indonesia will embrace the message of health and freedom we have to share with the world."


State cement company sees growth

The annual shareholders' meeting for PT Semen Indonesia, the country's state cement company, was held on April 16th. The company has seen significant growth thanks to the strength of the construction industry overall, which has led to a net profit of 5.6 trillion rupiah (over $437 million) for the 2014 financial year.

The company reported that in 2014 it sold 28.5 million tons of cement, 26.16 million tons of which was sold in Indonesia. This is an increase of 2.3 per cent year-on-year, with 2013's total sales amounting to around 27.8 million tons.
This is a huge portion of Indonesia's overall cement consumption, with PT Semen Indonesia holding a market share of 43.7 per cent. In Indonesia overall, over 59.9 million tons of cement were used in 2014. In 2013 the nation's cement consumption stood at 58.0 million tons, making this an increase of 3.3 per cent.

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