PT Bosowa Corporation

Bosowa recently got its first investment from this region from Jordan's cement and clinker trading company, CTI group. Are you making efforts to get more investment from the Gulf?

Which are the sectors that can draw Arab investment to Indonesia?

Indonesia has been promoting the country to several investors. So far, investment flows have been mainly from Japan, Korea and Singapore. Now, there is an increased focus on inviting participation from places that have high liquidity. The GCC is a highly important focus area for us. Indonesia has huge potential in natural resources, agriculture products and infrastructure, and also downstream business of oil and gas. These are the areas where Indonesia is promoting itself actively, especially those countries that have high liquidity such as the GCC states. Several partnerships have been signed by companies in the mining sector and there are companies here which are interested in our property sector and telecommunications.

So all things to do with infrastructure – roads, ports, bridges, public utilities – offer a lot of opportunity. The sectors that account for 80 per cent of the country's GDP, such as oil and gas, mining and energy, agriculture and banking and finance, are not running at full capacity due to insufficient development and technology and present a lot of opportunity. Middle East investors are actively coming but we are yet to see big numbers, as Indonesia is [trying] to create attractive packaging when it comes to investment opportunity. This is being done by the government.

Why is the Middle East so important to you?

The Middle East is important not only to Indonesia, but to the whole world, since it has a lot of liquidity backed by oil revenues. Indonesia has a population of 230 million, 70-80 per cent of which is Muslim. With a connection like this, we think the Middle East is well placed to invest in that country. Not only will that connection help but, in addition, we also have policy [in place] to make investors feel comfortable. We are improving our FDI (foreign direct investment) policy, giving fiscal and non-fiscal incentives to foreign investors.

Which investors are you targeting from the region?

We are targeting those who are strong in petrochemicals and mining. We are targeting sovereign wealth funds for our infrastructure projects. For Bosowa, the four major sectors where we seek investors and where there are real opportunities in Indonesia for high growth and expansion are consumer financing, energy, infrastructure and petrochemicals.

Consumer financing opportunities emerge from the booming middle class, whereas investment in the energy industry, including in alternative energy, is based on declining domestic supply and global supply constraints. Developing infrastructure is on top [of the] agenda of the government and Bosowa is already strongly positioned on that. Petrochemicals is a natural derivation of growing middle class and largescale industrialisation and it is also a sector in which global demand outstrips supply.

Indonesia offers the Middle East investors access to the biggest Islamic market and also high returns. With a population of more than 230 million, it has the largest Islamic market.

Now, we are looking at investors from the Middle East who are familiar with Shariah compliance who can bring business models to Indonesia.There are a lot of new and rectified policies, and the purpose is to improve and encourage more funds inflow into Indonesia.

PROFILE: Erwin Aksa President Director of Bosowa Corporation
Aksa is also Chairman of the Indonesian Young Entrepreneurs Association (HIPMI). Currently, he is busy restructuring Bosowa Corporation to meet Indonesia's massive infrastructure needs, particularly in the eastern region. Aksa has been an active member of HIPMI since 1995, which has 30,000 members.
He is a graduate of the University of Pittsburgh.