Executive summary

The General Tyre and Rubber Company of Pakistan Limited (Gentipak) is

Pakistan‘s premier industry. It was established in 1963 by General Tire USA and has
been in production since 1964.

Gentipak has a Technical Services Agreement (TSA) with CONTINENTAL AG

(Germany’s largest tyre manufacturer) which enables it to produce tyres of
“GENERAL” brand and provides the latest technology for production of tyres based on
Continental’s, R&D.
The Plant and the Offices, are located in suburb of Karachi. Initial production capacity
was only 120,000 tyres per annum but is now around 2,000,000 tyres per annum. Our
plant is constantly upgraded and is equipped with the most modern technology in tyre
manufacturing.

For fulfilling our vision and demand of the day 2,000,000 tyres we set meetings to
seek how much is beneficial to import raw material of Natural Rubber from
Indonesia we go through term and condition we find that importing from Indonesia
is easy and terms and conditions are reasonable

Vision

To be the leader in tyre technology by building the Company’s image through quality
improvement, competitive prices, customers’ satisfaction and meeting social obligations.

With regards
Students of MBA(B&F)3rd

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 CONTENTS
Titles page no

1. Indonesia…………………………………………………………………………3
2. Natural Rubber………………………………………………………………….3
3. Natural Rubber in tires…………………………………………………………4
4. PEST of Indonesia for Rubber industry……………………………………..5-8
5. Rubber Market…………………………………………………………………8
6. consumption……………………………………………………………………10
7. trade flows………………………………………………………………………12
8. Marketing chain………………………………………………………………...14
9. Export Regulation………………………………………………………………17
10. Methods of Payments…………………………………………………………...17
11. Custom taxation………………………………………………………………...18
12. international transportation…………………………………………………..18
13. useful information………………………………………………………………19
14. Reference………………………………………………………………………..21

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Indonesia
Sumatra is the chief natural rubber area. Significant further cultivation districts are
located in western and central Kalimantan.
Unlike Malaysia, smallholders are largely confined to remote areas, especially in the key
NR growing area of northern Sumatra. There is a persistence of traditional production
technologies, as reflected in relatively low yields. The marketing of smallholders' rubber
is still largely carried out through a chain of dealers who often enjoy monopsonistic
positions vis-à-vis individual smallholders.
Efforts have nonetheless been made to group together smallholdings. For example, under
the Nucleus Estate Scheme smallholders were provided with small plots of high yielding
tree crops. Participating farmers in a determined location shared the benefits of
centralised technological and managerial assistance.
Indonesian estates include large publicly owned plantations and private estates. As in
Malaysia, most estates also grow oil palm and other crops. Although increasing
involvement in downstream rubber processing, there is still relatively little rubber goods
manufacturing (dominated by Bridgestone and Goodyear).
Plantations in Indonesia

Source: Guthrie's corporate website

Uses
The main uses of NR

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Because of its elasticity, resilience, and toughness, natural rubber (NR) is the basic
constituent of many products used in the transportation, industrial, consumer, hygienic
and medical sectors.
NR major end uses

Source: UNCTAD secretariat

Growth in demand for certain end products conventionally using rubber does not
necessarily translates into growth of NR consumption, owing to competition from
synthetic rubber (SR) and new materials.
NR and SR in tires
Despite the competition of synthetic compounds, natural rubber continues to hold an
important place in tire consumption. In particular, its superior tear strength and excellent
resistance to heat up makes it better suited for high-performance tires used on racing cars,
trucks and buses, and aircraft. In these applications, the potential for switching from
natural to synthetic rubber is quite limited, given the clear-cut technological advantages
to natural rubber. Breakdown by major sectors (NR and SR)

4
Source: UNCTAD secretariat (Data: International Rubber Study Group, Statistical
Bulletin)
Separate rubber compounds are used for different parts of the tire (on the weighted
distribution of the various components of a passenger tires, please refer to this section of
Michelin's corporate site; also, the table below).
Generally, the larger the tire the greater the share of natural rubber. The table below
refers to relatively small-size truck tires.
Source: Rubber Manufacturers Association (RMA)
Latex products
As for high-performance tires, technical factors (performance needs of the products and
process technology) also constrain the ease of substituting SR for NR in the latex product
market. For example, because it is waterproof (whereas some synthetics absorb water),
NR latex is best suited for use in surgical and medical examination gloves and in
condoms. NR latex is possibly the best protection against pathogens such as HIV. Latex
products include, inter alia, condoms, gloves, threads, adhesives, and moulded foams.
They found applications, including specialty applications, in different sectors, among
which is the medical and hygiene sector. .

Is a Truly Sustainable Indonesian Rubber Industry Possible?

Adapted from Zen Zahari's PhD Thesis by Tim Frodsham

Contents

1. Economic Issues

2. Environmental Issues

3. Social and Political Aspects

4. Conclusion

This is a brief overview of capability for sustainability in the Indonesian rubber industry.
It examines upstream components (extraction, collection, primary processing) and
downstream components (secondary processing, transport and marketing). It explores a
variety of approaches aimed at improving the longer term sustainability and efficiency of
the role of the rubber industry in the presently somewhat troubled economy of this largest
country of Southeast Asia. In particular, the question is asked:
Can a new approach to integrate an equation of solutions to upstream and downstream
problems in such a way that political, socio-economic and environmental problems in the
Indonesian natural rubber industry can be treated simultaneously?
As we shall see, a sustainable outcome cannot occur without substantial political change,
both in the higher echelons of Government policy making and implementation and at
grass roots village community levels. The following paper firstly examines the economic
role of rubber to the national economy, then explores the impacts of the natural rubber
industry on the environment. It then looks at the current social and political aspects of the
industry as it has so far developed. Finally, it will focus on the critical need for a new

5
approach in reducing poverty, while at the same time reducing environmental impacts of
the industry.

1.0 Economic Issues

The Indonesian natural rubber industry has always had intertwining connections between
the environment, the economy and the community.
The economic role of rubber in the Indonesian national economy and its problems in the
social sphere cannot be overlooked. Indonesia is the second largest rubber producer in the
world after Thailand.
In 1994 it produced 1.4 million metric tonnes, comprising 24 per cent of world
production. 73 percent of the total production comes from smallholders, such as the ones
pictured in the opposite photo of a 'mini-crepe' plant.
The rubber industry is a very important source of export production and provides direct
revenue for up to 12 million people, including smallholders and companies (private and
Government estates).
As the New Order Indonesian Government's industrialisation program has developed
since 1966, natural rubber production methods have concurrently incurred great
environmental and social costs; in the race to develop and diversify a wider
manufacturing base in less labour intensive, sophisticated high technology industries,
natural rubber and other agro-economic systems were neglected and subsequently lost
competitiveness in regional and global markets.

2.0 Environmental Issues

Most smallholders live on a subsistence income and their activities are mostly pre-
occupied with surviving day to day life, making it difficult (but not impossible) for them
to improve the sustainability of rubber farming practices.
Their actions, as well as other downstream activities not of their own making have led to
land degradation and reduced resources (soil, forest, air and water).
This process is intensified each year during end-of-dry-season burn offs to expand
plantation areas. Denuded forests are replaced by Alang-alang (Imperata cylindrica)
grassland, which is difficult to turn into productive secondary forest, and is mostly
useless for animal fodder. Untreated effluents from rubber processing plants also pollute
rivers, often reducing water quality to undrinkable standards.
The impact of large scale slash and burn techniques practiced by both subsistence
smallholders and large plantation owners on air pollution and human health was
graphically portrayed in 1997's unprecedented forest fire and smoke haze disaster that
systemically affected the entire Southeast Asian region.
The direct environmental and economic impacts were all pervasive: a large loss of
biodiversity, loss of more than 90 per cent of the natural carbon stock and subsequent
contribution to climate change, degradation of soil resources through erosion of treeless
gradients, emergence of new pathogenic diseases previously encapsulated within isolated

6
tracts of now burnt forest, drastic increases in respiratory diseases from smoke inhalation;
consequent loss of human productivity through illness, and loss of revenues from a
disheartened tourism sector was observed in the region during the uncontrollable
plantation fires of 1997's dry season. Revision of traditional burning practices to clear
land severely need to be re-evaluated.

3.0 Social and Political Aspects

At present, subsistence level smallholders have little economic incentive to improve their
product quality. Their bargaining power is very low. Intermediate traders who determine
the smallholders' rubber quality and its relative price, also have a double role to provide
basic food commodities for the continuation of the smallholders' often marginal
existence. Smallholders often leave contaminants in unrefined crumb rubber so as to be
paid more on the weight of their product. Hence a socio-economic power imbalance
which affects rubber quality exists here. A key mechanism to the solution for this may be
in providing low interest loans to allow smallholders to set up small companies, which
could act as trading houses (with inbuilt quality assurance), thereby bypassing the need
for intermediate traders. Another option is to provide a more regulated pricing system for
rubber quality at the village level, with financial inducements such as tax concessions.
Indonesian Government policymakers can take the lead with the appropriate action for
this situation.
Scarcity of arable land other than that used for expanding rubber plantations triggers
inflation of land prices, removing the possibility of ownership of arable land from all but
an elite few. Trends indicate that much of the land area formerly given to food crops for
villages has now been converted to cash crops (rubber and palm oil) for local and
regional cliques. This hacienda style trend of geo-economic marginalisation is disturbing
as an issue of sustainability; making local food production for village communities an
emergently critical issue. Local self-sufficiency in food production is a sustainability
criteria that is critically imperative to socio-economic cohesion. It is now evident that
Indonesia has been experiencing some of its worst food shortages in decades. Many
people in rural areas are living on diets only marginally meeting World Health
Organisation (WHO) standards for adequate caloric intake, some are in grave danger of
famine if 1998's unusually parched dry season is not relieved soon by sufficient rain. In
most areas there are no reserve supplies of rice or other dietary staples. Riots occurring in
Jakarta and other large Indonesian cities are not only attended by those with urban
concerns. Also present are the empty stomachs of those transient sharecroppers and
rubber tappers whose uprooted concerns are violently expressed in their demonstrations
for change to help end the hunger. Genuine reforms in land and other resource tenure on
the part of the Government may help to end much social unrest amongst the wider
community of rubber tappers.

4.0 Conclusion
There can also be a wide range of potential benefits from new and appropriate
technologies, both upstream and downstream. Improved efficiency in terms of arable land
use for rubber cultivation, waste management and energy use will be net potential
benefits. However, considerable resources need to be invested in training and educating
smallholders and plantation employees in the use of practices and technology needed for

7
change towards sustainability. Long term sustainablity of current slash and burn
techniques need to be reviewed. More stringent regulations on the use of biocides and
fertilizers is also essential. Legal frameworks have been set up to respond this problem in
relation to pollution, but the rubber industry does not yet comply with the existing
regulations. Moreover, a grass roots embrace of appropriate practices for sustainability in
the Indonesian rubber industry will not occur unless self-sufficiency in local food
production needs are not concurrently met with substantial re-balances of inequity in land
distribution and tenure. A simultaneous 'top-down 'and 'bottom-up' approach is a key to
success. Rubber Market
Production
The supply of natural rubber (NR) hinges upon the interplay among several factors,
including production capacity, underlying technological change, input and processing
costs as well as price differential with synthetic rubber (SR). During 1961-2005, NR
production grew on average 3.4% a year. By the early 1960s synthetic rubbers had
overtaken natural rubber in volume.
In 2005, the six leading producers -Thailand, Indonesia, Malaysia, India, China and
Vietnam - accounted for roughly 89% of world NR production. Combined output in
Thailand, Indonesia and Malaysia alone represented around 70% of the global output.
Despite the substitution effect with SR, world natural rubber production increased from
roughly 2,1 million tonnes in 1961 to over 9,1 million tonnes in 2005. According to
IRSG's predictions for 2009, the world's production rise for NR should not overcome
3.6% and 3.5% for SR. As more, Indonesia should stay the most dynamic market with a
rise of 6.8%.
NR production (thousand tonnes) - largest producers, 1961-2005

Source: UNCTAD secretariat (Data: FAOSTAT database)

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Production in Thailand has been increasing steadily during 1961-2005, from a reported
186,100 tonnes in 1961 to over 3 million tonnes in 2005 (at an average rate of 6.5% per
year over the period). It has tended to stabilize for the last two years due to bad weather
conditions (heavy rains). Thailand nevertheless remains the world leading NR producing
country. Its share of world output has also increased over the years, from as low as 8.8%
in 1961 to over 33% in 2005.
Indonesia has become the second largest producer behind Thailand. NR production in
Indonesia has been rising during 1961-2005 to reach 2.128 million tonnes by 2005
(+4.8%), at an average rate of 2.6% per year. It should be noticed however that its share
of world output has declined slightly over the years, from as high as 32.7% in 1961 to
23.3% in 2005. This was caused by much sharper rise in the output of the largest
producing country, Thailand, as well as increases in India and China.
Indonesia, NR area, production and yields, 1961-2005

Source:UNCTAD secretariat (Data: FAOSTAT database)

Consumption
Rubbers are intermediate goods used in producing final consumer goods (notably tires).
In this respect, demand for a specific type and grade of rubber is derived, since it depends
on demand for determined final goods, of which rubbers are only one component.
General income, expected price of a specific type and grade of NR and of its substitutes,
expected price of final goods, as well as relative processing costs for NR and SR can all
be regarded as having an impact on NR consumption.
The five largest NR consuming countries are China, the United States of America (USA),
Japan, India, and Malaysia. World rubber's consumption was of approximately 21
millions of tons in 2005 (+3,1%). The growth is less significant compare to the last four
years (especially 2003 with a peak of 6%). IRSG estimates that the world rubber's

9
consumption should rise of 4% per year until 2009 to reach 24.5 million of tons.
Total rubber consumption (thousand tonnes) - NR versus SR, 1998-2005

Source: UNCTAD secretariat (Data: International Rubber Study Group)

Synthetic rubbers (SR) overtook NR in production and consumption volume since the
1960s. Growth in natural rubber (NR) usage has been stronger than that of synthetic
rubber (SR) for 1998-2005 (a growth rate of 4% -annual average- as compared to 3% for
SR). NR consumption indeed grew of 5.5% in 2005 compare to 1.3% for SR
consumption, which led to a ratio of 57.7% (the weakest since 1964). Sharply rising oil
prices, which may add significantly to the costs of major SR producers, and
developments in NR pricing relative to SR (the relative NR/SR % price ratio rose from
around 80% to 120% between the start and finish of 2005) have intensified the debate
surrounding possibilities for substitution. According to ISRG's, the growth in rubber's
consumption predicted until 2009 should be more absorbed by NR (4.7%) than SR
(3.6%). The ratio for SR would therefore decrease again to reach 57.2% in 2009.
Share (%) of natural rubber in rubber consumption,
top 10 rubber consumers, 2005

Source: UNCTAD secretariat (Data: International Rubber Study Group)

10
In China (the largest single consumer of NR), SR consumption increased at an estimated
14% a year over 1998-2005 to reach 2.6 million tonnes by 2005 (up from 1 million
tonnes in 1998); NR consumption has been increasing since 1998 at 12% per year, i.e.
from 839 thousand tonnes in 1998 up to around 1.8 million tonnes in 2005.
As mentioned in the uses section, technical requirements is an important reason for using
NR over SR in many applications. The reader is referred to that section for an overview
of the relative share of NR and SR in tire versus general rubber goods manufacturing.
Trade flows
NR exports
NR exports (thousand tonnes), 1961 - 2004

Source: UNCTAD secretariat (Data: FAOSTAT database)

* Figures for NR include: NR latex; dry NR; and natural gums
** China: China; China, Hong Kong SAR; and China, Macao SAR

Indonesian NR exports also paralleled trends in production (exports have increased on

average by 2% per year during 1960-2004). In the 1990s Indonesia's share of world
exports reached its highest peak during the Asian financial crisis in 1998 at 31% (the
reason behind the relatively sharp rise in Indonesian exports during this period was
identified in the relatively weak currency). Over 1999-2004, Indonesia accounted for an
average 26% of world exports.
Malaysian NR exports have declined in both absolute and relative terms. In 2003, NR
exports dropped to about 946 thousand tonnes or 14% of the world total in 2003,
compared with 1.66 million tonnes and more than 50% in 1977. This sharp decline in
exports follows the trend in production. It should be stressed also that an increasing share
of the declined rubber output has been consumed domestically. Malaysia reported a

11
stronger export performance in 2004 (52% increase over the previous year), which may
suggests a partial reversal of the downward trend.
It is interesting to note Vietnam emerging as an exporter of some note.
Breakdown of exports by countries (%), average 1999-2004

Source: UNCTAD secretariat (Data: FAOSTAT database)

* Figures for NR: NR latex; dry NR; and natural gums

In terms of NR exports by type (dry NR versus NR latex), in Indonesia, Malaysia and

Thailand the share of dry rubber to all shipments was 99%, 92% and 81%, respectively
(average during 1999-2004).
NR exports by types (million tonnes), average 1999-2004

Source: UNCTAD secretariat (Data: FAOSTAT database)

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For all major exporters, available trade data show an increase in technically specified
rubber (TSR) at the expense of sheet grades (RSS) and latex. According to some
estimates from the IRSG (RIR, March 2004), in Indonesia the share of TSR exports to all
shipments increased significantly (from 41% to 96%) during the period 1973-2003, while
the shares of RSS and latex declined to 3% and less than 1%, respectively.
NR imports
Mainland China emerged in 2003 as the world's largest natural rubber importer and kept
its leading position with NR imports reaching more that than 1.4 million tonnes in 2004,
nearly 32% more than in 2002. This increase was fuelled by ongoing growth in demand
for automobiles coupled with stagnation in domestic natural rubber production. In
Malaysia there has been a rise in imports as a result of the rapid growth in domestic
demand for NR combined with a decline in domestic NR production.
Breakdown of imports by major importing countries (%), average 1999-2004

Source: UNCTAD secretariat (Data: FAOSTAT database)

* Figures for NR include: NR latex; dry NR; and natural gums
** China: China; China, Hong Kong SAR; and China, Macao SAR

Most NR trade is still interregional (from South-East Asia to North America and Europe),
although the increasing consumption of South-East Asian NR in Asia is enhancing the
share of that region.
Marketing chains
Production of natural rubber (NR) is regionally concentrated in South and South East
Asia; yet the bulk of consumption occurs in North America, Europe, Japan, and China.
The marketing network for NR has thus the crucial role of linking the regional
concentration of producers on the one hand and consumers on the other. It entails a
multitude of dealers, selling and buying agents, brokers and exporters, who perform
discrete but related functions at various stages of the chain.The overall marketing chain
may be examined by considering the internal and external marketing separately.
Internal marketing: Estates v. smallholdings
Rubber production is carried on in both estates and smallholdings. These two NR

13
producing sectors possess discrete organisational structures and marketing channels.
Marketing of estate rubber
NR production and processing is fully integrated in most of the bigger estates. Moreover,
a few large estates have moved downstream into rubber goods manufacturing and other
activities. Some major players in the rubber plantation industry are now diversified
industrial conglomerates which derive a small share of their income from production of
the raw product (consider, for example, the Guthrie group in Malaysia).
Marketing structures vary greatly between and within different geographical locations.
A few large estates have direct links to consumers and, in such cases, direct sales are
carried out. There may be either direct consignment to selling agents in consuming
countries (as done by agency houses) or sales to consumers' buying agents who operate
locally.
The balance of estate NR is handled through open trading. Essentially in this structure,
estates rely on dealers and brokers operating both locally (primary market) and in
consuming countries (terminal markets). Estates usually retain ownership over the
product until the final stage. Moreover, large estates normally sell forward.
Marketing channels for smallholders' rubber
The arrangements in the marketing of smallholders' NR depend largely on the size of the
holding and its integration into group schemes.
Marketing of smallholders rubber

Source: UNCTAD secretariat

First level traders and their agents collect rubber in sheet (most often unsmoked sheets)
and crepe forms from smallholders, sort and sometimes smoke it, and sell it to "middle"
dealers. From the middle dealers the rubber is delivered to wholesale dealers and
exporters, who sort, grade and pack it before shipment against f.o.b. or c.i.f. contracts.
Strategies for the development of the smallholder sector included processing via group
processing centres (GPCs). The GPC's members are able to benefit from an increase in
scale and sophistication in rubber processing. They tend to produce better quality sheets,
which are then sold to the middle- and upper-level network of traders (bulk sales through
tenders).
External marketing: Open and direct trading
Rubber commodity markets provide a channel of supply from producers to final
consumers via dealers and brokers (open trading). In addition, a few large producers may
have direct links to consumers and, in such cases, direct sales are carried out (direct

14
trading).
Marketing channels (NB: bad printed quality)

Source: UNCTAD secretariat

Open trading
In the earlier structure of NR trading, dealers and brokers openly traded rubber through
"primary markets" in Kuala Lumpur and Singapore. Rubber from these primary markets
was then forwarded to counterpart "terminal markets" in London, New York, Shanghai,
Amsterdam, Hamburg, Paris, and Tokyo. Primary and terminal markets perform an
important function in matching supply and demand and discovering prices. Two types of
trading strategies occur in these markets: spot or cash transactions involving trade in
physical commodities and futures trading.
NR handled through open trading notably involves less specialist grades (e.g., TSR 20,
RSS1 and RSS3) and crops from less developed regions, particularly in Africa.
The few dealers transacting most of the rubber on open markets are actually subsidiaries
of large companies. Major trading firms in the London market included Symington and
Son. Ltd. (along with Symington Italia Gomma Lattice of Rome, part of the Guthrie
group which controls large plantations in Malaysia) and Cargill plc (a subsidiary of the
giant grain marketing company, with trading offices in Singapore and Tokyo).
Direct trading
Direct trading between producers and consumers (especially tyre-making consumers) has
been encouraged by further developments in the rubber industry (notably, requirements
for better consistency and tailoring to consumer needs and the growth of rubber goods
manufacture in East Asia).
Direct trading may occur via sales to consumers' buying agents operating in producing
countries (for example, the rubber-buying offices set up in Singapore by most of the
international tyre companies). Yet there are also other direct outlets. In particular, a few
large estate companies and smallholder group organisations have deepened and extended
their marketing links with particular consumers, sometimes operating through selling
agents in consuming countries.
NR direct trading between big suppliers and consumers typically entails long-term
contracts of up to 18 months. Direct trading arrangements often involve specialty rubbers

15
tailored to consumer needs.
3.2 Exports regulations:
In compliance with the decree of the Ministry of Industry and Trade (n°
124/MPP/Kep/5/1996, goods or commodities that can be exported are classified into four
categories and they are as follows: goods subject to Export regulations (textiles, timber
and wooden products, sandalwood products and handicrafts, manioc and rattan products),
goods subject to inspection, goods that are forbidden for Export, goods that are free for
Export.
The specific following documents are required for exports:
Sanitary certificate: special sanitation, fumigation, and other similar certificates are
required only for the import of goods generally prohibited or restricted.
Goods originating in places infected with pests and cholera must be disinfected before
their import. The entry and Export of some plants and seedlings require a permit from the
Ministry of Agriculture or from a designated official.
Shipping restrictions: All Indonesian government imports and exports must be carried
out on Indonesian vessels.
3.3 Other formalities and documents:
Standard and special requirements:
The possibility of long storage at dock warehouses in the tropical climate, rough
treatment by Dockers and pilferage at ports should be taken into consideration in packing
goods intended for this market. Packing may be made with oil-lined paper to withstand
heat and humidity and prevent deterioration.
Methods of payments
. FINANCIAL REGULATIONS OF FOREIGN TRADE OPERATIONS:
.1 Banking system:
The Bank Indonesia has recently introduced flexibility at the level of the exchange rate of
the Rupiah along with trade incentives. This bank issues currency, supervises and
regulates financial institutions including banks. It also grants loans to commercial banks
and refinances the loans of these banks.
At the end of 1995, the banking system of Indonesia included the following banks:
240 commercial banks, 7 of which are state banks, 166 private national foreign exchange
banks, 30 joint banks, 10 foreign branches and 27 local government owned banks (for the
27 provinces).
250 financial institutions operating in the leasing sector, financing, credit cards and all
sorts of credits.
150 insurance companies for the industrial sector.

16
18 pension funds for industrial growth.
5. CUSTOMS TAXATION:
Within the framework of the ASEAN-AFTA, a progressive import liberalization is
emerging between Member States. The decrease in customs duties is due to the efforts
made by the Indonesian government to fight inflation and to the WTO agreements.
5.1 Applicable duties and taxes:
6. FOREIGN TRADE LOGISTIC:
International transports:
Maritime transports:
There are more than 300 ports in Indonesia, 133 of which are devoted to foreign trade
activities. The main ports are: Tanjunk, Priok near Jakarta, Tanung Perak near Surabaya,
Begawen near Mena and Ujunpandung in the south of Sulawesi. Daily sailings are
available between Belawan and Penang int Malaysia.
Air transports:
Indonesia’s national airline is Garuda (GA). The international airport Soekarno-Hatta is
20 km northwest of the city (travel time-45 minutes). A bus goes every 30 minutes to the
city from 6.30 a.m. to 900 p.m. Other buses link Jakarta to Halim Perdanakusuma airport
(HLP) 13 km south east of the city. There are also Polonia Airport in Medan, Ngurah Rai
airport 13 Km south of Denspar, Juanda airport near Surabaya, Ratunkangi airport in
Manado and Hasanuddin airport near Ujung Pandang.
There are other airports for internal services, these are Kemayoran, Bouraq Indonesia,
Merpati Nusantara and Sempati.
Land transports:
Railways
Trains connect every day Belawan and Penang through the National Railroad of
Indonesia.
The railroad is 6,362 km long and is situated between Sumatra, Madura and Java. There
are three railroads:
North railroad: Sumatra-Belawan-Medam and Tanjoung Balai/Rantu Prapet (2 to 3 trains
per day).
South railroad: Palembang-Panjang (3trains/day).
Railroad leading to Java.
Birma express links Jakarta to Surabaya.
Road networks:

17
There are roads between Kalimantan and Sarawak and Sabah Malaysian States in Borneo
Island and Irian Jaya and Papua New Guinea. The road network extends over more than
245,000 km of which 200 km are on the motorway. There are good road links between
Java, Bali and Sumatra.
With a view to increasing foreign investments, West Irian has been provided with a
highly developed communication infrastructure between Jayapura and foreign countries.
6.2 Telecommunications:
P.T. Telekom (Domestic and telegraph services) provides telecommunications services,
P.T. Indosat (International telecommunications) and P.T. Pos Indonesia (Postal services).
Thanks to Indonesia’s satellite programme (Palapa) telecommunications in Indonesia are
of good quality. There are telephone links with 27 provinces and other centers. There are
159 telephone lines per 1000 inhabitants. Apart the usual telephone system, cellular
phone (GMS, AMPS and NMT), are more and more widely used, in 1996 subscribers
were more than 300,000 and pager subscribers 400, 000. Postal services will be installed
in 40% of villages.
6.3 Distribution system:
In compliance with regulations established by the Indonesian Government, Indonesian
companies only may carry out the import, Export, wholesale and retail distribution of
imported or locally produced goods. Foreign investors are not allowed to undertake the
distribution of products in the local market.
Foreign companies may open a local representative office with the authorization of the
Indonesian Ministry of trade and Industry. But only one representative office per firm is
allowed.
The largest markets are located in Java, Jakarta, Sumatra, Sulawesi, and Kalimantan.
7. USEFUL ADDRESSES:
ORGANIZATIONS AND PUBLIC ESTABLISHMENTS ADDRESSES
TEL/TELEX/FAX
Ministry of Trade. Department of Trade 7th Floor Centre for International Trade
Relations 5, JI. M. I. Ridwan Rais Jakarta 10110 Tel: (6221) 3841961
Fax: (6221) 3522749
National Agency for Export Development 8, JI. Gajah Mada P.O.Box 443 /JKT Jakarta
10130 Tel: (6221) 3841072

Fax: (6221) 3848380

Indonesia Exporters Federation Sudirman Tower 8th Floor , 60, Jalan Senderal
Sudirman Jakarta 12190 Tel: (6221) 5226522

18
Telex: 60966 ia
Fax: (6221) 5226528
Indonesia chamber of commerce and industry Chandra building , Jalan M.H.
Thamrin 20 Jakarta 10350. Tel: (6221) 324000
Telex: 61262
Fax: (6221) 3150241
Director General of Customs and Excise. Department of Finance JI Jend. A. Yani
P.O.Box. 108 Jakarta 13230 Tel: (6221) 4890308
Fax: (6221) 4890871
Bank of Indonesia JI. M. H. Thamrin 2 Jakarta 10010. Tel : (6221) 2311180
Fax : (6221) 2311550

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References:

1. General ti
http://ww
2 . Murdoch
www.istp

3. UNCTAD 20