Jl. Gatot Subroto No. 44Jakarta 12190, PO. Box 3186Indonesia.

p. +6221 5292 1334 f. +6221 5264 211www.bkpm.go.id e. :info@bkpm.go.id

RUBBER

INVESTMENT

Ÿ Manufacturing Plant Labour Costs (US$) By job type and CountryAccording to the Financial Times, the average labour costs per head in a manufacturing plant are more efficient in Indonesia compared to the other four major ASEAN countries, including the labour costs for: Production Managers and Unskilled Production Operators.

Ÿ Investment Opportunities in Rubber Downstream Industry

GOVERNMENT PROVISIONS AND SUPPORTS

Negative Investment List - Presidential Regulation No. 39 of 2014

Investment in the plantation business is opened widely with up to 95% foreign ownership for areas of 25 Ha or more, with or without processing unit. Meanwhile, investment to produce rubber related products such rubber glove and rubber shoes is also opened widely to investor with up to 100% foreign ownership.

Indonesia Investment One Stop Service (OSS) Center and Marketing Officer

Indonesian President, Joko Widodo, officially launched the Integrated One Stop Service Centre (PTSP) at Indonesia Investment Coordinating Board (BKPM) in early January 2015. This service aims to smoothen and simplify licensing procedures for investment projects. From now on, investors will not need to visit various ministries or government agencies to obtain necessary permits but can simply turn to the BKPM's OSS centre. In addition, currently the BKPM has established what so called Marketing Officers (MO) who will take care any investment interest to explore investment opportunities in the country. The contact of MO is Directorate of Sector Promotion, BKPM (Phone: [62-21] 525-2008 Ext: 3568, Fax: [62-21] 5288-0390, Email: info@bkpm.go.id).

Local PartnerA host of organizations supporting Indonesia's agriculture and food and beverage sector are growing in prominence, are academic centers of excellence.

www.bkpm.go.id

RUBBERINVESTMENT

s an emerging global powerhouse in Asia, with a GDP Aexpected to reach US$ 1 trillion in 2014, Indonesia is the largest economy in Southeast Asia. Much less affected by the global financial crisis compared to its neighboring

countries, Indonesia's economy grew around 5.5 % in 2013, making it “The World's Most Stable Economy in the Past Five Years” according to The Economist magazine.

In line with its growing economy, Indonesia has become an a�rac�ve investment des�na�on for various industries, including the rubber industry. Being the second world's largest rubber producer, Indonesia supplies a substan�al amount of rubber to the interna�onal market. The rubber industry also significantly contributes to the country's non-oil foreign-exchange earnings, and plays an important role to trigger the growth of new economic centers in rubber development areas. Therefore, opportuni�es to invest in the rubber industry par�cularly in the downstream industry are widely opened.

WHY INDONESIA?Ÿ About 70% of the world's natural rubber is produced in Indonesia,

Malaysia and Thailand. Indonesia is the world's second-largest rubber producer supplying a significant amount to interna�onal producers of semi-finished products. As much as 15 % of rubber produc�on in Indonesia is used for the domes�c material industry, meanwhile the remaining 85 % is exported.

Ÿ The Government of Indonesia is commi�ed to promote the rubber industry by strengthening the infrastructure to support the transporta�on facili�es for the industry. The government also provides technical assistance for investors in the planta�on industry delivered by the numerous rubber research centres located in Bogor, Medan and Palembang.

The Interna�onal Rubber Study Group (IRSG) es�mates that World Rubber consump�on un�l 2020 would increase at an average growth rate of 6.7%. Almost half of Indonesia's ruber produc�on that is exported is shipped to other Asian countries, followed by North America and Europe. The top-5 Indonesian rubber impor�ng countries are the USA, China, Japan, Singapore and Brazil. The domes�c rubber consump�on accounts for the supply to Indonesia's manufacturing industries (in par�cular the automo�ve sector and technical rubber products).

Advantages: Current and FutureŸ Produc�on and Exports of Natural Rubber

Ÿ Investment in Downstream Rubber IndustryData of rubber industry, rubber based-product and plas�cs.

Ÿ Poten�al Growth of Rubber Industry in IndonesiaThe rubber industry in Indonesia currently focuses more on producing and expor�ng semi-finished goods rather than producing finished products.

However, for the domes�c consump�on, most of the natural rubber produced in Indonesia is consumed by the �re industry that accounts for 61 % of the domes�c use, while the consump�on for produc�on of gloves, shoes and other products account for 14%, 12% and 13% respec�vely. The rubber industry in Indonesia in 2011 reached 3.5 million tonnes. There are 385 downs tream rubber industrial companies which employ 107,927 people.

As the second-largest rubber producer, Indonesia supplies a substan�al amount of rubber to the interna�onal market. Since the 2000's, the Indonesian rubber industry has shown a steady increase in produc�on. Indonesian dry rubber produc�on has increased by 54%.

In Million Tonnes