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Economy & Business

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	Main Prospects: Agriculture Fisheries Tourism Mining & Energy Education & Human Resources Development Services Analysis: North Sulawesi represents one of the more politically stable provinces in Indonesia. It has a strong history of religious and ethic tolerance as well as some western cultural influence. Its overall investment climate has always been positive towards foreign investment. The need for an outlook economy and "investor friendly" environment has created a policy of accommodation for possible investors due to the realization of the importance for FDI (Foreign Direct Investment) in order to maintain a positive balance of trade in its economy. This is coupled with the fact that a new legislation has given the province far greater autonomy in 2001. The business community through KADIN (The Chamber of Commerce and Industry) perceives an inevitable wave of change it is ways of doing business. KADIN has created a new paradigm that will become the underlying priciple on how busines should be conducted. The business community will have to conform to International Business Practices in order to create new relationships with the rest of the business world. The objective of KADIN is for its members (and the business community as a whole) to be able to create value-added sustainable business in North Sulawesi optimizing regional business opportunities. The pinnacle will be determined by the ability of KADIN to become an effective medium in bringing businesses in North Sulawesi together and taking advantages with regional bodies such as BIMP-EABC. It is necessary to understand that the two milestones that have created a significant impact on the business environment are increased autonomy for North Sulawesi in the year 2001 and AFTA for its ASEAN members in the year 2002. The key to long term benefits in North Sulawesi is in the ability for the investor to capitalize on the province's strategic advantages and identify the key barrier of entries for its business. North Sulawesi's potential remains immeasurable for the investor that has the foresight and resilience to search for these elements. Business Prospects Coconut Oil Processing Most plants are smal scale oil producing plants that cater only to the domestic market. There are quite a number of these plants around North Sulawesi, since the province holds the highest coconut density in Indonesia. All small coconut oil plants are labour intensive and raw materials are purchased at farmgate prices. The manufacturing process results in a powdery by product that can be used as main ingredient in fishmeal and other animal feeds. In addition, coconut husks are sold to manufacturers of activated carbon. Prospects: Modern coconut oil processing plant and activate carbon plant Traditional Handicraft Indonesia is generally known for timber and wood products, owing to its large forest areas. Hence the country's handicrafts - specifically North Sulawesi's (whether it is from wood, ceramics, or other materials) may perhaps rank as export-quality. Currently, these handicrafts serve the toursit market of Manado, so Kadin is encouraging crafts traders in larger urban centers of ASEAN and Hongkong to explore the possibility of selling North Sulawesi's handicraft in their shops. Prospects: Supply to retail outlets overseas Knockdown Houses Many would characterize Indonesia's knock-down houses as "simple and practical". Constructed from different kinds of wood, these houses are built on a made to order basis. The house is first erected with floors, walls, ceilings and roof, and disassembled when ordered. These are then shipped in 20 or 40 foot container vans to their destinations, where they are assembld on the spot. Five of these houses have already been shipped to Mindanao, and agenting of these houses are encouraged in other areas of EAGE, nd internationally as well. Prospect: Distribution in Singapore, Brunei and Malaysia wanted Coconut Wood Furniture Fine coconut furniture can be found in Indonesia. From beds to headboards to tables and chairs, to cabinets, the coconut furniture manufacturing plant in North Sulawesi can make them all. Because it uses only wood from trees no more than 12 meters hihg, difficulty is encountered in purchasing fine coconut wood. That, coupled with a large number of customer orders, has led to a one year waiting period from order to delivery. Therefore, coconut woodworking and furniture manufacturing qualifies as potential investment area in North Sulawesi Prospect: Factory for large scale production Bitung Industrial Estate The industrial estate in Bitung is a 250-hectare field divided into an export zone, wet and dry factories, housing, and recreation, among others. A key factor in the Estat's growth is the completion of the Bitung International Container terminal, expected 2001. Japanese investors have already provided the required funding, and construction has begun of late. Further, industry-rich Taiwan has indicated an interest to relocate about 150 factories to the Bitung Estate when contained terminal operations kick in. To date, the Bitung Industrial Estate is open to investment. Special incentives apply to firms investing especially in the export-processing zone. Prospect: Manufacturers looking for low-cost production centers. Likupang Tourism Estate Sprawled over 450 hectares, the Tourism Estate in Likupang (northernmost town in Sulawesi Island) includes three hotels, two golf courses, diving and water sports, retirement homes and medical facilities in its masterplan. The first hotel, Paradise Resort Hotel is operational and can cater to 100 guests (full plan totals 315 rooms). Already, the Meridien and Sheraton groups have expressed interest in joining the Estate, and the Estate Manager further plans to invite the Holiday Inn group to manage Paradise Hotel in the future. Similar to the Bitung Industrial Estate, a key factor in the development of the Tourism Estate has been the completion of the new passenger terminal at Sam Ratulangi International Airport in 2000. Subsequently, flights from Japan to Bali may be allowed (and encouraaged) to stop over in Manado. Prospects: Investments in one of North Suawesi's brightest long term economic potentials. Large Industries Apart from the home indsutries (as locals would call it), large joint ventures and Indonesia companies including PT. Jaka Sakti Buana (desiccated coconut manufacturing), United Can Factory, PT. Sinar Purefoods (tuna canning), and PT. Indofood (pack noodles) are established in North Sulawesi. Other Trade and Investment Prospects Agricultural Produce North Sulawesi's soil is highly fertile, making it a high-yield area of crops like corn, onions, cloves and potatoes. It was reported that a large amount of these harvests (particularly potatoes) supply the island of Java and other provinces. Even so, Indonesia's cheaper agriculture produce can still cater to consumer markets of EAGA and ASEAN. Marine Tourism and Cruises North Sulawesi has almost limitless opportunities in marine tourism and cruises, owing to its state-protected reefs and abundant aquatic life. A stopover at Manado/Bitung while on a cruise may be worth the tour package, with tourists getting a taste of North Sulawesi's ethnic heritage and modern culture. Seafood Canning Seafood canning is another of the province's potentials. In addition to Bitung's tuna canning plant, investors may want to consider canning other aquatic resources, such as squid, sardines and mackerels, and clams and mollucs. Indonesia's cheap, yet skilled, labor has alreadyproven North Sulawesi to be a viable location for PT. Sinar Purefoods. Granite Quarrying Granite-quarrying operations are also said to be workable. This prospect's attractiveness holods more water in light of ASEAN's construction industry showing some signs of recovery. With improved shipping operations expected upon the completion of the Bitung International Container Port in 2001, shipments of granite from North Sulawesi are expected to come about more efficiently. Source: Kadin Sulut - North Sulawesi Chamber of Commerce and Industry		For more information about the opportunities and procedures for doing business in Minahasa, Manado and Bitung, please contact: KADIN Sulawesi Utara (The North Sulawesi Chamber of Trade and Industry) Jl. A.A. Maramis No. 282 B. Lapangan Kecamatan Mapanget, Manado Sulawesi Utara - Indonesia Tel. (62-431) 813-808 Fax (62-431) 813-553 Email: kadin@manado.wasantara.net.id Fortunes large and small have been made from the cloves, which are mainly grown on the slopes of the Minahasa region. The cloves are exported to Java, largely to be used in scented kretek cigarettes. Coconut wood furniture Rice is largely grown around Lake Tondano, where most fields are irrigated and three harvests per year are possible. Knockdown Houses from Woloan. This is the center of the cottage industry of the Minahasan Traditional Houses, no pun intended. Arriving at the village, drive down the lane and both sides are lined with various models, shapes and designs. The prices begin at less than $1000 US and continue up to $10,000 US for a large all wood frame house, complete with roof, hardware, floors, knocked down and delivered and constructed on site. The only drawback is that this price only includes assembly in the Manado/Bitung area.
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