Knock knock... Jambi here
SINGAPOREAN companies looking for regional investment opportunities could have a new option in the east coast province of Jambi in Sumatra, Indonesia, located a mere 50-minute plane trip from the Republic.
Bordered by the Riau province to the north, West Sumatra in the west and the Berhala Strait in the east, Jambi boasts lush greenery and fertile land fed by Sumatra's longest river, the Batang Hari, which runs through the heart of the province.
Jambi, which has a population of 2.6 million, is aiming to become the destination of choice for Singapore businessmen looking for opportunities in sectors such as oil and gas, agriculture and forestry.
And interested companies will get a helping hand from a newly signed joint venture between Singapore's mainboard-listed engineering company Federal International and the Jambi Info Trade Centre (JITC).
At a ceremony in Jambi last week, Federal signed a joint venture agreement with the JITC to promote investment opportunities in the province. This includes the setting up of a company to provide information and advisory support to Singapore companies which are keen to explore the investment opportunities in Jambi.
The company will be set up with an authorised capital of US$500,000 (S$858,000) and a subscribed and paid-up capital of US$125,000.
Federal will hold an equity stake of 50 per cent in the company with the balance being held by the JITC.
Federal said that its share of the joint venture would be funded by internal resources initially, and that it is not expected to have any material impact on its net tangible assets or earnings per share for the financial year ending Dec 31.
Federal executive chairman and chief executive officer Koh Kian Kiong said that Jambi offered an abundance of unexploited marketable natural resources, particularly in the oil and gas sector.
PetroChina, China's largest listed oil company, has a significant presence in the province after it acquired United States-based Devon Energy's assets in Jambi in 2002, which included reserves of about 80 million barrels of oil.
JITC director Aris Adhianto said that Singapore's proximity, its status as the largest financial market in South-east Asia, and the recent US-Singapore free trade agreement meant that it would be a valuable trade partner for the province.
'If we can get a ticket to Singapore, then we can get a ticket to the rest of the world,' he said.
Mr Koh said that the low costs of labour and land meant that Jambi offered valuable opportunities in other sectors as well, such as construction, water supply, and solid and water waste processing.
'We may also look further afield and promote Jambi to businessmen from other countries and not just Singapore,' he told The Straits Times in Jambi last week.
He also said that Federal was hoping that by bringing in more companies to Jambi, it would be able to find partners to enter into larger deals with.
'There are some deals, such as oil concessions for example, which are too big for Federal to bid for alone.'
Potential partners in Jambi included Singapore engineering companies Tiong Woon and Rotary Engineering, he said. Representatives from Tiong Woon and Rotary were invited to Jambi by Federal last week as part of a delegation that also included executives from port solutions company Portek, Plant Engineering Construction and International Enterprise (IE) Singapore.
IE Singapore's director for international operations in South-east Asia, Mr Yew Sung Pei, said at the ceremony that Federal's latest project was a boon to Singapore businessmen.
'People are always going to China to invest, but there are all these good opportunities closer to home. We definitely support this initiative,' he said.
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