TRADE

Chinese firms power on with Indonesia planChinese companies are likely to continue to participate in Indonesia’s second 10，000 megawatt (mW) national power development plan， following a record of successful cooperation during the first program， said officials and corporate leaders from both countries according to China Daily.“It is very likely that we will continue to cooperate with Chinese companies on the projects for the second power program，” said Dahlan Iskan， president director of PT Perusahaan Listrik Negara (PLN)， the Indonesian state-owned power utility and also the owner of the first power plan’s projects.“Indonesia still has a power shortage of 35，000 megawatts.” Nine out of 10 projects in Indonesia’s first fast-track power program are managed by Chinese consortia or companies， according to Zhang Weidong， executive vice president of the China Export Credit Insurance Corp (Sinosure).He said as a State policy financial organization， Sinosure has been leading financing negotiations involving many power plants， amounting to US$4 billion， and the company plans to expand cooperation with the Indonesian government and local companies.Zhang also said that some Chinese companies are holding talks with Indonesian officials and companies to develop the second power program. “They may invest， build and operate these power plants， becoming a shareholder instead of merely a contractor，” he said.The first large-scale power plant built under the first program with Chinese participation in Indonesia was completed on Oct 12. That plant will greatly ease electricity shortages in the region， said Coordinating Minister of Economy Hatta Rajasa.The Indramayu coal-fired plant in West Java was one of the earliest projects in the 10，000 mW fast-track power construction program created by the Indonesian government to ease local electricity shortages.The project was started in 2007 in Indramayu， West Java. The owner is PLN and the contractor is a consortium composed of China National Machinery Industry Co Ltd (Sinomach)， China National Electric Engineering Co Ltd (CNEEC) and an Indonesian local company.Ren Hongbin， chairman of Sinomach， said the company sees Indonesia as a strategic market and plans to expand its business in the country.“We have participated in many local infrastructure projects in Indonesia in recent years，” said Ren.The project is a successful example of the overseas business model of Sinomach and also a turning point in CNEEC’s overseas development， said Zhao Ruolin， president of CNEEC， the company in charge of the completion of the project.“We are not only focusing on particular projects but also the potential of the market here，” said Zhao.“We have given much respect and importance to the local people’s faiths and habits. We built a mosque near the power plant for the local workers to pray conveniently.”Rajasa said the project is “the best energy project in the Indonesian power plant construction history so far”.He said the government plans to ensure every island in Indonesia has sufficient power supply by the end of 2014， which will require an annual increase in capacity of 3，000 mW.The Indonesian 10，000 mW power plant program is a good example of bilateral cooperation. The completion of the first project has shown the competitiveness of China’s equipment manufacturing and engineering technology， said Wang Shengwen， deputy director of China’s Ministry of Commerce.He said that Chinese companies should make full use of the business opportunities created by the ChinaASEAN Free Trade Area and increase investment in Indonesia.“The Chinese government will keep supporting domestic companies to participate in infrastructure construction including roads， bridges， harbors， power plants and the communications sector in Indonesia，” said Wang.“Meanwhile， we hope that the Indonesian government can provide policy support to Chinese companies for more investment.”Kuwait-China refinery helps oil cooperationKuwaiti Oil Minister Mohammad Al-Busairi said Sunday that the China-Kuwait joint oil refinery would help promote cooperation between the two countries in the oil sector， according to Xinhua.The US$9-billion project is one of the pillars of the Kuwait Petroleum Corporation (KPC)’s expansion strategy for 2030， Al-Busairi said when meeting with Wang Tianpu， president of the China Petroleum and Chemical Corporation， or Sinopec.During the meeting， Al-Busairi and Wang also reviewed the latest developments of the joint refinery that would be built in southern China’s Guangdong province.The project， expected to be completed in 2013， would have an oil refining capacity of 300，000 barrels per day and will also produce 1 million tons of ethylene per year.The refinery is among China’s largest joint ventures in the oil sector when put into operation.Kuwait， the fourth largest exporter in the Organization of Petroleum Exporting Countries (OPEC)， has a strategy to increase its daily output to 4 million barrels in 2020 and retain the level till 2030.Chinese firm builds light rail in Vietnamese capital HanoiThe China Railway Engineering Corporation (CREC) on October 10 kicked off construction of a light rail and depot project in Vietnamese capital Hanoi， according to Xinhua.Vietnamese Minister of Transport Dinh La Thang， Head of the Hanoi People’s Council Nguyen The Thao， Chinese Embassy Charge d’ affaires Jiang Zaidong and representatives of the general contractor for the project， the Sixth Bureau of the CREC， attended the ground breaking ceremony.Addressing the ceremony， Thang said the Vietnamese government attaches great importance to improving transportation infrastructure and solving the traffic congestion in big cities. Cac Linh-Ha Dong urban rail project is an important part in Hanoi urban rail network in the future. The project will effectively alleviate traffic congestion and promote economic development in the capital.Jiang said the project is of special significance on the occasion of the Communist Party of Vietnam (CPV) Central Committee General Secretary Nguyen Phu Trong’s upcoming visit to China and the 20th anniversary of normalization of China-Vietnam relations.“The project will strengthen mutually beneficial cooperation between China and Vietnam. I hope the project contractor and the Vietnamese authorities will work together to complete the project with success and make a positive contribution to further the China- Vietnam friendship and cooperation，”he said.Zhao Zhanhu， general manager of CREC Sixth Bureau， said the bureau， with rich experience in rail construction and a scientific management system， will apply the scientific and technological advantages to the project to ensure the project to be completed on schedule with first-class quality.Tsingtao Beer to open brewery in ThailandFacility will mark expansion efforts into ASEAN， European markets， according to China Daily.China’s brewery giant Tsingtao Beer announced in October that it plans to set up its first overseas plant in Bangkok， the capital of Thailand， as a significant step towards globalization for the century-old brand， which was introduced by the Germans 108 years ago.The plant， which will begin operations in early 2013 with an estimated total investment of US$100 million， will have an annual production output of 200，000 liters and will create hundreds of local jobs， said Jin Zhiguo， chairman of Qingdao， Shandong-based Tsingtao Brewery Co Ltd. The company’s branch in Thailand， operating as Tsingtao Beer(Thailand) Co Ltd， will be the sixth-largest brewery in terms of production output in the world.“The exploration of the Southeast Asian market will be the first stop for Tsingtao beer in the quest to expand to European and Oceania markets，” Jin said. “It is a solid step towards multinational management after careful preparation and accumulation.”The establishment of the Thai plant aims to ride on the enormous market volume and growing demand.“Thailand has an important geographical location among the 10 ASEAN countries， with a complete market economic system， an open investment environment and a climate for all-year-round beer consumption，” Jin said at a signing ceremony on Monday morning in Bangkok.The brewery exports beer to more than 70 countries around the world. The overseas plant is expected to expand its market share in the Southeast Asian and European markets， according to a statement from the company.Jin said the company’s first step towards internationalization traced back 100 years ago， when the British and German merchants brought yeast and beer-making techniques to Qingdao. Three years later， the beer company won a gold medal at the Munich Beer Festival.The Thai project marks another step towards further capital internationalization and the globalization of resource allocation and supply chain management.“Localized production for local supply will provide greater efficiency in management and supply chain， improve product freshness and quality， and enhance international competitiveness，”Jin said.“It is the time to go global to introduce our beer to different countries. We want Tsingtao beer to penetrate people’s lives through the value we create to local consumers， communities and governments，”Jin said.Economic and cultural exchanges between China and Thailand have been growing rapidly， laying the foundation for Chinese companies to invest in Thailand， said Li Qun， the mayor of Qingdao.Local sources said beer consumption in Thailand has been on the rise along with growing tourism.“As a world-renowned brand， Tsingtao beer enjoys a great reputation among the Thai people for its century-old traditions of beer making. The project will bring us not only quality beer， but also advanced technologies and management methods， thus contributing to our nation’s beer industry，”Witoon Simachokedee， permanent secretary of Thailand’s Ministry of Industry， said at the ceremony.The project will likely benefit Thailand’s agricultural industry， as Thailand abounds with rice， an important raw material of beer.Zhang Yi， associate professor of the University of International Business and Economics in Beijing， said emerging markets， including China and ASEAN (Association of Southeast Asian Nations)， are the latest battlefields for global brands.“Emerging markets not only have a great potential for consumption， but also provide favorable policies and preferential tariffs， which can bring concrete benefits to companies，” he said.“After Tsingtao Beer establishes its branch in Thailand， tariffs can be avoided， logistics can be shortened and freshness of the beers can be guaranteed. It will lower tax rates for Tsingtao Beer in the Southeast Asian markets，” Zhang added.