Jakarta's investment beef
Jakarta has turned up the heat on Australia to make a stronger financial commitment to business growth in Indonesia after a big fall in investment last year.
The Indonesian Investment Co-ordinating Board (BKPM) highlighted the lack of investment in spelling out its expectations for joint ventures built around the Australian cattle industry.
BKPM deputy chairman of investment promotion Himawan Hariyoga said Australia should view Indonesia as a processing and marketing base for its cattle and beef.
Mr Hariyoga said that across the board Australian investment in Indonesia was not what you would expect from two near neighbours and had fluctuated in recent times, with new investment falling from $US744 million in 2012 to $US226 million last year.
He told a major conference of cattle and livestock industry leaders in Broome that despite Australia being Indonesia's biggest trading partner in the sector, its investment lagged behind countries such as Thailand, Malaysia, the United Kingdom, the US, Switzerland, Hong Kong and South Korea.
Apart from a major joint venture between Australian cattleman Garry Hill and Indonesia company Ficorp on the island of Sumba, BKPM said Australian interests had invested only $US6.3 million in the cattle and livestock sector since 2004.
Mr Hariyoga said he hoped the figures made it obvious as to why "we expect more investment from Australia, our main trading partner in the cattle business".
BKPM believes the two countries can use their competitive advantage to supply not just Indonesia's domestic market but other ASEAN countries, too.
"The opportunity is huge and yet the realised investment still small," Mr Hariyoga said.
"We would like Australia to more seriously consider Indonesia as a production and marketing base for Australian beef and cattle products."
Indonesia is expected to pursue its ambitions strongly when the Indonesia-Australia Partnership on Food Security in the Red Meat and Cattle Sector meets for the first time this month.
Former prime minister Kevin Rudd allocated $60 million to the industry group last year. It is believed Indonesia insisted on the term "food security" being used in the title as the two countries explore cross investment in cattle production and the beef supply chain.
Santori, the beef division of Indonesia's Japfa Foods, bought two cattle stations in the Northern Territory last year and there is speculation more investment in northern Australian production assets will follow.
Live exports to Vietnam rose almost 2000 per cent last year to 66,951 head, the Malaysian market was up 45 per cent to 47,620 and Japan up 21 per cent to 13,639. Sales to Indonesia, by far Australia's biggest customer, increased 63 per cent to 454,152 and are expected to reach 720,000 this year.
