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Dear Fellow Shareholders

While the world is shifting around us, it may be useful to take a step back and remind ourselves of the fundamentals of Indonesia. Indonesia is the 4th largest country by population (273 million). The economy is the 16th largest based on nominal GDP (S$1.12 trillion) and 8th largest based on purchasing power parity adjusted GDP (S$3.34 trillion).

Over the last 20 years,

Along with these fundamental improvements, the country is following a similar path of many developed Asian economies by transitioning from a low-cost export driven focus to one more balanced among domestic consumption, higher value-add exports, as well as knowledge-based economy. While wage growth has dampened the benefits of basic labor-intensive manufacturing, Indonesia has been able to move up the value chain especially with its cooperation with Singapore for R&D, finance, and its world class transportation infrastructure. Furthermore, the value-add component for commodities has increased and should show benefits as we enter into the next commodity upcycle.

With regard to our company’s competitive advantages, we believe our portfolio of businesses continues to be in excellent position to capture value from these macro-economic factors.

PT Indomobil Sukses Internasional TBK ("PT IMAS")

The strong growth of the middle class has driven the growth in PT IMAS automotive segment. However, the capital-intensive nature of the business led us to review our majority stake in PT IMAS, and during the course of 2020 we did not participate in the capital raising exercise, thus diluting our stake to 49.49%. The resultant deconsolidation caused us to book a non-cash loss of S$595.7 million. Nevertheless, we believe the prospects of PT IMAS are strong, and we intend to continue to support our investment. Some significant highlights include adding new brand distributorships such as Jaguar/Land Rover to the strong portfolio of Nissan, Hino, etc, as well as continued excellent execution of the strategies in financing services, logistics and petrol retailing, in each of which has become significant or dominant players in relatively short timeframes.


Our utilities business depends on the occupancy in our industrial parks and our resorts. While the industrial parks occupancy is strong, the reduced operations at the parks and in the resorts in the first part of the pandemic resulted in lower utilities revenues in 2020. Utilities revenues going forward will depend on the startup of our new tenants in the industrial parks in 2021 and the resorts coming back online. However longer term, the outlook is good with the high occupancy rates in the industrial parks and as such we have invested this year in additional capacity for our Batamindo Industrial Park.

Industrial Parks

Among industrial parks in Indonesia, our rental rates are among the highest, and yet we are hitting new records in terms of occupancy. The benefits of our fully integrated international standard services, plus our close cooperation with Singapore for R&D, finance and logistics, mean companies who are looking for higher value-add production sites outside China often choose our locations in Bintan and Batam. As a result of our full occupancy in Batam, we have added 40 hectares of land to our Batamindo Industrial Park, and we continue to make investments such as improving our power plants to ensure the provision of international standard of service to our tenants. Other initiatives, including hi-tech greenhouse facilities to provide high quality fresh vegetables, and an offshore marine services base to support Singapore’s strength in the marine sector, show our continuing symbiotic relationship with Singapore. The growth of these higher value-add industries in our industrial parks show how Indonesia is moving up the value chain even with wage increases.

Property Development

While some of the developments have been paused during the pandemic, most are continuing, although some at a slower pace. Nevertheless, we do expect at least 2 new hotels to open in 2022. In the meantime, we have used this slow period to carry out maintenance works and improve on the infrastructure in Bintan. We are also further exploring new "development clusters" within our masterplan with themes such as logistics, aerospace, agri-tech, medical tourism and new economy. We believe there is real demand for these clusters in the medium term from both international and domestic investors, and that they will add significant value to our landbanks.

Resort Operations

Among our business segments, Resort Operations was most severely affected by the COVID-19 in 2020. International visitor arrivals to Bintan stopped after a strong January 2020, resulting in a drop in arrivals to 200,000 for 2020 versus 1.1 million in 2019. While we do not know how long this pandemic will continue, we have implemented best practices for checking and monitoring of arrivals, and we are working closely with both Indonesian and Singaporean governments to ensure a smooth and safe reopening of the borders. We have constructed our own COVID-19 testing facility with PCR as well as other latest testing technologies. In the meantime, domestic tourism has become more active, as it has in other large countries like the US and China. We are actively promoting Bintan as a new domestic destination and look forward to seeing results in the near future. Again, it is the growth of the Indonesian middle class that is driving domestic tourism.

Indonesia has made significant strides over the last 20 years to create a sustainable economic base for future growth – transitioning away from labor intensive low-grade manufacturing and natural resource exports to a more diversified economy. The democratic system seems robust, and the strong growth of the middle class and steps to improve social welfare seem to imply continuing stability.

Our company has mirrored this development, and while our company continues to be dependent on and driven by the macro economic trends in Indonesia and South-East Asia, we believe the strong developments in our industrial parks positions us to weather this pandemic. The continued development of the Indonesian economy bodes well for our automotive and resort segments. With the roll out of vaccines worldwide, perhaps we can imagine an end to this pandemic in the next 12-18 months. In addition, we see economic recovery in China, sustained increases in natural resource prices, and with the new government in the USA signaling a potential return to favorable global trade, we hope that we can see sustained increased economic activity in the near future.


Mr Lim Hock San Mr Eugene Cho Park
Non-Executive Chairman
Independent Director
Chief Executive Officer
Executive Director