Manufacturers' confidence grows, but cost pressure remains: PMI reports 

Though costs remain a concern, Indonesian manufacturers have increased buying activity and bolstered stockpiles of input and output inventories in anticipation of demand growth this year 

Domestic manufacturers have expanded business activity heading into 2025, bolstering input and output inventories, and remain confident about the outlook this year, even as cost pressure remains high amid an overall increase in raw materials prices.  

S&P Global’s latest Indonesia Manufacturing Purchasing Managers’ Index (PMI), published on Monday, signals further expansion with a reading solidly above the crucial 50-point mark separating expansion from contraction.  

The January 2025 PMI survey for Indonesia showed the activity indicator had risen to 51.9 points from 51.2 points in December 2024, marking the highest level since May last year.  

Meanwhile, production had risen for three straight months with a higher volume of new orders, according to the S&P Global report. 

Market demand improved from both the national and global sides, with manufacturers reporting a second successive increase in monthly export orders. They also bolstered their finished goods inventories for a seventh consecutive month, in anticipation of higher sales in the coming months. 

The same expectation also encouraged accumulation of inputs and higher purchasing activity among manufacturers at the start of this year.  

Firms generally anticipate output growth in the coming 12 months on an expectation that steady market demand and a stable economy would underpin sales and production in the months ahead. 

Paul Smith, economics director at S&P Global Market Intelligence, noted that Indonesia’s manufacturing sector had expanded at “a quicker pace during January”, supported by a sharper gain in output and an expected increase in production.  

“Reflective of ongoing confidence in the outlook, with production expected to rise on the back of improved market demand over the coming year, firms took on additional staff to the strongest degree for two and a half years,” Smith said on Monday in a statement accompanying the manufacturing PMI report.  

“Increased demand for inputs added to some upward pressure to input prices, although inflation remains comfortably below its trend level. However, firms remained wary of passing on their higher costs to clients, with the latest data showing only a limited increase in output charges over the month," he noted.

Manufacturers expanded their workforce for a second month running in January, but S&P Global said this proved insufficient to prevent another modest increase in backlogs of work.  

The Business Confidence Index (IKI) report from the Industry Ministry meanwhile indicates a manufacturing rebound to 53.10 in January after five consecutive months of contraction. 

"The IKI in January increased 0.17 point from December 2024 and 0.75 point compared to January last year,” Industry Ministry spokesperson Febri Hendri Antoni Arif said in a press release on Jan. 31. 

According to the report, the expansion was driven by 20 subsectors that contributed 95.5 percent of gross domestic product (GDP) in the non-oil and gas industry in the third quarter of 2024.  

This was supported by growth in new orders, with the corresponding indicator showing 2.03 points higher than 52.74 points in December. The ministry noted the increase was in line with increasing new orders for companies in preparation for anticipated growing demand this year.  

In contrast, production declined 2.14 points month-on-month but remained in expansion territory at 53.39 points in January, “due to an increase in stockpiles from the previous month’s rise in production to anticipate the [value-added tax] rate hike to 12 percent”, according to the ministry. 

The government walked back the planned 12 percent VAT hike at the last minute to just luxury goods and services. 

Source: The Jakarta Post 

Indonesia says France's Eramet exploring new mining areas in South Sulawesi, Papua 

Indonesia's investment minister said on Tuesday French miner Eramet is exploring new mining areas in the South Sulawesi and Papua regions. 

Rosan Roeslani on his Instagram account said he met with Eramet's Group CEO, Christel Bories, on Monday and he was updated on Eramet's investment plans. 

"Eramet outlined its investment plans, including exploration of new areas in South Sulawesi and Papua as well as the development of the Responsible Green Electric Vehicle project involving various strategic partners," Rosan said. 

Eramet could not immediately be reached for comment. 

Eramet's main operation in Indonesia is its Weda Bay Nickel mine, located in Halmahera, North Maluku. 

Source: Reuters 

Grab Eyes USD 7 Billion Acquisition of GoTo, Sources Say 

Singapore's Grab Holdings Ltd. is reportedly considering acquiring Indonesian tech giant GoTo Gojek Tokopedia in a deal valued at over USD 7 billion, Bloomberg reported on Tuesday, citing unnamed sources. 

One scenario under discussion involves Grab purchasing GOTO shares at IDR 100 per share, representing a 13.6 percent premium over GOTO’s current trading price of IDR88, according to an analysis by Stockbit Sekuritas. 

GoTo representatives declined to comment on the report, while Grab has yet to issue a statement. 

The Bloomberg report follows a recent DealStreetAsia article revealing that Grab and GoTo are expediting merger talks, with a potential agreement targeted for 2025, Stockbit Sekuritas noted in a Tuesday briefing. 

The merger, if successful, would mark a significant shift in the Southeast Asian ride-hailing and e-commerce landscape. Both companies have reportedly been exploring consolidation for several years, seeking to reduce operational costs and ease competitive pressures in key markets. 

"These talks have been ongoing but have faced challenges, including disagreements between parties and potential hurdles from anti-monopoly regulations," Stockbit noted. 

Sources familiar with the matter cautioned that discussions might not result in a transaction, underscoring the uncertainties surrounding the deal. 

Shares of GOTO are expected to react strongly to the renewed speculation, as the proposed premium could draw investor interest. The merger could also realign the competitive dynamics in Southeast Asia, a region where both companies have been battling for dominance across mobility, food delivery, and e-commerce sectors. 

A successful acquisition would position Grab as a leading super app in the region, combining its strengths in mobility and food delivery with GoTo’s foothold in Indonesia’s e-commerce and digital payments markets. 

Source: The Jakarta Globe