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CONTENTS PAGE Executive Summary 3 Introduction to Indonesia Profile of Indonesia and South Jakarta
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Project Partners Key Growth Drivers Lead Contractor PT Rayka
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Market Overview Telecommunication Industry
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Risk Profile Timeframe & Delay Exchange Risks Market Risks
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Structure and Exit Strategy Investment Details Investment Structure & Exit strategy
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Legality 24
Executive Summary
This document outlines the details of a premier investment opportunity in the proposed installation of Fiber Optic cables in Kota Wisata, West Java, Indonesia. § Opportunity to invest alongside CV Rayka Inti Synergi, pre-eminent Indonesian-based
contractor with over a decade of experience and exposure in fiber optic installation.
§ This project is a continuation to a series of projects by Rayka to install fiber optic cables in various regions of Indonesia.
Total Investment Required: USD 126,000 Profit Sharing Ratio: 36%
Projected Returns (ROI): 6%-8% Duration: 5 – 7 Months
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Executive Summary
Highest Potential Market in South East Asia
Project is well positioned to benefit and contribute to the economic transformation of South East Asia’s (SEA) largest emerging market, Indonesia
Strategic Entry into Indonesia’s growing Telecommunications industry
Opportunity to invest in Jakarta’s emerging telecommunications industry Lucrative prospects as there is still room for growth 51% increase in internet users in the country
Exceptional Local Partners with Strong Goodwill
Invest alongside CV Rayka Inti Synergi, a well established and experienced sub-contractor in Indonesia’s telecommunication industry.
Strong Alignment of Interest
While catering for a social need i.e. infrastructure development, investors are entitled to sustainable and high returns on their investments.
Key Investment Highlights
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Location
§ Being located in the tourism trail, Kota Wisata is surrounded by numerous tourism destinations, such as "Taman Buah" (Fruit Garden), Cibubur Camping, and several international class of golf courses.
§ 6km from Cibubur exit tollgate
The Project
§ Fulfil work orders from Indosat Ooredoo, (telecommunicaAon company) for digging and installaAon of Fiber OpAc cables
§ This industry is Aghtly regulated and controlled, with all prices for work done fixed by the government, at every level of the service chain.
§ This Aghtly regulated and controlled industry includes strict Amelines.
Executive Summary
INTRODUCTION TO INDONESIA
Source: IMF
Dominant ASEAN Presence § Association of South East Asian Nations (ASEAN)
is one of the fastest-growing regions in the world § Indonesia's population of 255 million people
represents 40.25% of ASEAN § Indonesia has achieved consistent growth of
above 4% every year for the past decade § Indonesia is projected to become the 5th Largest
Economy in the World by 2030 (World Economic Forum)
§ Indonesia has the largest Muslim population in the world
§ Indonesia requires massive investment for infrastructure development. Demand for infrastructure development is expected to increase over the years in line with population growth and the rapid expansion of the emerging middle class
§ Such need is also being orchestrated by the business community to ensure a more efficient business environment on the back of growing demand for their products and services.
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Source: tradingeconomics.com / World Bankindonesia-investments.com
Funds Allocated to Infrastructure Spending in the Government's Annual State Budgets
Indonesia Country Profile
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Source: Digital in 2017 by We are Social & Hootsuite
Indonesia: Internet Usage & Growth
In the next 3 years, 20 millions homes will have access to fiber optic internet, double the current number.
PROJECT PARTNERS
Reputable and Credible Project Partners
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PT Rayka Inti Synergi PT Rayka is an Indonesian contractor company run by Br Rama (Picture). Rayka’s latest project was at Green Central City, Jakarta, to install fiber optics cables for Telkomsel (the largest telco) through a work order from its main contractor, PT Bangun Bhumi Khatulistiwa. The company has successfully completed 18 fibre optic installation projects over a period of 3 years in different parts of Indonesia. Rayka’s clients include the leading telecos in Indonesia - PT Telkom, PT Indosat, and PT. MNC Kabel Mediacom. In 2015, the company posted revenue of IDR8.8bn (approximately USD660,000) and a strong net profit of IDR7.2bn (approx. USD540,000).
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PT Ethis Indo Asia (EIA) PT EIA is an associate company that takes up equity in SPVs. Its role is to secure projects in Indonesia and act as a financial controller to ensure the projects run smoothly and to safeguard the best interest of Ethis Investors. PT EIA also conducts initial screening & due diligence, progress monitoring and reporting. It also issues a Wa’ad (promise) Letter to Investors to fix the entry and exit currency rate and protect investors from any currency changes. PT Ethis Indo Asia is represented by Ronald Yousuf Wijaya (Picture), and is a minority shareholder and financial controller for PT Rayka.
Reputable and Credible Project Partners
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Reputable and Credible Project Partners
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Reputable and Credible Project Partners
MARKET OVERVIEW
Market Overview
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Indonesia requires a total of USD460 billion worth of investment in infrastructure The primary focus in infrastructure investment in telecommunications will be to equip Indonesia to be a broadband ready nation The installation of fiber optics is much needed, as 4G LTE wireless broadband technologies can only be satisfied with the use of these cables
Government Spending on Infrastructure (IDR trn)
Source: Ministry of Finance (MoF)
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The government is supporting this effort with the Palapa Ring PPP which is funding broadband infrastructure in three large regions
According to industry analysis, Indonesia’s IT and cloud services have the potential to grow rapidly in the coming few years, but fiber investment is critical to this.
Investment in Telecommunication Sector
Source: Oxford Economics
Market Overview
RISK PROFILE
Key Considerations
§ Time Frame and Delay PT Rayka has proven its ability to consistently complete projects on Ame in good weather.
However, rain may make the process slower by one to two weeks. The project is located in a
high end housing area. The policy of the area is that all the construcAon acAviAes are to be
done during the night for reasons of less traffic and congesAon. Due to this policy, the
company has added a buffer of 2 weeks to account for any unforeseen delays. PT Rayka has
thus forecasted a complete repayment period between 5 to 7 months.
§ Market Risks Unforeseen risks such as recession, poliAcal instability, and natural disaster may affect the
project. Indonesia has experienced socio-‐poliAcal stability for more than a decade.
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Key Considerations
§ Exchange Rate Investors will invest and obtain payouts in SGD, USD, EUR or other approved major
currencies. The Mudarabah agreement for this campaign however will be denominated
in Indonesian Rupiah (IDR) since it is the actual currency of the project. A^er investments
in the approved investment currencies are received, PT Ethis will convert them to IDR
using Ethis’s Fixed Exchange Rates.
PT Ethis Indo Asia (Third party) , through a Wa’ad (Promise) le`er, will absorb exchange
rate fluctuaAons. The exchange rate is fixed at the Ame of iniAal investment and
therefore any downward fluctuaAons of the Indonesian Rupiah will be compensated by
PT Ethis in order to give payouts at the same exchange rate that was set.
Investors will bear exchange charges and remi`ance fees when transferring their
investments. Remi`ance fees for payouts will be covered by PT Ethis Indo Asia. 19
STRUCTURE AND EXIT STRATEGY
Investment Structure
1. Joint Venture: PT Rayka (the contractor) is a joint-venture company with PT Ethis (Ethis local partner)
2. EthisCrowd investors will pool funds for PT Rayka to complete work orders for Fiber optic installation
3. Funds are disbursed to PT Rayka with receiving the work orders to installation fiber optics cables
4. Upon completion, payment is made to PT Rayka
5. Profits are realised after deducting costs
6. PT Rayka will then share 36% of the profits realized form the project with Ethis Crowd Investors, pro-rated to the investment amount
7. Investors receive their initial capital plus realised profits from the project 1 month after completion of the project
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Sale or Payment
Working order from PT. NEUTRAL ERA TRITAMA
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Investment Offer
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Description Details
Minimum Investment USD 600
Profit Sharing Ratio 36%
Projected ROI 6% - 8%
Duration 5-7 Months
Retail Crowd-Investors
§ First-time investors are given the flexibility to start investing with only USD200.
§ Investors investing more than USD 22,000 will be entitled to a Profit Sharing Ratio bonus of 6% (equivalent to an ROI of 7% - 9%).
Projected profits for investors will come from the completion of working orders by PT. NEUTRAL ERA TRITAMA
LEGALITY
Legality
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All contracts are based on Singapore law. Investors will sign a profit-sharing agreement directly with PT Rayka. PT Ethis has studied the commercial viability of this project in line with its internal screening standards. EthisCrowd investors are encouraged to conduct their own evaluation of this campaign. Risk Statement: In all real-world projects, there is always the risk of losing your capital. In our past crowdfunding projects, the main risk has been delays. Invest only what you can afford and consider diversifying to reduce risk.
