COOPERATION IN INDUSTRY, MINERALS AND ENERGY (COIME)

1. The 33rd Meeting of the ASEAN Committee on Industry, Minerals and Energy (COIME) was held in Kuala Lumpur on 23-25 May 1990.

2. The Meeting was held as part of the regular review by COIME of the various cooperative programmes being implemented by ASEAN in the field of industry, minerals and energy.

3. The Meeting was held against the back-drop of two ASEAN Economic Ministers' (AEM) decisions: that the approval process for proposed AIJV projects has been slow and that the Basic Agreement on ASEAN Industrial Joint Venture (BAAIJV) be reviewed in order to expedite this approval process; and that Senior Economic Officials take a bold and innovative approach in addressing the issues facing the region.

4. During the Meeting, preliminary discussions were held on the provisions of the BAAIJV which could be improved. COIME also approved proposals to extend the deadline for the 60% non-ASEAN equity participation in AIJV beyond 1990. Some views were also exchanged on measures that were needed to be taken to encourage investment through industrial preferential schemes.

   ASEAN Industrial Projects (AIPs)

5. On the ASEAN Industrial Projects (AIPs), the Meeting noted the following progress:

   a) ASEAN Urea Project (Indonesia)

6. Total production of urea during the first three months of 1990 reached a total of 163,245 MT or 28.64% of the design capacity.

7. Sale registered a volume of 153,232 MT at the average selling price of US$105/MT (compared to the average selling price during 1989 of US$ 109/MT).

8. Urea production was sold to the following countries:

   		  Off take in 1989	Off take in 1990
   					   Jan - March
   
   Indonesia	 120,874 MT (19.7%)	24,563 MT (16.0%)
   Malaysia	 119,468 MT (19.5%)	39,566 MT (25.8%)
   Philippines	 145,000 MT (23.7%)	10,872 MT ( 7.1%)
   Thailand	  83,784 MT (13.7%)	41,956 MT (27.4%)
   Singapore	   1,092 MT ( 0.2%)		-
   
   Total ASEAN	 470,218 MT (76.8%)	116,957 MT (76.3%)
   Non ASEAN	 141,322 MT (23.2%)	 36,275 MT (23.7%)
   
   Total		 611,540 MT (100%)	153,232 MT (100%)
   

9. The projected volume of production and sale up to December 1990 of urea is at 627,000 MT and 15,000 MT of Ammonia, and the urea selling price is projected at the average price of US$ 110/MT FOB Bulk and the Ammonia price at US$ 85/MT FOB.

   b) ASEAN Urea Project (Malaysia)

10. During the period under review, production volume of urea was 530,371 MT and that of Ammonia at 338,590 MT. This represents an increase of 3.8% for urea and 2.0% for ammonia from the previous year's production of 511,139 MT and 332,037 MT respectively. The increase in production output was due to higher plant capacity factor at 105% and 109.7% for ammonia and urea respectively.

11. During the period under review, sale volume of urea and ammonia was 550,326 MT and 34,443 MT respectively, representing an increase of 8.9% and 38.6% as compared against the previous year's sale volume of 505,290 and 24,852 MT. Mean- while, the average price of granular urea obtained by ABF was US$ 127.5 per MT, compared to US$ 137.5 per MT recorded in the previous year. The price obtained during the year was generally higher than that of average world urea price of US$106.90 per MT. Similarly, the price of ammonia recorded was marginally higher than that of the average world ammonia price averaging US$ 130.20 per MT compared to US$ 124.70 per MT in the previous year.

12. On the whole, ASEAN countries became major importers of the company's product, with 56.1 % of the urea made during the period sold to these countries and this represents an increase of 1.7% as compared against that of the same period of the previous year. Australia on the other hand continued to become the company's major importer of granular urea outside the ASEAN countries.

13. The company has also continued to sell surplus ammonia in small lot shipments, at competitive prices, to several companies in Malaysia, Thailand and the Philippines.
    Breakdown of Urea Sale by Country
    (12 months period from April 1989 to March 1990)

    
    ASEAN		   MT	 	   %
    
    Malaysia	 72,486		 13.2
    Thailand	236,103		 42.9
    
    Sub-Total	308,590		 56.1
    
    Non-ASEAN	   MT		   %
    
    Australia	167,004		 30.3
    Japan		 l3,597		  2.5
    China		 21,363		  3.9
    United Kingdom	 17,659		  3.2
    France		 21,914		  4.0
    S. Korea	    200		  0.05
    
    Sub-total	241,737		 43.95
    
    T o t a l	550,320		100.05
    

    c) ASEAN Copper Fabrication Project (Philippines)

14. The possibility of starting the project is now being examined following the signing of a Protocol of Understanding between the Philippines and Japan in October 1989. The Board of Directors of the Project had been appraised of the proposal to invite Japanese investment in the project.

    d) ASEAN Industrial Project for Singapore

15. Following its withdrawal of the approved AIP, Singapore is in the process of identifying a substitute AIP.

    e) ASEAN Potash Mining Project (Thailand)

16. The 21st Meeting of the ASEAN Economic Ministers (AEM) held in Bandar Seri Begawan on 30 November - 1 December 1989 had approved Thailand's proposed ASEAN Potash Mining Project to replace the Rock Salt-Soda-Ash Project as its new AIP.

17. The 33rd COIME Meeting agreed that member countries are satisfied with the viability of the project and that the project could commence. The Meeting also agreed that Brunei Darussalam should already be considered as a participant to the ASEAN Potash Project although it is not yet a signatory to the Basic Agreement on the AIP.

18. The First Meeting of Shareholders of the Project was held on 9-10 July 1990 in Bangkok where all the six ASEAN member countries agreed to become the shareholders.

    ASEAN Industrial Joint Venture (AIJV)

19. The 33rd Meeting of COIME reviewed the progress of approved AIJVs and, noting the very little progress was being made on the implementation of Constant Velocity Joints and Various Automotive Lamps, agreed to withdraw these products from the Final List of AIJV products without prejudice to their being proposed for AIJV listing in the future.

20. On the Tentative List, Phenol and Nylon Tire Cord still await participation from another ASEAN country.

21. On the Pre-Approved List, the ASEAN Economic Ministers have agreed to the inclusion of the following products in the List:

    a) X-ray including radiotherapy apparatus;
    b) Unwrought zinc;
    c) Pressure gauges, thermostats, level gauges and the like;
    d) Parts and accessories for measuring, checking instruments;
    e) Tyre Cord Fabrics of Continuous Synthetic Textile Materials;
    f) Complete digital central processing machines; and
    g) Unwrought aluminum.
    
    Brand-to-Brand Complementation (BBC) under the ASEAN Industrial Complementation (AIC)

22. The 33rd COIME Meeting approved the BBC Scheme for Nissan Motor Co. Ltd. between Malaysia and Thailand on the Model Nissan Sentra/ Sunny (B11). The Meeting also approved the Nissan BBC Scheme on the Model Nissan Sentra/Sunny (Bl3) among Malaysia, the Philippines and Thailand, subject to the replacement of those parts removed from the proposed schedule on exports from the Philippines to Malaysia.

23. Additional BBC Schemes proposed by Mitsubishi Motor Corporation (MMC), Mercedes Benz and Volvo are awaiting additional information from the proponents.

    Cooperation in Minerals

24. There has not been substantial progress in the implementation of the 14 approved projects under the ASEAN Minerals Cooperation Plan.

25. In view of this, the Experts Group Meeting on Minerals will meet in Bandung in October 1990 with the following terms of reference:
    a) To review the status of the approved projects taking into account the financial and physical commitments of the participating countries to the project.

    b) To consider the new project proposals and prioritize the same according to the criteria adopted by the 32nd COIME Meeting for the selection of projects to be endorsed.

    c) To look into bold and innovative approaches to ASEAN minerals cooperation.

    ASEAN Industrial Standardization Program

26. The 33rd COIME Meeting noted the interest expressed by the Working Group on Industrial Cooperation (WGIC) of the ASEAN-CCI on the ASEAN Industrial Standardization Programme and agreed that the private sector should actively participate in the Programme. In this connection, the Meeting requested Thailand, as Programme Coordinator, to inform the WGIC of the progress of the Programme and to request WGIC to invite ISQAP representatives to attend their Meetings.

27. The 33rd COIME Meeting approved the full participation of Brunei Darussalam and Singapore in the programme and requested the two countries to officially inform Thailand of their respective focal points.

    Energy Cooperation

28. The 8th Meeting of the ASEAN Economic Ministers on Energy Cooperation was convened in Kuala Lumpur on 22-23 June 1989.

29. This Meeting approved new Terms of Reference which will guide the future activities of the ASEAN Experts Group on Coal (AEGC) and the Action Plan on the Commercial Application of New and Renewable Sources of Energy (NRSE) Technologies.

30. At the 7th Meeting of the ASEAN Experts Group on Coal (AEGC) held in Kuala Lumpur from 17-19 May 1990, the following Action Plan to implement its terms of reference were agreed to :
    a) The strengthening and sharing of existing facilities in the coal sector in the ASEAN countries with other ASEAN countries. For this purpose, the AEGC shall identify the relevant institutions in the respective member countries which can serve as centres of excellence for the training of personnel and the conduct of research on coal utilization and development.

    b) Addressing environmental problems and the restrictions they place on the development and utilization of coal. This would also involve reviewing the technologies for alleviating these problems and the exchange of experiences among member countries with these technologies.

    c) The coordination of research and development efforts on the utilization, treatment and handling of low grade coal for domestic use and small/medium-scale industries.

    d) The promotion of closer cooperation between the private sector and AEGC. For this purpose, a meeting with the private sector will be arranged following the Second Intra- ASEAN Coal Workshop to be held in Kuching, Malaysia in September 1990 as a first step toward this direction.

31. The Action Plan on the Commercial Application of New and Renewable Source of Energy (NRSE) Technologies is focused on the following NRSE Technologies:

    a) Small Photovoltaic Systems
    b) Rice Husk Energy Conversion Systems
    c) Wood and Charcoal Gasifier for Electricity
    d) Solar Water Heaters
    
    

32. On the Electricity, the following is the progress of cooperation undertaken under the auspices of the Forum of Heads of ASEAN Power Utilities:
    - On Micro/Mini-Hydro Development, the emphasis was on the need to reduce the cost per kW. A figure in the range of US$600 to US$800 per kW was to be attained for sizes of up to 50kW.

    - On Computer Applications, two workshops were proposed and approved, one in Indonesia and the other in Malaysia. There was also agreement that interested Utilities be kept informed by other Utilities on the development of large computer projects.

    - On Interconnections, it was agreed that the Cooperation Project should cover Operation and Control and that another Cooperation Project to cover this is unnecessary. It was further agreed that technical assistance be sought to carry out further studies on Interconnection Projects as one of the ways to expedite their implementation.

    - On Research, Development and Engineering, there is a need to address current issues on reducing cost of supply, improving efficiency, supply reliability, quality of service and environmental issues.

    - On Training and Development, the new Terms of Reference on Training and Development was adopted. On the attitudinal change in the context of LLN privatisation exercise, the Meeting took note of the offer from the Philip- pines to share the result of Performance Contract between NPC management and Plant Operating staff in the Philippines.

    - On Geothermal Power Development, the Meeting endorsed the proposal to establish an ASEAN Geothermal Research Centre in the Philippines and the continued elaborations of the geothermal steam pricing model.

    - On Rural and Urban Electrification (RUE), the Meeting noted that urban electrification was becoming more complex and welcomed the participation of Singapore in the ASEAN-RUE project.

    - On Standardisation, the Meeting agreed that there should be ASEAN standards for the remaining items under this project. In the manufacture of common electrical power equipment, trading among ASEAN countries should be encouraged to exploit the economies of scale in a bigger market.

    - On Electric Power Information Centre, the Meeting agreed that the success of "Information Centre" at Bang Pakong power station to educate the public could be emulated by other utilities. The Meeting noted the progress of ASEAN EPIC statistics 1987 which covered data up to 1988, and statistics for 1989 is under compilation.