Bank Mandiri Persero Tbk PT : Boosts Lending to Rubber Sector

Jakarta, 24 August 2014 - Bank Mandiri has boosted its lending to the rubber sector to support the development of the natural rubber industry in Indonesia. As of the end of June 2014, total lending by Bank Mandiri to the rubber plantation and rubber processing industries stood at Rp 7.3 trillion, up from Rp 6.9 trillion at the end of June last year.

Bank Mandiri Commercial & Business Banking Director Sunarso said that he believed the natural rubber industry would continue to grow in line with the expansion of the automotive sectors in the United States and Asia. In addition, the supply restrictions imposed by the three rubber producing countries of Thailand, Indonesia and Malaysia would help prop up prices.

"We are ready to work closely with domestic rubber producers based upon the reach of our IT and branch networks so that Indonesia's natural rubber industry can continue to grow and develop," Sunarso said. The value of Bank Mandiri's loans to the rubber industry accounted for almost 10% of total Bank Mandiri lending of Rp 88.6 trillion to the plantation sector as of the end of June 2014.

Natural rubber is an agricultural product that is used as a raw material by industry, particularly the automotive industry, as well as in the production of piping and medical equipment, among other things. In the automotive industry, is is expected that increasing global wealth will drive demand for both private and commercial vehicles. All this means that the demand for natural rubber is unlikely to fall.

Based on Indonesian Rubber Association or Gapkindo statistics, world natural rubber consumption stood at 11.3 million tons as per the end of 2013, and is expected to rise to 11.8 million tons in 2014, while Indonesia's natural rubber production is expected to increase to 3.205 million tons in 2014.

To maintain overall loan quality in the plantation sector, Sunarso said that Bank Mandiri always paid close attention to the technical, legal, financial, and management aspects.

He said that Bank Mandiri also continued to expand access to financing for smallholders to encourage the growth of the Indonesian natural rubber plantation industry. This was because as much as 85% of Indonesia's rubber production was derived from smallholders. Consequently, greater smallholder access to the banking industry and suitable loan schemes was essential.

"We believe that by providing access to finance for smallholders, Indonesia's natural rubber industry will be able to grow and develop in a much better direction in the future," Sunarso explained.

About PT Bank Mandiri (Persero) Tbk

Bank Mandiri is the largest Bank in Indonesia, providing services in the corporate, commercial, micro & retail, consumer finance and treasury, and financial institutions & special asset management segments. The Bank's subsidiaries are Mandiri Sekuritas (capital markets), Bank Syariah Mandiri (Shariah banking), AXA-Mandiri Financial Services (life insurance), Bank Sinar Harapan Bali (micro, small, and medium enterprise sector), Mandiri Tunas Finance (financing), Mandiri Axa General Insurance (general insurance) and Inhealth Indonesia (life and health insurance).

As of the end of June 2014, Bank Mandiri employed 34,442 staff, and operated 2,087 branches in Indonesia, and 7 branches/representative offices/subsidiaries overseas. The Bank has 11,604 ATMs (connected to the ATM Link, ATM Bersama, ATM Prima dan Visa/Plus networks), and 250,043 Electronic Data Capture machines, in addition to offering a range of other electronic channels, including Internet Banking, SMS Banking and call-center services.

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