Indonesia reports US$850 mil in factory investments, says billions committed
By Reuters |   |  Others

JAKARTA: Indonesia's investment board BKPM on Tuesday said seven companies would soon relocate factories to the Southeast Asian nation worth a combined US$850 mil (RM3.64 bil), most moving from China, with a potential for billions more from another 17 interested firms.

The announcement came in a presentation to President Joko Widodo about an industrial park in Java, which hopes to capitalise on the appetite to relocate manufacturing from China to lower risks of supply chain disruption.

Indonesia, however, faces stiff competition in the region from preferred destinations like Thailand and Vietnam.

The investments include a US$150 mil factory in Banten for tyre-maker Kenda Rubber Industrial and US$90 mil from audio systems maker Meiloon Industrial to set up in West Java, BKPM said. Both are Taiwanese.

Japanese vehicle parts maker Sagami will spend US$50 mil on a plant in North Sumatra and electronics giant Panasonic will invest US$30 mil in Jakarta.

US solar lights maker Alpan would spend US$14 mil on a factory in Central Java, BKPM said.

Those projects were all being moved from China, according to BKPM. It was not clear if all were new investments and a spokeswoman for BKPM was not available.

Others included a US$378 mil factory for South Korea's LG and US$138 mil from Japan's Denso for a car part plant, both in West Java.

Some of the firms' executives were featured in the video expressing their commitments.

"Today there are seven who are definitely coming here. Seventeen others have committed," Widodo said.

"I order that they all be served well."

Industry experts say a shakeup in global supply chains is set to continue as a result of the coronavirus, with manufacturers keen to reduce their dependence on China and exposure to ongoing US-China trade tensions.

The 17 companies Widodo referred to represented a potential investment of US$37 bil combined, BKPM said.

Among those was LG Chem which is considering a US$9.8 bil investment in an electric vehicle battery factory integrated with a smelter. - June 30, 2020, Reuters

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