Posted on 13 Feb 2015
Japanese firms to spend $1.32b in Indonesia
Four Japanese firms will pour
US$1.32 billion into Indonesia over the next few years in various sectors, from
automotive to cattle breeding, the Investment Coordinating Board (BKPM) says.
The biggest portion — $600 million — will come from a Japanese automotive firm
seeking to build a manufacturing facility in Bekasi, West Java, according to
BKPM data.
Another firm will spend $260 million to build a surfactant factory in Dumai and
Riau in Riau province and Cilegon in Banten province.
The two other firms will develop a theme park in Greater Jakarta and a cattle
breeding facility in West Java with investments of $430 million and $25.8
million, respectively.
The firms had already consulted with the government about their planned
investments, but had yet to apply for investment permits, BKPM deputy chief for
investment promotion Himawan Hariyoga said on Thursday.
“We have to clarify and confirm [certain aspects] before they apply for
principle business permits,” Himawan said during a gathering of Japanese CEOs
at his office.
A committed investment can take several years to realize. After securing
principal business permits, investors must secure permanent business licenses
to begin their projects.
In the past five years, total Japanese investment approved by the board
amounted to $23.7 billion. However, only $12.1 billion out of the figure has
been realized, hampered by various obstacles, which the BKPM is now trying to
address through its “de-bottlenecking program”.
Japanese companies have always been among the top foreign spenders in Southeast
Asia’s largest economy. Nevertheless, investment tumbled by nearly half to $2.7
billion last year from $4.7 billion in 2013 as investors had exercised caution
on account of the general election and the political upheaval it could cause.
The proposed Japanese investment follows a string of investments that rushed
into Indonesia to tap into enormous potentials in the sizeable market of 250
million people after a peaceful election.
The BKPM recorded that at least 18 firms were already seriously committed to
injecting $18.7 billion into several sectors between last October and December,
soon after the new government took office.
Apart from the four firms with the serious commitment, another four Japanese
firms are also exploring the possibility of building a power plant in Sei
Mangkei, North Sumatra, a purified terephthalic acid factory at an undetermined
location, a fishery processing facility at an undetermined location and waste
management installation in Tangerang, Banten.
Japanese firms are not the only companies to recently express their commitment
to investing in Indonesia. On Wednesday, at least 16 South Korean companies
voiced their commitment to spending up to $17.1 billion in a variety of fields,
such as power generation, mineral processing, labor-intensive manufacturing and
import-substitution industry.
Indonesia will continue to serve as a favorite investment destination for
Japanese firms across Asia and Oceania in the future, according to Mitsutoshi
Okabe, the vice president of the Jakarta office of the Japan External Trade
Organization (JETRO).
The estimate is based on a survey carried out by JETRO from Oct. 10 until Nov.
14 last year, engaging 4,700 Japanese firms operating in the region.
Indonesia was ranked the fourth most-wanted investment hub for them after
Cambodia, India and Bangladesh.
Steady economic growth, a huge domestic market and rising incomes are factors
that have boosted the attractiveness of the country as an investment
destination, according to the survey.
Four
Japanese firms will pour US$1.32 billion into Indonesia over the next
few years in various sectors, from automotive to cattle breeding, the
Investment Coordinating Board (BKPM) says.
The biggest portion —
$600 million — will come from a Japanese automotive firm seeking to
build a manufacturing facility in Bekasi, West Java, according to BKPM
data.
Another firm will spend $260 million to build a surfactant
factory in Dumai and Riau in Riau province and Cilegon in Banten
province.
The two other firms will develop a theme park in
Greater Jakarta and a cattle breeding facility in West Java with
investments of $430 million and $25.8 million, respectively.
The
firms had already consulted with the government about their planned
investments, but had yet to apply for investment permits, BKPM deputy
chief for investment promotion Himawan Hariyoga said on Thursday.
“We
have to clarify and confirm [certain aspects] before they apply for
principle business permits,” Himawan said during a gathering of Japanese
CEOs at his office.
A committed investment can take several
years to realize. After securing principal business permits, investors
must secure permanent business licenses to begin their projects.
In
the past five years, total Japanese investment approved by the board
amounted to $23.7 billion. However, only $12.1 billion out of the figure
has been realized, hampered by various obstacles, which the BKPM is now
trying to address through its “de-bottlenecking program”.
Japanese
companies have always been among the top foreign spenders in Southeast
Asia’s largest economy. Nevertheless, investment tumbled by nearly half
to $2.7 billion last year from $4.7 billion in 2013 as investors had
exercised caution on account of the general election and the political
upheaval it could cause.
The proposed Japanese investment follows
a string of investments that rushed into Indonesia to tap into enormous
potentials in the sizeable market of 250 million people after a
peaceful election.
The BKPM recorded that at least 18 firms were
already seriously committed to injecting $18.7 billion into several
sectors between last October and December, soon after the new government
took office.
Apart from the four firms with the serious
commitment, another four Japanese firms are also exploring the
possibility of building a power plant in Sei Mangkei, North Sumatra, a
purified terephthalic acid factory at an undetermined location, a
fishery processing facility at an undetermined location and waste
management installation in Tangerang, Banten.
Japanese firms are
not the only companies to recently express their commitment to investing
in Indonesia. On Wednesday, at least 16 South Korean companies voiced
their commitment to spending up to $17.1 billion in a variety of fields,
such as power generation, mineral processing, labor-intensive
manufacturing and import-substitution industry.
Indonesia will
continue to serve as a favorite investment destination for Japanese
firms across Asia and Oceania in the future, according to Mitsutoshi
Okabe, the vice president of the Jakarta office of the Japan External
Trade Organization (JETRO).
The estimate is based on a survey
carried out by JETRO from Oct. 10 until Nov. 14 last year, engaging
4,700 Japanese firms operating in the region.
Indonesia was ranked the fourth most-wanted investment hub for them after Cambodia, India and Bangladesh.
Steady
economic growth, a huge domestic market and rising incomes are factors
that have boosted the attractiveness of the country as an investment
destination, according to the survey. - See more at:
http://www.thejakartapost.com/news/2015/02/13/japanese-firms-spend-132b-indonesia.html#sthash.xoyTySzZ.dpuf
