A model poses with Suzuki Karimun Wagon R in a exhibition in 2014. (Antara Photo/Andika Wahyu)

Japanese-Indonesian Battery Venture May Spark Flurry of New Investment


FEBRUARY 02, 2015

Jakarta. Furukawa Indomobil, a joint venture between Japanese electric and electronics equipment company Furukawa and Indonesia’s automotive manufacturer Indomobil, will launch a vehicles battery plant worth $39 million on Thursday in Bukit Indah, Cikampek, West Java, on the back of rising demand, a top official said Monday.

Furukawa Indomobil investment reflects growing interest from Japanese companies in investing in Indonesia, as they seek to tap the country’s growing middle class.

“The needs for car and motorcycle batteries in Indonesia keeps rising — that’s why they are building a factory,” Panggah Susanto, acting director general of high technology-based industry at the Industry Ministry, told reporters.

The plant will have a production capacity of three million batteries using 80 percent locally produced raw materials.

The production is mostly for domestic use, Panggah added. Indonesia Car Manufacturers Association estimated Indonesians will buy 1.2 million cars this year.

The Japan Chamber of Commerce and Industry visited Vice President Jusuf Kalla on Monday. The delegation, led by JCCI chairman Akio Mimura, said they eyed Indonesia as an investment destination.

“I directly chose Indonesia as the first destination to send our economic delegates because Indonesia has a big potential of more than 250 million people and the rising

growth of middle class, with income per capita reaching $3,500,” Mimura said after the meeting at the Vice Presidential’s Office.

Mimura said Indonesia also promised to be a production base for Japanese companies.

He did not give further details on the potential cooperation with Indonesia, but said the JCCI, with 1.25 million members, could offer a wide range of cooperation.

Kalla also welcomed investments from Japan, saying that increased cooperation with Japan’s lower-middle enterprises this year could decrease Indonesia’s import values.

“Domestic enterprises won’t die, but they will have their qualities improved because generally Japanese businesses have more advanced technology than us,” he said.

Based on data from Indonesia’s Investment Coordinating Board (BKPM), Japan ranked as the second foreign country with most investment in Indonesia in 2014. With $2.7 billion worth of investment last year, Japan came behind Singapore, which invested $5.8 billion.