Workers are examining the condition of a car produced in Isuzu Astra Motor's plant in Karawang, West Java. (Antara Photo/M.Ali Khumaini)

South Korean Investors Eye $9.7b of Investments in Indonesia

MAY 08, 2015

Jakarta. South Korean investors expressed their commitment to invest $9.7 billion in Indonesia in such industries as petrochemical and electricity generation following a visit by Indonesia’s Investment Coordinating Board, or BKPM, to Korea.

BKPM chief Franky Sibarani said in a statement on Friday that he met with South Korean investors during his visit to Seoul on Thursday.

In the meeting, investors delivered investment commitments totaling $9.7 billion, of which Franky explained, derived from various investments such as $4 billion for the petrochemical industry in Banten, $2.8 billion for coal gasification in South Sumatra and $2.79 billion for North Kalimantan.

Additionally, the investors also planned to invest $70 million in the sweetener industry in East Java, $30 million for a power plant in East Java, $37 million for the cattle food industry in East Java and $20 million on the pharmaceutical industry in West Java.

“In the meeting, the investors looked interested to invest in Indonesia. BKPM will monitor, facilitate and make a follow-up so that these could be realized,” Franky said. BKPM did not elaborate the timeframe for the investments.

South Korea made up the fourth-largest foreign direct investment in Indonesia by source after Singapore, Japan and the US. From 2010 through March 2015 period, South Korea made $7.46 billion in investments in the country, according to the latest available data from the BKPM.

Franky promised that the BKPM would facilitate coordination between the central government and regional administrations in issuing permits for the Korean investors.

“It is to minimize the obstacles in the investments process,” he said.

BKPM launched a one-stop service in January to make it easier fot investors to acquire business permits from central governments, ministries and institutions. The agency plans to integrate the one-stop service for regional governments by the end of this year.

Azhar Lubis, deputy of investment control at BKPM, said South Korean companies were also interested in investment opportunities offered by President Joko Widodo’s administrations.

The new projects include a hydropower plant in Lampung with total capacity of 145 megawatts and a garment industry in Central Java that could hire up to 4,000 workers.

South Korean companies already invest in Indonesia. Posco, the biggest steelmaker in South Korea, has a joint venture with Krakatau Steel to produce steel slabs for manufacturing.