President Joko 'Jokowi' Widodo attends a virtual meeting with other Asean leaders from Bogor Palace in West Java on Tuesday. (Antara Photo/Press Bureau)

US Pharma Company to Relocate Plant to Central Java From China

BY :LEONARD A.L. CAHYOPUTRA

MAY 18, 2020

Jakarta. Indonesia is preparing a 4,000-hectare industrial complex in Brebes, Central Java, for a US pharmaceutical company relocating from China, after a discussion last month between President Joko "Jokowi" Widodo and US President Donald Trump. 

Sanny Iskandar, the chairman of the Industrial Estates Association (JKI), confirmed the news to Investor Daily at the weekend, saying that state-controlled Kawasan Industri Wijayakusuma industrial estate in Brebes would soon welcome the as-yet-unnamed company. 

"They have not decided how much they would invest in the new factory," Sanny said. 

The State-Owned Enterprises Ministry owns 51.09 percent of Kawasan Industri Wijayakusuma. Central Java owns 40.19 percent and the Cilacap district government owns 8.52 percent. 

"It's not going to be a quick process, but because this is government-owned land, it would be easier to manage," Sanny said. 

Sanny said the relocation project is still in the regional spatial planning stage. The next step will be a feasibility study. 

"This can take 6–12 months before [construction] starts. So I don't think the coronavirus pandemic will slow down the process," Sanny said.

Jokowi called Trump last month to discuss Indonesia-US cooperation in fighting the coronavirus pandemic and to strengthen trade and investment partnerships.

Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaitan had indicated the US company's intention to relocate its factory from China to Indonesia earlier this month.

"The president had asked me to speak to one of Trump's aides," Luhut said on May 10. 

Luhut said the project offers strategic values for Indonesia, which still imports the majority of its raw materials for drug manufacturing. 

China currently supplies around 60 percent of the raw materials and India supplies 30 percent. 

Shinta Kamdani, the deputy chairwoman of the Indonesian Chamber of Commerce and Industry (Kadin), said the US plant's relocation would allow local pharmaceutical companies to make use of its idle capacity.

Shinta said currently Indonesian drugmakers only operate at 55–60 percent capacity due to their heavy reliance on imported raw materials. 

 

 

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