Pegatron Corporation, an Apple’s iPhones manufacturer, is looking to start production in April this year after it confirmed the rental of a 2-hectare factory in Riau Islands in Batam. The Taipei-based company’s investment is estimated to reach up to USD 300 million, including an initial investment of USD 40 million. The news came after Pegatron released statement that it has chosen Batam-based PT Sat Nusapersada to assemble electronic products for export purposes.
Pegatron’s decision came just as the deadline to resolve dual leadership in Batam looms. Earlier, there was a lack of clarity on issuance of business licenses, as both the Batam Development Industrial Authority, which reports directly to the central government and the Batam administration had the authority to issue them. The government took a decision to merge the two bodies but it was not supported by the ruling party's coalition partners. Hence, the implementation has been postponed till after the election in April.
Furthermore, Batam is still waiting on the approval of the Special Economic Zones (SEZs) set forth to incentivize foreign companies to relocate to the island as a consequence of the United States – China trade war. The development of two special economic zones (SEZs) on Batam has been proposed, offering bigger tax incentives for businesses, while retaining its Free Trade Zone status.
(Source: The Jakarta Post)
Indonesia is in the midst of finalizing a new electric vehicle (EV) policy to build its position as a lithium battery hub in the region. The proposed plan offers tax incentives to EV battery producers and automakers and introduces preferential tariff agreements with other countries with high EV demand.
The country is encouraging companies and investors in Japan and Korea to choose Indonesia as their electric vehicle business destination at all levels. It has a target that 20% of cars produced in Indonesia should be electric vehicles by 2025.
Several companies have expressed interest in developing EV in Indonesia, including Chinese automaker Build Your Dreams Auto (BYD), Hyundai and Mitsubishi Motors. Volkswagen and Renault also have plan to develop local assembly plan, although EVs were not specifically mentioned.
The government’s plan is backed by the fact that Indonesia has plentiful reserves of nickel laterite ore, the main ingredient in the production of lithium-ion batteries. Indonesia is also building a USD 4 billion lithium battery plant on the island in Sulawesi, estimated to be completed within 16 months. The Morowali site has 20 nickel ore processing facilities that feed 1.5 million tonnes of nickel pig iron a year into a three-million tonne-per-year stainless steel mill.
Several vehicle manufacturers, such as Honda, Nissan, Toyota, Mercedes-Benz and BMW are setting up EV, hybrid and battery manufacturing facilities in neighbouring Thailand.
(Sources: ETEnergy world; Paultan; The Jakarta Post)
Pegatron Corp, a Taiwanese electronics manufacturer that assembles iPhones, is considering to set up a plant on Batam Island, Riau Islands. If confirmed, the investment is estimated to be worth USD 1 billion. It will also employ 8,000 to 10,000 workers in the rented factory.
Currently, Indonesia is competing against Vietnam and Thailand to secure the investment. Once Pegatron has made the decision, the company would need two quarters to move, install and certify equipment before the plant can be fully operational.
Batam was considered as a viable choice, considering the island's position in a free-trade zone in the Indonesia-Malaysia-Singapore Growth Triangle. It is also strategically located near Singapore.
This move has been prompted by the trade war between the US and China, and the fear of US tariffs on products manufactured in China. Other companies have also indicated that they might move away production from China include another iPhone assembler, Wistron, Apple Watch makers, Quanta Computer and Compal and AirPods maker, Inventec. In January 2019, Wistron authorized its subsidiary in India to spend USD 341 million to expand operations in the country, which include assembly of the iPhone SE and iPhone 6S for the local market.
(Sources: Apple Insider; AsiaNews; The Jakarta Post; Nikkei Asian Review)
De Heus Group, a Dutch feed manufacturer, has acquired Universal Agri Bisnisindo, an Indonesian poultry, fish and shrimp feed producer. Universal Agri Bisnisindo is a private feed company held by a consortium of multiple private shareholders. The company has total annual sales volume of 300,000 feed tons.
The move strengthens De Heus’ position in the animal feed sector in Asia. In 2009, it first entered the Southeast Asian market by acquiring a feed company in Vietnam and now has eight factories across the country. The company also has two feed mills in Myanmar and is currently building a feed mill in Cambodia.
De Heus expects Indonesia’s feed market to continue growing, reaching 22 million tons by 2022. Currently, 83% of Indonesia’s animal feed goes to the poultry industry, while the remaining 11% and 6% are for aquaculture and cattle and swine sector respectively.
Indonesia is the largest protein consumption market in Southeast Asia with a population of 260 million people. The attractiveness of the market draws positive investment from foreign companies. Cargill plans to open a freshwater aquaculture hub in Ciseeng, Parung-Bogor. Farmsco, a subsidiary of South Korean livestock and feed manufacturer, Harim Group, bought the feed and poultry-breeding units of Indonesia’ Sujaya Group. Neovia bought Indonesia’s layer feed producer, Welgro.
(Source: Feed Navigator)
Finland has invested USD 1.75 million in two projects for the paper and printing industry in Indonesia. The investment is in line with Indonesian Government Regulation No. 14 2015 on National Industrial Development Master Plan, whereby pulp and paper is one of the industries whose development is ranked highly. Besides pulp and paper, Indonesia and Finland are exploring partnership in the areas of manufacturing, specifically in agro-based industries and the development of a science and technology park.
Indonesia’s pulp industry is among the world’s top ten, while the country’s paper industry is at sixth place. In Asia, Indonesia is the third largest pulp industry and the fourth largest paper industry, after China, Japan and India. Both industries contribute an estimated of USD 5.8 billion to the nation’s foreign exchange revenue in 2017.
Indonesia manufacturing sector witnessed the fastest growth in more than two years. The Nikkei Indonesia Manufacturing Purchasing Managers’ Index (PMI) jumped to 51.9 in August 2018 from 50.5. The manufacturing sector was boosted by the increase in domestic demand, offsetting the decline in export orders. To meet the growth in demand in new domestic orders, the manufacturing sector recorded the strongest job growth rates in nearly 7.5 years.
Purchasing activity in the manufacturing sector grew modestly for the seventh consecutive month in August, while pre-production inventories lagged behind. Export orders remained weak for a ninth straight month. Input costs have also been rising sharply due to the downwards pressure on Indonesian Rupiah against the US dollar. The one-year outlook sentiment for production in Indonesia's manufacturing sector strengthened to a three-month high in August.
(Sources: Indonesia Investments; Financial Times)
Indonesia and Malaysia have signed an agreement to manufacture a local ASEAN car, in line with previous statements from Malaysian Prime Minister Mahathir Mohamad. The Indonesian Automotive Institute (IOI) and Malaysian Automotive Institute (MAI) will be in-charge of the development.
A Memorandum of Agreement (MoA) signed between IOI and MAI on August 10 focuses on the strategic and working relationship between MAI and IOI in the areas of human capital and supply chain development to enhance the capabilities of vendors, market expansion, and research collaboration for product technology, including hybrid, electric and next-generation vehicles, as well as process technology.
As the world's largest palm oil producers, the two countries will also explore the possibility of developing vehicles that use biodiesel as fuel.
There's strong demand for Indonesian-made spare parts and components in Malaysia's automotive industry. The Association of Indonesian Automotive Manufacturers (GIIAS) reveals that almost 1.5 million vehicle individual components were delivered to Malaysia in the first half of 2018. This shows heavy mutual reliance between two countries' automotive industries.
(Sources: The Star; Malaysia Automotive Institute)
Indian two-wheeler manufacturer, Bajaj Auto, announced in June 2018 the launch of its Austrian partner KTM’s bike assembly operations in Indonesia, which are due to start producing bikes later this year. The Pune-based motorcycle specialist launched KTM’s bikes in Indonesia in 2017 through the establishment of its 100% owned subsidiary, PT Bajaj Auto Indonesia. The positive reception of the launch has prompted the two companies to start exploring an assembly plant in the country to avail tax benefits and reduce costs.
The plan for PT Bajaj Auto Indonesia is to spearhead the development of the partnership between KTM and Bajaj and bring the jointly developed products into the Indonesian market. At present, Bajaj’s team is seeking clearances for starting a completely knocked down (CKD) operation in Indonesia. CKD configurations have been created and the process of seeking clearances for these configurations has started. The company plans to start full operations of CKD later this year once all approvals are received.
Bajaj first entered Indonesia in 2005 initially launching its Pulsar models with help from its then-partner Kawasaki. Despite years of efforts, Bajaj’s operations in the country remained at loss levels. During last year that the company decided to start afresh with KTM models. As a result, Bajaj Auto will manufacture KTM bikes in kits to Indonesia, where they will be put to the final assembly before being sold to local distributors. Bajaj currently makes KTM bikes at its Chakan plant in Maharashtra, India and exports them to several markets including the US and Europe.
(Sources: Rush Lane; Money Control)
The Ministry of Industry (Kemenperin) proposed in June 2018 an additional budget of RP 2.57 trillion (USD 183.9 million) for 2019 with the intention of utilising it for the implementation of the national agenda laid out in the Indonesia 4.0 roadmap. The proposed budget addition would add to the confirmed budget for 2019 of RP 2.73 trillion (USD 195.4 million), thus, raising the total budget to RP 5.3 trillion (USD 379.3 million).
According to the Ministry, the additional funds would be used, among other things, to implement the development of five priority industries under Making Indonesia 4.0; enhancement of the competences of industrial human resources through vocational training and Santripreneur activities; and the growth of new industrial entrepreneurs.
Under Indonesia’s flagship roadmap “Making Indonesia 4.0”, which was launched in April 2018, five priority manufacturing sectors are food & beverage industry, textile and clothing, automotive, electronics, and chemicals. If successful, the roadmap would provide an estimated 1-2% boost to the real economy of Indonesia. Hence, in the period of 2018-2030, Indonesia’s GDP growth rates should be at least 6-7% per year. Meanwhile, the manufacturing industry is targeted to contribute between 21-26% to the nation’s GDP by 2030.
(Sources: Industry.co.id; Indonesia Investments)
Mitsubishi Motors has started exporting its XPANDER small MPV from its manufacturing facilities in Bekasi, Indonesia, one year after the plant was inaugurated. The export launch was attended by President Joko Widodo of Indonesia and Minister of Industry Airlangga Hartarto, along with Mitsubishi Motors chief executive Osamu Masuko.
The Philippines will be the first export market for the vehicle in ASEAN. This will be followed by Thailand, Vietnam and additional international markets in the coming months, with around 30,000 MPVs expected to be exported during the first year.
A press release from Mitsubish states that this is the first time that Mitsubishi Motors will export vehicles on a mass scale from Indonesia and cites the support of both the Indonesian government and manufacturing joint venture partners Mitsubishi Corporation (MC) and PT Krama Yudha (KY).
The XPANDER currently comprises 50% of production capacity at Mitsubishi Motors' Bekasi plant, which has 3,000 employees and has a production capacity of 160,000 units per year.
(Sources: Mitsubishi Motors, Automotive Logistics)
The Industry Ministry is set to publish a roadmap to prepare for the so-called Industry 4.0, also dubbed as the fourth industrial revolution. The new roadmap is expected to detail the key steps Indonesia needs to take for the country to integrate automation and data exchange in manufacturing technologies. Titled “Making Indonesia 4.0”, the roadmap focuses on five manufacturing industries, namely, food & beverages, textiles, automotive, electronics and chemicals. According to officials, the government is working on fiscal incentive packages, especially tax deduction for Research & Development (R&D) and research industries as well as tax holidays.
Industry associations said that some industries had already begun to implement Industry 4.0 elements in their internal operations although the government is yet to begin the program. For example, a number of garment factories had begun to use automation in some of their activities to reduce the dependency on manual labour. Automation and the Internet of Things (IoT) had been widely applied by major global automotive companies, however, local automotive industry players would need to ramp up their efforts. According to the Indonesian Food & Beverage Producers Association, major food producers are currently the most prepared companies to ride the Industry 4.0 wave in the country.
(Sources: Jakarta Post)
Prym Intimates, a leading manufacturer of lingerie accessories, has opened a new manufacturing facility in Semarang, Indonesia. The company, a subsidiary of William Prym & Holdings, commenced construction of the facility in November 2016, and completed in December 2017.
It joins existing operations in Sri Lanka and China. The new facility will produce hook & eyes, bra-wires, ring/slides, straps and bows with capacity to dye and finish fabrics and fittings, and provide a complete accessory solution to its Intimate apparel customers. The company will support the domestic market initially, and is also considering opportunities in neighbouring countries of South East Asia.
MAS Holdings, the joint venture partner of of narrow fabrics specialist Stretchline Holdings, also has two manufacturing units dedicated to intimate apparel and will be purchasing all its accessory requirements from Prym Intimates Indonesia.
(Sources: Fiber2Fashion; Just Style)
Asia Pacific Rayon, an affiliate of pulp and paper giant Asia Pacific Resources International Holding, expects to complete construction of Indonesia's largest integrated rayon facility in August, with its output expected to support the country's textile industry. APR is investing up to USD 1.13 billion in the development of the factory, designed to have an annual production capacity of 350,000 tons of viscose staple fiber, which is used in the textile industry. The factory's total production will be from 100% renewable sources derived from existing plantations that have been legally certified nationally and internationally, and can be used in the production of various goods, including bedding, clothing, towels, wet wipes for babies, masks and many other personal hygiene products.
APR is part of Sukanto Tanoto's Royal Golden Eagle Group. Its affiliate APRIL controls one of the largest pulp and paper producers in Asia through Riau Andalan Pulp and Paper (RAPP), which produces 2.8 million tons of pulp and 1.15 million tons of paper annually. It exports its paper to more than 75 countries. RAPP will supply APR's new factory with the pulp used in the production of viscose staple fiber.
(Sources: Nip Impressions)
U.S.-based supplier of packaging products Crown Holdings, through its unit Crown Asia Pacific, has opened its new beverage can manufacturing plant in Jakarta, Indonesia. Located just outside of Jakarta in the city of Karawang, the plant is in close proximity to soft drink, juice and other beverage manufacturers concentrated in the Indonesian capital. The single-line facility will produce standard 330ml two-piece aluminum beverage cans and a range of specialty sizes and will have an initial annual capacity of 650 million cans. It has been designed to be able to accommodate a second can line with similar capacity and a beverage end production line, allowing Crown to continue to scale up production when market demand calls for it.
The new plant will create over 100 jobs in its first year, with more than 90% of its workforce coming from the local community. According to Crown Holdings, there is great potential for the beverage can in Indonesia due to the country's strong economic growth and sizable population. The company also plans to support local, regional and international customers from this new location.
(Sources: Crown; Asia Food Journal)
South Korea's Lotte Group, through its chemical unit Lotte Advanced Materials, has acquired Indonesian acrylonitrile butadiene styrene (ABS) producers PT Arbe Styrindo and PT ABS Industri Indonesia, both of which have ceased operations due to financial hurdles. PT Arbe Styrindo and PT ABS Industri Indonesia are the only producers of ABS in the country.
In 2016, Indonesia imported more than 100,000 tons of ABS resin. ABS resin demand is projected to grow as it is used in the household and automotive industries. Indonesia manufactured around 903,000 vehicles in the first nine months of 2017
Lotte will focus on revamping and normalizing both factories as well as expanding their capacity to 73,000 tons/year from 2019 with expected revenue of USD 185 million. This investment marks Lotte’s latest plan on securing a prominent position in the Indonesian market. The group has invested in various sectors in the country including retail, processed food, construction and petrochemical sectors. Furthermore, the company is planning on establishing a USD 4 billion naphtha cracker plant in 2019 that will produce 2 million tons of olefin, ethylene and propylene. The plant is expected to be completed in the next four years.
(Sources: Jakarta Globe; Plastic Today; Yonhap News)
The Indonesian manufacturing sector, which is the biggest contributor to economic growth in the country, has seen a decline in the past three years. Its contribution to GDP has fallen from 1.01% in 2014 to 0.94% in 2015, and 0.92 in 2016. However, Indonesian's Ministry of Industry now expects growth in the country's manufacturing industry, on the back of strong growth in the food and beverage, transportation, machinery and equipment, chemicals and pharmaceuticals, electronics and basic metal industries.
The Indonesian government will provide the manufacturing industry three tax incentives in an effort to boost the industry. It involves a 200% tax allowance for those investors who want to invest in vocation programs to improve training and skills for their workers. Secondly, a 300% tax incentive (from the value of the investment) will be offered to those who invest in innovative products. Thirdly, those who invest in labor-intensive industries that focus on exports can also expect to obtain a tax incentive, with the exact amount depending on the number of workers employed in the company.
Infrastructure development in the country is expected to boost the manufacturing sector. New harbors, toll roads, airports as well as industrial zones and power plants are being built, which will go some way to alleviating the economy's considerable supply-side bottlenecks, reduce logistics cost and improve the investment climate.
(Sources: Indonesia Investments; The Jakarta Post)
Kohler Co, the American manufacturing company that is best known for the manufacturing of plumbing products, furniture, cabinetry, and tiles, is busy expanding its business in Indonesia by developing a new factory on a two-hectare plot of land in the Greenland International Industrial Center (GIIC) in Bekasi (West Java).
Kohler, which has been present in Indonesia for the past 35 years, works closely with a network of distributors. According to the company, the market potential of the country is huge and it is a dynamic and fast-expanding environment. Moreover, the company intends to use Indonesia as a base to access other markets in South East Asia in the future. The new Kohler factory will, therefore, focus on manufacturing sanitary and kitchen products for export purposes.
Currently, Kohler owns 50 factories in various countries around the globe (ten of which are located in China). It took two years of study and negotiations before Kohler decided to build a new factory in Indonesia. The first stone of its new factory in Bekasi is expected to be laid on 28 November 2017. It is estimated that the new factory can provide employment opportunities to at least 1,000 Indonesian workers.
(Sources: Kohler; Indonesia Investments)
Swiss multinational ABB has inaugurated a new manufacturing facility for high-voltage switchgear in Tangerang, on the out-skirts of Indonesia’s capital, Jakarta. This is part of ABB’s continued footprint expansion in the country including the establishment of a new factory for medium-voltage products in 2015 at the same location. The 1,300 square-meter plant will manufacture a range of high-voltage switchgear and equipment such as Live Tank Circuit Breakers and Disconnectors. The new factory will deploy lean pro-duction concepts and is equipped with state of the art production and testing equipment to ensure preci-sion assembly and testing to meet the highest quality standards.
ABB has supported the development of Indonesia’s power infrastructure for the past four decades and its installations include a range of electrical and automation solutions for industries such as oil and gas, pulp and paper and aluminum. It offers a comprehensive range of high-voltage products up to 1200 kilovolts Alternating Current (AC) and 1100 kilovolts Direct Current (DC) that help enhance the safety, reliability and efficiency of power grids while minimizing environmental impact.
Indonesia is the world’s fourth most-populous country and one of the fastest growing economies in Asia. Its annual GDP growth rate averaged around 5.3% from 2000 until 2017. This has spurred the need for electricity, and, according to PLN, the country’s leading power utility, demand is projected to grow at around 8.5% per annum between 2015 and 2025.
Sinar Mas Cepsa has inaugurated its first oleochemicals plant in Indonesia, which represents an investment of EUR 300 million made over 2 years. The plant will produce fatty alcohols from sustainably-sourced palm kernel oil, a key ingredient in the manufacture of everyday products such as household cleaning goods and personal care products. Sinar Mas Cepsa is a wholly-owned joint venture (JV) between Cepsa, a leading integrated energy company and world leader in the production of linear alkylbenzene (LAB) used to make biodegradable detergents and Golden Agri-Resources (GAR), part of the Indonesian consortium of Sinar Mas businesses and the world’s second largest vertically-integrated palm oil company.
The Dumai plant has an annual production capacity of 160,000 metric tonnes of fatty alcohol per year. Sales of vegetable-based alcohols, rather than conventional petroleum derivatives, increasingly in demand as a raw material for personal care products and liquid detergents, will primarily focus on markets in Asia. The plant will also service demand from Sinar Mas Cepsa’s surfactant plant in Germany, which serves markets in Eastern and Western Europe.
(Source: Sinar Mas Cepsa)
Agency for the Assessment and Application of Technology (BPPT), the research & development agency of Indonesia has presented a solution towards the worsening issue of salt scarcity in the country. BPPT head Unngul Priyanto presented the technology to Indonesian Vice President Jusuf Kalla earlier this month.
The technology, which will "shake up seawater to increase its salt levels before it flows into reservoirs where drying facilities are located", is set to be tested in Kupang and Madura.
Indonesia has experienced salt scarcity since July due to the hot spell, causing the country to import tons of salt from Australia. The imports were scheduled to arrive at three Indonesian ports, namely Tanjung Perak Port in Surabaya, Belawan Port in Sumatra, and Ciwandan Port in Banten. Local officials are also already considering building salt production facilities if the country decides to limit the importation of salt from other countries.
(Sources: Republika; IBT)
Tsingshan Holding Group is among three companies that have expressed their interest to build a ferronickel complex in Tanah Kuning Industrial Park, North Kalimantan. The investment is worth USD 28 billion to construct ferronickel smelter with a capacity of 1.5 million tonnes each year. The investment will also be used to construct other facilities to produce 2 million tons of stainless steel, 10 millions tons of carbon steel, 500 000 tons of ferro-manganese, 200 000 tons of ferrosilicon and 1 million tons of aluminum.
Other companies who will build their sites are Indonesian state-owned company PT. Inalum and a Chinese aluminum company PT. Borneo Alumindo Prima. Additionally, the three companies expressed their intention to build 9,000 MW hydro power plants near Kayan River. Separately, Tsinghan stated that its company will also develop a 7,200 MW hydro power plants to supply electricity to its complex.
(Sources: Asian Metal; The Jakarta Post)
Global automotive parts supplier Nexteer Automotive opens a new manufacturing plant in Bekasi, West Java in Indonesia. As a wholly-owned subsidiary of Nexteer, the Indonesia plant will mainly manufacture brush column-assist electric power steering (CEPS) and began to ramp up operations in July.
The plant will provide electric power steering (EPS) product and service for the Indonesian subsidiary of SAIC-GM-Wuling Automobile (SGMW), facilitating its overseas business development strategy as a long-term partner.
(Sources: Nexteer Automotive, Asia One)
Indonesia’s exports of motorcycles increased by 27.4% to 155,034 units from 121,442 units. Of the five Indonesian cruiser producers that ship their products abroad, just Kawasaki Motor Indonesia recorded a decrease in exports over the January-May 2017 period. The others - Yamaha Indonesia Motor Manufacturing, Astra Honda Motor, Suzuki Indomobil Sales, and TVS Motor Company Indonesia – all enjoyed good performance.
In terms of the local market, motorbikes remain hugely popular in Indonesia, and their sales are a key indicator of consumption. According to Yamaha Motor Surveys in 2016, the domestic demand for motorcycles is 5.6 million units. Although scooters and models with underbone frames account for the majority of demand, sports models - such as Yamaha Motor’s YZF-R25 and YZF-R15 - have been gaining popularity. The trend is especially strong among younger riders stepping up to higher grades, which is helping to drive the market.
It is interesting to also note that while the motorcycle will remain an important form of transportation in the country, more and more Indonesians are finding themselves in car dealerships, thanks in part to the introduction of a new low-cost green car, which have a low price-tag.
(Source: Indonesia Investment, Motorsports Newswire, ExxonMobile)
New York-based Minerals Technologies Inc. has announced its plans to build a 125,000 metric-ton per year satellite precipitated calcium carbonate (PCC) plant at PT Indah Kiat Pulp & Paper's mill in Perawang, Indonesia. PT Indah Kiat Pulp & Paper is a subsidiary of Asia Pulp & Paper.
As part of the agreement, Minerals Technologies will also expand its present satellite PCC facility at the Perawang mill by 40,000 metric tons to 140,000 metric tons. The facility will be operated by PT Sinar Mas Specialty Minerals, an existing joint venture with APP in Indonesia. These facilities are scheduled to begin operation in the second quarter of 2018.
Mitsubishi Motors Corp. has opened an assembly plant in Indonesia this month, which is capable of producing 160,000 vehicles a year, as it strives to almost double its share in Indonesian’s car market to 10% within three years. Some of the vehicles produced at the factory on the outskirts of Jakarta may eventually also be supplied to Nissan Motor Co., as the two automakers move to realize savings through synergy made possible through a capital alliance forged last year.
In Indonesia, Mitsubishi Motors sold around 65,000 vehicles in fiscal 2016, and expects to grow that to 90,000 vehicles this year. The firm, which currently holds a 6% share of the Indonesian passenger car market, aims to increase that to 8% this year, and to 10% in 2019.
(Source: Japan Times)
According to Indonesia Investment Coordinating Board (BKPM) a Japanese musical instrument manufacturer will build its factory plant in an industrial park in Bekasi, West Java. Its investment has reached US$ 43.4 million, thus, received previlege licensing services, the three hours investment licensing services and direct construction investment incentive (KLIK) from BKPM. In addition, the factory is set to hire 1.6 thousand workers.
Further, BKPM Deputy for Investment Promotion, Himawan Hariyoga, stated that almost 99% of the musical instrument factory’s products will be exported and the rest will be sold in domestic market. The construction project will be started in May 2017 and expected to complete in 2018.
(Sources: BKPM, Antaranews)
The Industry Ministry has proposed to the Ministry of Finance an income tax cut for investors willing to spend a minimum of IDR 50 billion (USD 3.7 million) and employ at least 25 workers to produce raw material for medicines. This is due to the fact that the number of investments in the pharmaceutical sector has not seen significant grown in recent years, reaching just USD 669.8 million from January 2011 to September 2016. This plan is more likely targeted for foreign investors to build production facilities in Indonesia, be it in an industrial area or outside of industrial area.
The Indonesian government has formulated various plans to attract investment in pharmaceutical sectors in recent years. In example, in 2016, the government has opened up entire pharmaceutical sector to foreign investors. Thus far this move did not result in a significant increase in investment. The government hopes that with this plan, more foreign investors will engage in the sector.
(Source: The Jakarta Post)
Indonesia is keen to establish the retread tire industry in the country. For now the needs of aircraft tires in Indonesia for Boeing and Airbus alone is estimated to reach about 40,000 units per year, while for Cessna it is estimated to reach a total of 20,000 units per year. Retread tires utilize 80-90% natural rubber, while the rest is synthetic rubber materials and other additives. If the retread tire industry can be established in Indonesia, it will be absorb approximately 1,759 tons of natural rubber per year.
To achieve its ambitions, Indonesia’s Agency for Assessment and Application of Technology (BPPT) has signed cooperation agreements with two local manufacturers PT Rubberman Tire Aviation and PT Ciharas Avia Trade, to produce prototypes of industrial scale tire retreads in order to obtain certification for application in the aviation industry in Indonesia. The former will produce tires for large aircrafts while the latter will produce tires for small aircraft.
BPPT has teamed up with Garuda Maintenance Facility AeroAsia (GMF) to carry out this plan. In the future, GMF will act as a buyer of the tires and to obtain the tires certification from Airbus and BoeingBPPT is also eyeing local carriers Lion Air, Susi Air, and others as prospective customers.
(Sources: BPPT, Tribunnews)
A local train car manufacturer has performed well in 2016, in line with the Indonesian government's focus on infrastructure development. PT INKA, a state-owned enterprise, has booked a revenue of about USD 135.22 million last year thanks to the growing demand for train cars. Currently, there are various railways development projects that are ongoing in Indonesia, and one of them is the railway line from the International Airport Soekarno-Hatta to Jakarta.
PT INKA received the order to manufacture train cars for the airport railway project, with the Ministry of Finance providing the company with USD 74.82 million for factory expansion and procurement of new machines. Besides the train car for airport railway, PT INKA is also manufacturing about 485 train cars for PT KAI, a state-owned railway operator, to replace older train cars, as well as exporting train cars to neighboring countries, including Bangladesh and Sri Lanka.
(Source: The Jakarta Post)
The Indonesian government has been planning for a regulation to scrap the import duty for luxury car parts. The regulation is aimed for incompletely knocked down (IKD) vehicle parts, which currently are subject to 7.5% tariff. With this new regulation the Ministry of Industry hopes that the productivity of local car manufacturers will be increased and more foreign car manufacturers will invest in Indonesia.
To take advantage of this new regulation, BMW Indonesia will localize its assembly parts factory in Sunter, North Jakarta, particularly for the BMW 7 series. Currently, BMW Indonesia has localized an assembly factory for various series, including the 3, 5, X1 and X3 Series. With the BMW 7 series' plant to be localized, the company is confident that the production costs will be reduced and the assembly time will be faster, thus delivery time will be cut down significantly. In alignment with the localization, BMW 7 series’ price will be reduced and the company hopes that more customers will be able to afford the car.
(Source: The Jakarta Post)