Indonesia reports $850 mln in factory investments, says billions committed

Meiloon Industrial Co

30/06/2020 10:59

By Gayatri Suroyo
    JAKARTA, June 30 (Reuters) - Indonesia's investment board on
Tuesday said seven companies would soon relocate factories to
the Southeast Asian nation worth a combined $850 million, most
moving from China, with a potential for billions more from
another 17 interested firms.
    The announcement came in a presentation to President Joko
Widodo about an industrial park in Java, which hopes to
capitalise on the appetite to relocate manufacturing from China
to lower risks of supply chain disruption.  urn:newsml:reuters.com:*:nL4N2DH2LM
    Indonesia, however, faces stiff competition in the region
from preferred destinations like Thailand and Vietnam. 
    The investments include a $150 million factory in Banten for
tyre-maker Kenda Rubber Industrial  2106.TW  and $90 million
from audio systems maker Meiloon Industrial  2477.TW  to set up
in West Java, the board BKPM said. Both are Taiwanese. 
    Japanese vehicle parts maker Sagami  9900.T  will spend $50
million on a plant in North Sumatra and electronics giant
Panasonic  6752.T  will invest $30 million in Jakarta.
    U.S. solar lights maker Alpan would spend $14 million on a
factory in Central Java, BKPM said.
    Those projects were all being moved from China, according to
BKPM. It was not clear if all were new investments and a
spokeswoman for BKPM was not available.
    Others included a $378 million factory for South Korea's LG
 066570.KS  and $138 million from Japan's Denso  6902.T  for a
car part plant, both in West Java.
    Some of the firms' executives were featured in the video
expressing their commitments. Some local offices of the
companies could not be reached by Reuters, while others did not
immediately respond to requests for comment. 
    "Today there are seven who are definitely coming here.
Seventeen others have committed," Widodo said.
    "I order that they all be served well."
    Industry experts say a shakeup in global supply chains is
set to continue as a result of the coronavirus, with
manufacturers keen to reduce their dependence on China and
exposure to ongoing U.S.-China trade tensions.
    The 17 companies Widodo referred to represented a potential
investment of $37 billion combined, BKPM said.
    Among those was LG Chem  051910.KS  which is considering a
$9.8 billion investment in an electric vehicle battery factory
integrated with a smelter.

 (Additional reporting by Agustinus Beo Da Costa and Maikel
Jefriando; Editing by Martin Petty)
 ((gayatri.suroyo@thomsonreuters.com; +622129927609; Reuters
Messaging: gayatri.suroyo.thomsonreuters.com@reuters.net))