Photo by Ministry of Industry

JAKARTA (TheInsiderStories) – For boosting the cooperation in economy, Indonesia and China had signed an investment agreement for US$1.63 billion value, said Minister of Industry Airlangga Hartarto in a written statement. Indonesian government have actively encouraged China investors to invest in the country and support the development of industrial estate outside Java island.

The investment commitment are realized through the signing of memorandum of understanding between Tsingshan Group and Delong Group with PT Indonesia Morowali Industrial Park that are set to build a carbon steel factory in the industrial zone of Morowali, Central Sulawesi. The carbon steel factory will have an annual installed production capacity of 3.5 million tons which costs US$980 million.

Tsingshan Group also signed an agreement with Bintang Delapan Group and PT Indonesia Morowali Industrial Park, to build two power plants – each with a 350 MW capacity – which cost US$650 million. Together, these projects are expected to give a boost to infrastructure development in the eastern part of Indonesia.

The establishment of the carbon steel plant is important as it will reduce the need for imports of steel for the development of infrastructure projects in Indonesia, especially in the eastern part of the country. Currently, Indonesia only has steel plants in West Java and therefore it becomes costly to ship the materials to projects in the eastern part of Indonesia. Last year, Indonesia imported more than half of its steel consumption.

Airlangga noted that this cooperation is a follow-up of the bilateral meeting between President Joko Widodo and Preident Xi Jinping, for boosting the cooperation in economy, part of the Belt and Road Forum for International Cooperation in Beijing, China, held in May 2017.

The Industry Ministry have also boosted the investment cooperation with China in the industrial estate in Indonesia such as Tanah Kuning (North Kalimantan), and other priorities such as North Sumatera and North Sulawesi.

While an Indonesia delegates have discussed with China Communications Constructions Company Ltd. (CCCC) for participate in developing industrial estates outside Java island and attracts their business units for investing in manufacture sector in Indonesia.

The infrastructure projects are such as power plant, bridge, and railway. China Harbour, unit of CCCC, has specifically expressed its interest for developing industrial estate in Kuala Tanjung and port sector. China’s investment in manufacture in Indonesia reached US$2 billion with 594 projects, the 3rd biggest foreign country’s investment.

(Written by Linda Silaen, Email:


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