Japanese investor interest strengthens; Indonesian companies offering more services | Sector data
(The Insider Stories) – While Japanese companies have been a mainstay of foreign investment in Indonesia for decades, interest in manufacturing, consumer goods and other sectors is increasing alongside traditional natural resources investment even as Indonesian entrepreneurs are seeking to offer more services to attract Japanese capital.
Japanese investors are seeking to maintain their market share by raising investments in a country with a long history of friendly bilateral relations and a stable economy, Ehime Prefecture governor Tokihiro Nakamura said at a Business Matching Meeting. Improvements in governance and economic management have helped Indonesia’s economy become one of the most robust in the world in recent years following decades of stagnation.
Japanese entrepreneurs need to invest outside outside Japan in order to maintain market share, he told the forum that brought together 44 entrepreneurs from Ehime and 35 businesspeople from Indonesia to discuss cooperation opportunities in areas like agribusiness, automotive, construction, steel, oil and gas, pipes, transportation, water treatment, forestry and manufacturing.
Ehime Prefecture has a population of approximately 1.43 million people with GDP of JPY4.63 billion from an economy comprising 2.1% primary industry, 22.2% secondary industry and 75.7% tertiary industry. Realized Japanese investment in Indonesia was US$2.5 billion in 2012, Chatib Basri, chairman of the Investment Coordinating Body (BKPM), told the forum, saying he hopes Japanese investors will invest in basic industry.
A sluggish domestic economy and increasing competition from neighbours like China and South Korea in mainstay export markets like electronics and automobiles are among factors hampering the competitiveness of Japanese firms.
Bank Negara seeks to provide property, financial services
Bank Negara Indonesia (BNII) CEO Gatot Suwondo told the forum that the bank is seeking to provide more services to Japanese investors. It has signed an MOU with PT Suryacipta Swadaya to provide 1,400 hectares of land to Japanese investors seeking to set up businesses in Karawang regency in West Java, east of Jakarta.
BNI, which has cooperation agreements with the Japan Bank for International Cooperation and regional Japanese banks, has also set up a Japan Desk to help Japanese entrepreneurs obtain banking and other services.
To improve services to Japanese businesspeople in Indonesia, Japanese trading giant Toyota Tsusho Corp. (8015) recently announced it is leading a joint venture that includes PT Lippo Karawaci (LPKC), one of Indonesia’s biggest property companies, to develop a hotel-style residence in the Cikarang district, nearby Karawang, that will offer full Japanese-style residential facilities including communal baths, and Japanese-speaking concierge service.
