Home News Indonesia, Hyundai Signs Investment Deal US$1.5B

Indonesia, Hyundai Signs Investment Deal US$1.5B

ndonesian government and Hyundai Motor Co., (HMC) signed an investment deal US$1.5 billion to build electric vehicle factory in Bekasi, West Java - Photo by President Office

JAKARTA (TheInsiderStories) – Indonesian government and Hyundai Motor Co., (HMC) signed an investment deal US$1.5 billion to build electric vehicle factory in Cikarang, Bekasi, West Java, said the official on Tuesday (11/27). The deal have been signed during President Joko Widodo visited to South Korea Nov. 24 – 26.

The signing was carried out by the head of Indonesian Investment Coordinating Board, Bahlil Lahadalia and the CEO of HMC, Won Hee Lee witnessed by President Widodo and the executive vice chairman of HMC, Chung Eui-sun, at the HMC factory in Busan.

“They will be build the factory in January 2020 in Cikarang,” said the the chairman in an official statement by adding the realization of the investment to be carried out in two stages, during 2019 – 2021 and 2022 – 2030.

In the first phase, HMC will investing on the car manufacturing plants and will export at least of 50 percent of the total production, he adds. In the second phase, the manufacturer will focus on developing an electric car factory, transmission plant, research and development, training center, and the production to be exported as much as 70 percent.

He continued, Hyundai will begin production in 2021 with a capacity up to 250,000 units per year, including electric cars. In the meeting, he also proposed the car maker to maximize the use of raw materials from Indonesia and cooperating with local entrepreneurs, like using battery materials from Morowali Industrial Park, tires and rubber from the country. 

At the same place, coordinating minister for maritime and investment affairs, Luhut Pandjaitan, said the government was serious about supporting the success of electric car investment in Indonesia. He asserted, the two sides want to develop and produce vehicle with new models to meet the needs of Asian and Australian consumers.

Beside visited Hyundai headquarter, during in Busan, the head of state hold a bilateral meetings with South Korea‘ President Moon Jae-in and with several CEOs. Beside, accompany president, Panjaitan also met Busan provincial governor Oh Keo-Don who requested that the country consider opening a direct flight to Busan from Indonesia.

“Every year there is an increase in the number of Indonesian tourists coming to South Korea. So we hope that this direct flight will facilitate economic relations between Busan and Indonesia,” said the governor.

Busan, which is a sister city of Surabaya, according to Governor Oh, has experience building smart cities. Therefore they also offered to share their experiences with Indonesia who were planning to build a new capital in East Kalimantan and the minister welcomed the offer.

Its also discussed the planned to expand the investment from Busan, mostly engaged in the shoe and textile industry. According to Governor Oh, the Busan entrepreneurs who invested in Indonesia wanted to have factory locations close to each other.

“We can help by providing land such as industrial estates, so that you can all get locations close together,” he said, promising to hold further talks with the South Korean Chamber of Commerce.

Korean companies in Indonesia run industries in various fields ranging from minerals, textiles, telecommunications, machinery, automotive, electronics and others.

by Linda Silaen, Email: linda.silaen@insiderstories