JAKARTA (TheInsiderStories) – South Korean construction firm, POSCO Engineering & Construction Co. said it has broken ground for two high rises building in a central business district in Jakarta. Unit of South Korea’s top steelmaker POSCO said on Friday (22/9) the buildings will be constructed at a cost of about US$300 million for completion in 2020.

Rajawali Corpora, one of the largest conglomerates in Indonesia, has placed the order to construct a 27-story hotel and a 55-story residence and office tower. The company said, after completing the construction project, it will seek to win an order to build a nearby sewage treatment facility and work in the coal-fired power plant and battery sectors.

Previously, the Investment Coordinating Board identifies the interest of South Korean companies to invest in property sector in Bali and Tangerang, Banten, in Posco EFI Forum 2016 activities in South Korea.

Head of the agency Thomas Lembong said South Korean investor plans to build shopping mall, retail mall, cinema and duty free shop in Bali as well as residential and retail project plan in Tangerang, Banten.

Lembong said direct foreign investment in hotels and resorts will encourage growth in the tourism sector — especially in the 10 priority tourist destinations that the government has set.

According to the office data, in the first half of 2017 South Korea ranked five in investment activities in Indonesia, with $478 million in total investment from 1,582projects. South Korean steelmaker POSCO will almost double its investment in Indonesia to $11 billion in the last five years.

Last year, Indonesia has signed nine major investment projects worth $18 billion with South Korean investors, during President Joko Widodo visit to Seoul. At that time, Indonesia signed up a $4-billion deal with Lotte Chemical for an integrated naphtha cracker project while it signed up $10-billion commitments with Korea Gas Corp. to develop gas infrastructure and LNG storage.

Other Korean firms that have committed investments in Indonesia include CJ Group, which is looking at investments of $2.1 billion in the creative industry. Daewoong Infion is looking at $100 million investment plans in the bio-pharma space.

Korea Midland Power Co., Ltd, Samtan Co. Ltd, PT Indika Energy Tbk (IDX: INDY) and Japan’s Marubeni Corp. consortium are looking at investing $1.27 billion in the third phase expansion in Cirebon power plant with capacity 660 MW.

Other projects include the consortium of KOMIPO, Posco Engineering and PT Putra Sulindo East for the 50 MW hydropower plant project in Southeast Sulewesi with an investment of $230 million. KOMIPO and Energi Mega Bali are investing $140 million for a waste to energy project in Bali.

KORBI Co., Ltd and PT Coffindo are investing $100 million in a solar energy project in North Sumatra while Parkland Co., Ltd will build a shoe factory in Jepara with additional investment value of $83.5 million.

POSCO, the world’s fourth-biggest steelmaker, already has a multi-billion dollar joint venture with Indonesian state-owned steel producer PT Krakatau Steel Tbk (IDX: KRAS), the country’s biggest steel producer.

New investment is key to achieving the country’s ambitious target of becoming a top 10 global economy by 2025 by selling more finished products rather than simply exporting raw materials.

 Writing by Linda Silaen, Email: linda.silaen@theinsiderstories.com