Industry minister, Agus Gumiwang Kartasasmita, has confirmed at least three Japanese companies will relocate their factories from China to Indonesia - Photo by Industry Ministry Office

JAKARTA (TheInsiderStories) – Industry minister, Agus Gumiwang Kartasasmita, has confirmed at least three Japanese companies will relocate their factories from China to Indonesia. The company are Panasonic Corp., with an investment of US$30 million, Denso Corp. with costs $138 million, and Sagami Rubber Industries Co. Ltd., with an investment of $50 million.

The three companies are among the seven multinational companies planning to move their facilities from China to Indonesia with total investment is estimating around $118 million. Earlier, Toyota Group has expressed an interest in injecting 2 billion USD into Indonesia and is committed to supporting the government’ efforts to reduce carbon emissions by producing hybrid and electric cars.

As reported, last year, the government prepared Brebes Industrial Park and other industrial zones to relocates Japan and United States plant from China to Indonesia, as an effort to boost the development of Central Java and spur national economic growth.

The areas is targeted to be a core industry for the textile products, the leather and footwear industry, the food and beverage industry, the furniture industry, also the pharmaceutical and medical device industry.  State-owned enterprises, PT Wijayakusuma Industrial Estate has assigned as the developer and manager of the areas.

Brebes industrial zones covers three sub-districts, namely Bulakamba, Tanjung, and Losari in Central Java. Kartasasmita reiterated that Japan was one of the strategic partner countries to Indonesia, which was evident in the increasing bilateral trade cooperation in the non-oil and gas sector in 2014 – 2019. Japanese investment in Indonesia recorded $2.58 billion in 2020.

In this year, the government to add 19 industrial zones in nine areas such as Sei Mangkei and Kuala Tanjung in North Sumatra, Galang Batang and Bintan Aerospace Industry in Riau, Kemingking in Jambi, Tanjung Enim South Sumatra, Pesawaran and Way Pisang in Lampung, also Sadai in Bangka Belitung. Then, Ketapang in West Kalimantan, Surya Borneo in Central Kalimantan, Buluminung in East Kalimantan, Tanah Kuning in North Kalimantan, also Batulicin and Jorong in South Kalimantan.

The rest are Bangkalan in Madura, Weda Bay in North Maluku, Palu in Central Sulawesi, and Teluk Bintuni in West Papua Barat. The minister said the industry areas development is focused on agro industry, oil and gas, metal and coal, also high technology industry and aerospace. The industry area planning has been through examination from various aspects.

While, areas in Java will be focused on high technology, labor-intensive and industry with water low consumption and outside Java tend to be natural resources industry, logistic efficiency system industry, and center of new economic development. To date, there are 103 areas that have operated with 55,000 ha total areas. The areas are located in Java of 58 areas, Sumatra of 33 areas and other areas.

Besides, there are 15 industry areas under construction and 10 areas in the planning stage. The activity in industrial areas has generated a multiplier effect on the national economy, ranging from the added value increasing, local human resources absorbing, and foreign exchange earnings.

Based on Japan External Trade Organization (JETRO) survey, around 65.1 Japanese companies in Indonesia estimate will experience operating profit in this year. The biggest reason for the expansion of Japanese companies in Indonesia, among others, is the increase in sales in the domestic market and the potential for expansion of the export market.

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