Minister Of Industry Agus Gumiwang Successfully 'Bring Home' Tens Of Trillion Investment Commitments From Japan

JAKARTA - During a two-day visit to Japan, Minister of Industry (Menperin) Agus Gumiwang Kartasasmita, accompanied by the Ambassador Extraordinary and Plenipotentiary (Ambassador LBBP) of the Republic of Indonesia, Heri Akhmadi, held several meetings with the automotive, petrochemical, and footwear industries. the employers' association, as well as the government of the Sakura country.

During the meeting, the Minister of Industry conveyed new policies, programs, and projects, including the Job Creation Law, import-substitution, relaxation of Sales Tax on Luxury Goods (PPnBM), the Bintuni project, and Patimban. From Japan, the Minister of Industry brought souvenirs in the form of strengthening old investment and new investment commitments in the automotive sector amounting to tens of trillions of rupiah.

"The meeting went well and brought good news because several large automotive and petrochemical companies expressed their commitment to invest in Indonesia", said Minister of Industry Agus in Tokyo, Japan, Thursday, March 11, before leaving for Indonesia.

The Minister of Industry said, from a meeting with the principals of Honda Motor Company Ltd, the company was committed to investing IDR 5.2 trillion. Meanwhile, Suzuki Motor Corporation plans to invest IDR 1.2 trillion. Meanwhile, Toyota Motor Corporation realized the existing investment, which is around IDR 28 trillion. Then, Mitsubishi Motors Corporation submitted an investment plan of IDR 11.2 trillion.

"Honda's investment includes the development of new vehicle models. Honda is also committed to expanding the export development of vehicle components produced in Indonesia as part of the global supply chain for nine countries, including Malaysia, Vietnam, Thailand, Pakistan, Saudi Arabia, and Japan itself", said the Minister of Industry.

According to the Minister of Industry, Honda will also move its existing production facilities in India to Indonesia, as well as commit to developing electric cars in the country. Then Honda will open export markets for new export destinations such as South Africa, Mexico, North America, and South America.

"They are developing a new model of motorized vehicle which will be produced in Indonesia and will be exported to 31 countries," he continued.

Suzuki's investment in Indonesia of IDR 1.2 trillion will be the basis for the development of Suzuki Ertiga and Suzuki XL7 products, which were introduced as mild hybrid vehicles with integrated starter generators (ISG) technology.

"These models are for export purposes for the Asian and Latin American markets", said Agus.

The company also has an EV roadmap and said that incentives from government policies are needed to increase EV production.

The Minister of Industry explained that the meeting with Toyota strengthened its investment commitment as the company with the largest investment since carrying out activities in Indonesia.

"Toyota remains committed to investing IDR 28 trillion. They are also committed to expanding the export market, from 80 countries that are now export markets to be developed into 100 countries by 2024", said Agus.

On the second day in Japan, the Minister of Industry also lobbied Mazda Motor Corporation to build a factory in Indonesia by conveying various investment conveniences and many incentives for new automotive investors in Indonesia.

"We continue to encourage them to immediately invest and build factories in Indonesia. They will immediately consider and calculate the investment needs in Indonesia. Hopefully later on our next visit in May we will hear about Mazda's developments in investing in Indonesia", said the Minister of Industry.

Meanwhile, Mitsubishi is committed to increasing investment by IDR 11.2 trillion by the end of 2025 with a projection of an increase in production capacity, from 220 thousand to 250 thousand units.

"They will also develop two models of electric vehicles (EV)", said the Minister of Industry.

In a meeting with principals in Japan, the Minister of Industry conveyed the facilities for increasing exports of motorized vehicle products from Indonesia. One of them is the development of Patimban Port in Subang, West Java which was launched early (soft launching) by the President of the Republic of Indonesia in December 2020. "Patimban Port is dedicated to being a major hub in the production of motorized vehicles in Indonesia as well as exports of automotive products to the global market", said Agus.

The Minister of Industry said that automotive industry players can use Patimban Port as a strategic partner in loading and unloading goods for export-import so that it can become one of the centers of international trade.

Investment Opportunities in Bintuni Bay

Apart from meeting with automotive principals, the Minister of Industry also held a meeting with the petrochemical industry company Sojitz Corporation to support the development of the methanol industry in Indonesia. This departs from the increasing demand for methanol because the methanol industry plays a very important role in the development of the downstream industry.

"They have an interest in participating in the methanol and ammonia project in the Bintuni Bay Industrial Area, West Papua", he explained.

The Bintuni Bay project itself will become the largest petrochemical-based industrial area with an area of around 2,000 hectares.

"Sojitz is very interested in investing there, and we will discuss this further on his next visit in May", he said.

Also, the Minister of Industry met with the Minister of Economy, Trade, and Industry (METI) of Japan, Kajiyama Hiroshi. At the meeting, the Minister of Industry and the Minister of METI discussed the diplomatic relations between the two countries, especially in the case of the New MIDEC cooperation program under the IJEPA bilateral cooperation framework. The Minister of METI appreciated the Job Creation Law and the PPnBM relaxation policy

"Apart from that, we also take this opportunity to ask the Japanese government to encourage Japanese companies so that they can see Indonesia as an excellent investment destination country", he explained.

The Minister of Industry also held a meeting with the Minister of State of Economic and Fiscal Policy, Nishimura Yasutoshi. The two of them were old friends before serving as ministers in their respective countries.

Minister Nishimura is responsible for several sectors, including handling COVID-19, economic revitalization, social security reform, and the Trans-Pacific Partnership (TPP).