Ministry Of Industry Receives Apple Investment Proposal Of IDR 1.58 Trillion, Spokesperson: There Will Be Rapim Tomorrow

The Ministry of Industry (Kemenperin) has stated that it has received a proposal for Apple's investment plan of 100 million US dollars or around Rp. 1.58 trillion (exchange rate of Rp. 15,800 per US Dollar) in Indonesia for two years.

This amount is up 10 times from Apple's initial plan to invest 10 million US dollars or Rp158 billion to build an accessories and component factory in Bandung, West Java.

"The Ministry of Industry has received Apple's proposal dated November 18, 2024, regarding the investment of 100 million US dollars on November 19, 2024. Of course we appreciate Apple's intention in the proposal," said Ministry of Industry spokesman Febri Hendri Antoni Arif in a written statement received by VOI, Wednesday, November 20.

Febri emphasized that the Ministry of Industry immediately moved quickly and would hold a leadership meeting on Thursday morning, November 21, to discuss the proposal.

"This means that the Minister (Agus Gumiwang Kartasasmita) responded and welcomed Apple's investment commitment by immediately holding a rapid (leader meeting) tomorrow morning," he said.

However, the Ministry of Industry is still collecting Apple's promise to invest IDR 300 billion to comply with the Domestic Component Level (TKDN) regulations. This TKDN requirement is regulated in the Regulation of the Minister of Industry (Permenperin) Number 29 of 2017 concerning Provisions and Procedures for Calculating Domestic Component Values for Cellular Phone Products, Handheld Computers and Tablet Computers.

In Permenperin 29/2017, it is stated that the TKDN calculation can be carried out using three schemes, namely making domestic products or building factories, making domestic applications and/or developing innovations in the country.

Previously, Apple chose an innovation development scheme by building an Apple Academy. This iPhone manufacturer has built three Apple Academys, located in BSD Tangerang, Batam and Surabaya.

Minister of Industry (Menperin) Agus Gumiwang Kartasasmita also said that the iPhone 16 from Apple cannot be sold in Indonesia because it is still under the management of TKDN which is one of the requirements for importing cellular phones.

"So there is still a gap of around Rp. 240 billion. If they can realize this, Apple will get a TKDN value of 40 percent (and Apple can enter Indonesia)," he said.

In response to this, Febri said TKDN would create justice for all investors investing in Indonesia and to create added value and deepen the structure of the domestic industry. This is also justice with other countries, where Apple invests and sells its products.

"So, what is being questioned is apart from the figure or value of the investment, but related to justice for all investors in Indonesia and Indonesia and other countries. This will have an impact on creating a conducive business climate for Indonesia," he said.

Furthermore, said Febri, the Ministry of Industry noted that Apple's mobile phone sales in Indonesia were the largest in Southeast Asia or up to 2.61 million units in 2023. In comparison, Apple's mobile phone sales in Vietnam were only 1.43 million units.

"The value of Apple's sales revenue in Indonesia is estimated at IDR 30 trillion, this figure, right, is still far from the investment value planned to support national economic developments and the development of the digital technology ecosystem in Indonesia," explained Febri.

Therefore, the Ministry of Industry provides three conditions to the iPhone manufacturer, including requiring Apple to establish a research and development division (R&D) in Indonesia. The scale of the establishment of this R&D division will be much different from that of the Apple Academy. In addition, Apple must begin to seriously involve Indonesian companies into Apple's global supply chain (GVC).

"The Ministry of Industry also treats the same TKDN rules in Alphabet, Google's parent company, which owns Google Pixel 9. This device is prohibited from being traded in the domestic market because of minimal investment in companies," concluded Febri.