Apple's AirTag Factory Investment In Batam Is Only 200 Million US Dollars, The Ministry Of Industry Calls It Not In Accordance With The Proposal

JAKARTA - The Ministry of Industry (Kemenperin) revealed that the real value of Apple's AirTag factory investment in Batam is smaller than the proposed proposal. Apple Inc. plans to build a factory in Batam for AirTag production (iPhone accessories) with an investment value of 1 billion US dollars or around Rp. 16.2 trillion (assuming an exchange rate of Rp. 16,200 per US dollar).

The factory is estimated to be able to supply around 60 percent of the global AirTag needs and produce starting in 2026. In addition, this production facility is expected to absorb around 2,000 workers.

"Based on our technocratic assessment, the real value of Apple's AirTag factory investment in Batam is only 200 million US dollars. This value is certainly much smaller than the investment value of 1 billion US dollars in the proposal submitted by Apple to us," said Ministry of Industry spokesman Febri Hendri Antoni Arif as quoted from his written statement, Thursday, January 23.

Febri explained, based on the calculation of the Ministry of Industry's technocratics, the projected component of export value and the cost of purchasing raw materials cannot be included as investment capital expenditure (capex).

The investment value is measured only from capex, which consists of purchasing land, buildings and machinery/technology.

With the inclusion of export value projections and the purchase of raw materials in investment by Apple, Febri assessed that the giant technology company from the United States seemed to have increased the investment value to 1 billion US dollars. In fact, in real terms, according to a calculation of only 200 million US dollars.

"If the investment value of Apple is USD 1 billion, it is really for capex, such as the purchase of land, buildings and machinery/technology, of course even better. Imagine the amount of labor that can be absorbed with an investment rate of USD 1 billion, of course it will be very large," said Febri.

In negotiations on January 7, 2025, said Febri, Apple asked whether the projected export value and purchase of raw materials were included in the capex.

The Ministry of Industry's team at that time stated that the two variables were not part of the capex.

"Capex measurements use three variables, namely the purchase of land, buildings and machinery/production technology," said Febri.