Indonesia and China have agreed to invest in industrial zones outside Java. Companies from both countries last week signed agreements to invest in Morowali industrial area in South Sulawesi worth US$1.63 billion or Rp21 trillion.

 

That includes investment commitment through the signing of a memorandum of understanding between Tsingshan Group, Delong Group in PT Indonesia Morowali Industrial Park. They will build a carbon steel plant in Morowali with a production capacity of 3.5 million tons per year. The investment is valued at US$980 million.

 

The memoranda of understanding were signed Friday on the sidelines of the China-Indonesia Cooperation Forum: Belt and Road Initiative and Global Maritime Fulcrum held in Beijing.

 

Industry Minister Airlangga Hartanto said that the industrial cooperation between the two countries is expected to contribute to the enhancement of the national industry structure and competitiveness. “And capable of driving evenly-distributed development and welfare in Indonesia,” he said in an e-mail last week.

 

Airlangga said that the agreements were preceded by a bilateral meeting between Indonesian President Joko Widodo and China’s Xi Jinping at the Belt and Road Forum for International Cooperation in Beijing last month. “On the Belt and Road Initiative, we have pushed for improved cooperation with Chinese investors in Tanah Kuning industrial area in North Kalimantan, as well as other priority industrial areas, such as North Sumatra and North Sulawesi,” he said.

 

Industry Ministry official Harjanto said that Indonesian delegates met with China Communication Construction Company Ltd (CCCC). According to him, CCCC said Indonesia is a strategic partner in developing infrastructure projects, such as power plants, bridges and railways. “One of CCCC business unit, namely China Harbour, is keen on investing in Kuala Tanjung industrial area and cooperation in port sector,” he said.

 

Industry Ministry reports that China is Indonesia’s third largest foreign investors in manufacture sector with US$2 billion, spread across 594 projects. The investment value increased 839 percent compared to the same period in 2015. From 2014 to 2016, Chinese investments in manufacture sector were primarily made in metal, machinery and electronics, chemicals and pharmaceuticals and food sectors.

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