TEMPO.CO, Jakarta - Indonesian Minister of Industry Agus Gumiwang Kartasasmita said that VinFast, a Vietnam-based multinational automotive company founded by Vingroup¸ will start construction of its factory in the country this year. The minister said that the construction phase will begin once the land becomes available.

"Immediately. Once the land is available, they will make their investment immediately. We are currently matching some industrial areas with them, there are several industrial areas as targets," Agus Gumiwang said as Antara reported on Tuesday, February 20.

The minister said that VinFast is committed to building an electric car factory in Indonesia. The Vietnamese manufacturer is currently looking for a location to build the factory. The government is preparing a number of industrial areas to consider, among them Batang in Central Java and Karawang in West Java.

"Nothing is fixed yet, but there are options," Agus Gumiwang said.

Previously, Agus Gumiwang said that the VinFast's factory in Indonesia would start running in 2026. Construction is expected to begin this year with an initial investment of US$200 million (Rp3.1 trillion).

"VinFast is identifying a suitable location to set up a factory in Indonesia. The size of land required is around 240 hectares," said Agus in his official statement as quoted by Tempo on Sunday, January 14.

Agus said VinFast's factory will produce around 50,000 vehicles per year and employ 1,000 to 3,000 people.

Once VinFast starts operating in the Indonesian market, the company will partner with domestic companies for the production process. Vinfast also plans to partner with transportation companies and technology service providers in order to expand electric taxis.

"VinFast is also interested in making electric buses, they even want to invest in IKN," Agus said.

Regarding VinFast's investment plans in Indonesia, Agus said that the government will provide a number of incentives, including those for the electric vehicle industry such as tax holidays, tax allowances, import duty incentives, as well as incentives for Sales Tax on Luxury Goods (PPnBM).

DICKY KURNIAWAN | ANTARA

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