Indonesia to Sign Manufacturing Partnerships with S. Korea
27 October 2017 17:00 WIB
TEMPO.CO, Jakarta - The Industry Ministry aims to strengthen Indonesia's three manufacturing sectors: steel, petrochemical and machinery through partnerships with South Korean investors.
"This effort is a run-up to the planned visit of South Korean President to Indonesia on November 8-10," Industry Minister Airlangga Hartarto said in a written statement on Thursday, October 26.
The ministry and South Korea's Trade, Industry and Energy Ministry have initiated steps to develop partnerships in all three potential industrial sectors.
"Our agreement will be set forth in a MoU that will be signed by both ministers during the state visit," Airlangga said.
Read: Indonesia Invites South Korean Investors
Airlangga said his ministry is aiming for South Korean investor Lotte Chemical Titan to actuate its investment plan of some US$3 billion – US$4 billion. Lotte Chemical plans to produce naphtha cracker with a total capacity of 2 million tons per year. Naphtha cracker is the raw material for making ethylene, propylene, and other derivative products.
This target is in line with the ministry's focus on developing the petrochemical industry as a priority sector, due to its vital role in supplying raw materials for downstream manufacturing industries like plastic, textile, paint, cosmetics, and pharmaceutical products.
Another strategic sector being pushed is the steel industry, in a bid to support the construction of a steel industry cluster in Cilegon, Banten, which is expected to produce 10 million tons by 2025.
Read: Indonesia Strengthens Bilateral Ties with South Korea
PT Krakatau Steel (KS) and South Korea's Posco are committed to support the cluster project. The two companies established Krakatau Posco factory in Cilegon, which currently produces 4.5 million tons.
According to the Investment Coordinating Board (BKPM), South Korea is Indonesia's third biggest investor that contributes 71 percent of the US$7.5 billion worth of investments in the last five years. South Korean factories have so far employed 90,000 workers.
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