REPUBLIKA.CO.ID, JAKARTA -- South Korea considered that strengthening cooperation with Indonesia at this time is important. One of the focuses is the development of industries both large, small and medium scale.
"President Moon said about it because South Korea has already been working with Russia, Japan and China. They are making a policy to synergize with ASEAN including Indonesia," said Minister of Industry Airlangga Hartarto in a statement in Jakarta on Thursday.
The statement was made by Airlangga after attending the Indonesia-Korea CEO Roundtable in Jakarta on Thursday.
In the discussion forum hosted by the Indonesian Chamber of Commerce and Industry (KADIN), witnessed by South Korean President Moon Jae-in, industry players from both countries expressed interest to increase mutual cooperation.
"President Moon gives his appreciation. Potential industrial sectors include steel, petrochemical, animal feed, textiles, and footwear," Airlangga said.
From this meeting, Minister of Industry also stated that there is big hope for local businessmen to get their business partners from South Korea.
"Some Korean businessmen mentioned their good experiences that have been investing in Indonesia. They see, with the potential of young Indonesians, they want to be partners of the economic development of Indonesia," he added.
Airlangga said he should continue to encourage the realization of investment from South Korean industry players who have commitment to invest their capital in Indonesia.
For example, Lotte Chemical Titan will invest 3.5 billion US dollars in Cilegon, Banten to produce naphtha cracker with a total capacity of two million tons per year. The chemical raw material is required to produce ethylene, propylene and other derivative products.
On the same day, Airlangga met with Lotte Group Chairman Dong Bin Shin along with his staff.
"We agree to accelerate this project. Initially, construction is targeted to begin at the end of 2018. There are several technical issues that need to be supported, such as port development, infrastructure, and provision of tax holiday facilities," he said.
Currently, the Ministry of Industry is focusing the petrochemical industry as one of the priority sectors of its development in the country as it plays an important role as a raw material supplier for many downstream manufactures such as plastic, textile, paint, cosmetics and pharmaceutical industries.
Moreover, the Ministry of Industry has proposed that petrochemical industry should be included as sectors that need to get the gas price cut because as it is the largest gas user sector in the production process.
"With competitive gas prices, the competitiveness of the national petrochemical industry will increase," said Airlangga.
Also read: S Korea seeks to improve economic relations with Indonesia
Meanwhile, in the steel industry sector, entrepreneurs of both countries will partner with Japan to build a cold rolling mill or cold rolled steel factory.
"Thus, the partnership is between Krakatau Posco and Nippon Steel, due to its end users are under Japan for the automotive sector. The 2019 target has already begun," Airlangga said.
PT Krakatau Posco, a joint venture between PT Krakatau Steel Tbk and South Korea's largest steelmaker Posco is also accelerating the construction of a 10 million-ton cluster of steel projects in Cilegon. This production capacity is targeted to be achieved by 2025.
In addition, Krakatau Posco has built a blast furnace. The plant is on 55 hectares of land in Cilegon, and will produce 1.2 million tons of melting steel.
The company is also realizing the construction of a second hot sheet steel plant with a capacity of 1.5 million tons per year.
The Minister Airlangga said steel industry is a strategic sector because it is the parent of other industries.
Moreover, the government is actively building infrastructure such as roads, ports, properties, energy, to telecommunications that all require steel.
Based on the Capital Investment Coordinating Board (BKPM) records, South Korea is the third largest investor in Indonesia.
In the manufacturing sector, South Korean companies contribute up to 71 percent of the total investment of 7.5 billion dollars over the past five years.
In fact, the factories are able to absorb 900 thousand workers.
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