Taiwan To Invest In Automotive Components' Materials In Indonesia

Jakarta (Antara Bali) - The Indonesian Investment Coordinating Board (BKPM) has identified an investment interest of a Taiwanese businessman who plans to produce materials for automotive components such as metal bars and wires.

The investor is ready to invest US$10 million to set up a new factory in Cikarang, West Java, considering the fact that several well-developed automotive factories are located there.

"There are already some automotive factories there. Hence, in future, we want to encourage the development of more number of supporting industries for automotive components such as the derivative products of metal industries," Head of BKPM Franky Sibarani noted in a written statement received by Antara on Monday.

Sibarani pointed out that the development of the automotive industry in the country has opened up a major opportunity for the automotive components industry to grow.

Metal bars and wires, for instance, are important raw materials that might be processed into finished products such as nuts and bolts, springs, ball joints, bicycle and motorcycle components, finger wheels, and baskets, as well as printing press components.

According to the BKPM head, the Taiwanese company, which for the first time will invest outside its country, views Indonesia as a huge potential market to develop its products.

The company's seriousness was also demonstrated by the presence of its two supplier companies, which had earlier invested in Indonesia.

"One of the suppliers has given a commitment to invest to build a smelter factory in Indonesia, followed by the other company, which is currently preparing their investment in the country," Franky explained.

The BKPM has been making consistent efforts to boost the flow of investment from Taiwan to support Indonesia's economy, especially in the steel industry, which can offer business opportunities for the derivative industries.

Head of the Investment Division of the Indonesian Economic Trade Office Taipei Mohammad Faizal remarked that the BKPM will offer some programs to the Taiwanese investors to simplify the investment process.

"Moreover, we expect those foreign companies to use our local steel products through the available incentives of free import duty exemption on raw materials for four years if their products have 30 percent domestic content," he explained.

The BKPM noted that the actual value of Taiwanese investment in Indonesia in 2015 had reached US$107.95 million comprising 275 projects and is ranked 15th among all investing countries.

According to data provided by the Financial Times in February 2016, Taiwan was ranked seventh, with its total investment in Indonesia reaching US$1.5 billion. (WDY)