Government Probes Reports of Japanese Companies Leaving Indonesia
JAKARTA, KOMPAS — The government is investigating reports that two Japanese automotive component companies are leaving Indonesia. The reports, initially disclosed by Said Iqbal, Special Adviser to the President on Employment and Worker Welfare, also claimed the two companies would relocate their factories to Vietnam.
Minister of Industry Agus Gumiwang Kartasasmita on Sunday (21/6/2026) ordered the Director General of Metal, Machinery, Transportation Equipment, and Electronics Industry (ILMATE) to verify the truth of the information regarding the relocation of production by PT SAI and PT JAI, as well as any layoffs at the two companies.
According to the government, the production facilities of PT JAI and PT SAI are still operating normally in Indonesia and continue to carry out production activities as usual. There is no plan to relocate the production facilities of the two industrial companies from Indonesia to Vietnam. Similarly, regarding the layoff issue, the companies stated that there has been no reduction in workforce or layoffs at their production facilities.
“Based on the results of tracing the truth of this information, we from the Ministry of Industry temporarily conclude that, firstly, there is no plan to relocate the production facilities of PT JAI and PT SAI from Indonesia to Vietnam. And secondly, there is no reduction in workforce or layoffs at the two industrial companies,” said Ministry of Industry spokesperson Febri Hendri Antoni Arief when contacted on Tuesday (23/6/2026).
Bob Azam, Chairman of Employment at the Indonesian Employers’ Association (Apindo), said his organisation has not yet received an official report regarding the relocation of the two Japanese companies from Indonesia to Vietnam. The circulating information needs to be examined further to avoid causing unrest.
“It must be investigated first, don’t just bomb it (with news that the company is leaving). Because that can cause unrest and so on,” Bob said on Tuesday (23/6/2026).
Bob admitted that the information he has received so far also does not point to a full closure of operations. Therefore, further investigation is needed before drawing conclusions. “What I heard is not like that. So, we must investigate more deeply,” he said.
According to him, the investment movements of multinational companies do not always mean the closure of operations in a country. Steps taken could be regional consolidation, product repositioning, or supply chain adjustments, which are part of a global business strategy. “Because these are multinational companies operating in several countries with different production lines. So it’s not that simple,” Bob said.
Regarding the company in question, Bob said the information he received points to an industry producing electrification components, some of which are exported to the United States. Global trade dynamics, including tariff policies in export destination markets, also need to be considered when interpreting the company’s business decisions.
Previously, based on an official statement from Said Iqbal, President of the Confederation of Indonesian Workers’ Unions (KSPI)/Labour Party and Special Adviser to the President on Employment and Worker Welfare, there were findings of a potential threat that two automotive component companies in Pasuruan and Mojokerto, East Java, would leave for Vietnam. “Initial information indicates that the prolonged war situation has led the Japanese principal to plan to move its investment to another country and focus more on electric vehicle development in Vietnam,” he said.
To anticipate this, several steps will be taken. The labour union will negotiate with the company to convince them not to move to Vietnam. “From there, I will communicate with the DPR and the President to encourage policies that support the development of the electric vehicle industry in Indonesia,” said Iqbal.
Bob continued that the circulating issue regarding the foreign company leaving serves as an important reminder for the government to maintain Indonesia’s investment attractiveness, especially for manufacturing companies that contribute significantly to employment, investment, and exports. Bob referred to companies that are labour-intensive, capital-intensive, and export-oriented as “five-star companies” that need special attention. “We must really protect five-star companies. Companies that are labour-intensive, capital-intensive, and export-oriented. Don’t let these kinds of companies be neglected,” he said.
According to Bob, one issue that needs attention is the smooth processing of Value Added Tax (PPN) restitution for exporters. Delays in restitution could disrupt company cash flows, especially in the manufacturing industry. In addition, Bob highlighted industry complaints about the increasing difficulty of importing raw materials amidst efforts to maintain rupiah exchange rate stability. He argued that import restrictions should not be applied to raw materials used to produce export goods. “If raw materials are imported and then the results are exported, why should they be held? That actually generates foreign exchange. So, imports for export purposes should be prioritised,” he said.
Bob also highlighted the acceleration of government service integration through a risk management system that allows companies with good track records to obtain faster licensing and services. According to Bob, overlapping regulations or policies between ministries and agencies remain a complaint for the business community. Therefore, it is important for the government to reduce bureaucratic inefficiency. Amid increasing competition to attract manufacturing investment in the Southeast Asian region, business players consider regulatory certainty, bureaucratic efficiency, and smooth export-import activities to be key factors in determining Indonesia’s competitiveness as an investment destination.