Kobe industrial plants likely to move to Indonesia
Kobe industrial plants likely to move to Indonesia
JAKARTA (JP): Indonesia expects more industrial plants from the Japanese earthquake-hit town of Kobe to relocate here, State Minister of Investment Sanyoto Sastrowardoyo said yesterday.
Speaking at a hearing with the Manufacturing, Mining and Energy Commission of the House of Representatives, Sanyoto predicted that the earthquake in Kobe, the worse in 50 years, would drive Japanese industrialists to relocate their plants from the city.
"However, we have to compete with our neighboring countries, such as Malaysia, the Philippines and Thailand, because they are also trying to attract relocating companies," said Sanyoto, who is also chairman of the Investment Coordinating Board.
Meanwhile, Richard R.P. Napitupulu, a deputy Board chairman, noted that before the earthquake, there had been relocation of industrial plants, especially those producing petrochemicals, from Kobe to Indonesia.
Minister Sanyoto yesterday also assuaged fears that the Kobe quake would cause a decline in the realization of Japanese investment commitments in Indonesia.
Estimates have said that it would cost up to US$100 billion to repair the damages in Kobe.
Sanyoto believes that Japan will not reduce its foreign investment because Japan still has huge foreign exchange reserves -- $120 billion. Besides, Japan's economy has been recovering from the recession.
He said that industrial plant relocation is part of Japan's economic policies to maintain the competitiveness of its products on the world market.
Attractive site
The minister also appeased assumptions that Japanese investors have been less interested in Indonesia, saying that Indonesia remains an attractive site for investments.
"From our investment mission to Japan and our discussions with giant Japanese companies such as Marubeni Group and Sony Group, we are convinced that Japanese businesses still consider Indonesia one of their preferred destinations for investments," Sanyoto told the commission.
According to a survey conducted by a U.S. consulting firm, Erns & Young International, which was released last December, Indonesia is the third most attractive spot for foreign investments after China and India.
Sanyoto said the government will continue deregulatory measures in real sectors to attract more foreign investments, especially from Japan.
Japan remains Indonesia's largest investing country with total investment commitments of $18.63 billion, or 20 percent of total foreign investments, as of January, followed by Hong Kong with $14.14 billion, Britain with $9.68 billion, the United States with $8.66 billion, Singapore with $7.25 billion, the Netherlands with $7.21 billion and Taiwan with $6.84 billion. (rid)