Korean giants seek investment in Indonesia
Rendi A. Witular, The Jakarta Post, Jakarta
Leaders of four South Korean giants visited on Sunday President Susilo Bambang Yudhoyono, conveying their plans to expand their businesses in Indonesia and seek cooperation for the development of certain industries.
The leaders included Korea Electric Power Corporation (Kepco) president Han Jun-ho, Korea Highway Corporation (KHC) president and chief executive officer Seung Hak Lai, Korindo Group chairman Seung Eun-ho and SK Corporation chairman Choi Tae-won.
Coordinating Minister for the Economy Aburizal Bakrie told The Jakarta Post that the executives were planning business expansions in Indonesia while also urging improvement in some of the country's policies that are deemed detrimental to investment.
"Daewoo and Kepco are seeking cooperation to develop the defense and power industry, respectively, while KHC and Korindo have expressed interest in investing more in Indonesia," said Aburizal.
Aburizal said Korindo was planning to invest some US$2 billion over the next five years to open and develop 1,000 hectares of oil palm plantations in Papua and 100,000 hectares in Central Kalimantan, and several other industrial plantations.
Korindo, operating in Indonesia since the early 1970s, is one of Indonesia's largest business groups, with businesses including forestry-based industry, chemical processing, shipping, trading, financial, logistics and real estate.
Aburizal said Daewoo was offering cooperation in the field of defense and mining, while SK was seeking to set up a joint venture with state oil and gas company PT Pertamina to develop the processed oil business, and with state telecommunications company PT Telkom in offering Code Division Multiple Access cell phone technology infrastructure.
KHC is also planning to participate in a tender for a toll road project that will link Bandung and Cirebon.
Indonesia is South Korea's third-largest overseas investment destination after China and the United States, with total money reaching around $6.8 billion, employing about one million workers and generating annual exports worth $6 billion.
It is also estimated that 30,000 Koreans reside in Indonesia, while 25,000 Indonesians work in South Korea.
Aburizal also said that the four companies had urged Indonesia to make its labor laws and tax laws more competitive to lure foreign investors.
President Susilo has instructed the Indonesian Chamber of Commerce and Industry (Kadin) to help coordinate the Korean investment plans.
Susilo also visited a nuclear power plant in Kori, which is managed by Korea Hydro & Nuclear Power Co. Ltd., aiming at exploring the possibility of cooperating with Korea in developing a nuclear power plant at home to help reduce the country's dependency on plants fired by fossil-based sources.
At present, Korea has 20 nuclear power plants, and is building another four. About 27.9 percent of the country's power supply is generated from nuclear energy, 29.1 percent from coal, 26.2 percent from gas, 7.8 percent from oil and the remaining 3.8 percent from hydro power.