Korean giants seek investment in Indonesia

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.