Jakarta Governor Joko 'Jokowi' Widodo has promised to provide a 200-hectare plot of land in Marunda, Central Jakarta, for Taiwanese electronic giant Foxconn Technology Group's first Indonesian factory.
Speaking after signing of a Letter of Intent with Foxconn chairman Terry Gou at City Hall on Friday, Jokowi said the city administration would help the company establish its business in the capital.
'We will provide a 200-hectare plot of land and will give 20 hectares first,' he said, adding the company would invest around US$1 billion for three to five years.
Jokowi said he encouraged business entities, especially the high-end manufacturers, to invest in Jakarta. 'This kind of company will bring added value to the city,' he said, adding that the companies could hire talented young Jakartans to work with them and promote high-tech investment in Indonesia.
'We have to stop working with this [pointing to his hand] and start working with this [pointing to his head],' he said.
Foxconn is the holding company of the world's biggest electronics manufacturer, Hon Hai Precision Industry Co. Ltd., which produces electronic devices for cell phone products like Sony, HTC and BlackBerry.
The company said earlier that it would not only manufacture cell phones but would also a wide array of consumer electronic products in Indonesia.
Jokowi was optimistic Jakarta was the right city for high-tech industry investment due to the relatively better quality of human resources available in the city. 'Moreover, we have 368 universities and colleges in the city,' he said.
Jokowi added that although Jakarta's minimum wage might be higher than other regions like West Java and Banten, compared to other countries like China and Taiwan, Jakarta was much cheaper.
North Jakarta Mayor Heru Budi Hartono said the city administration vowed to give some benefits, including free land rent for the first year, the acceleration of infrastructure development, the ease of acquiring permits and a guarantee of business sustainability, to Foxconn.
Heru said, meanwhile, the company promised to begin the investment in 2014. 'The plant can absorb around 2,000 workers,' he said.
He said the company was also obliged to transfer the technology to Jakartans. He added that the technology transfer could be conducted to Vocational School students, university students and communities.
Heru said Foxconn would bring the blueprint of the plant and discuss the cooperation further with the city administration in April.
Gou said one of the reasons he chose Jakarta was because of the governor. He said the governor sent a team to Taipei to verify whether Foxconn would invest or not.
'We knew he was serious, not just talk,' he said, adding that once he met Jokowi, he was able to speed up the process of the investment.
Gou said, however, that other reasons were also considered. 'There is a large young generation and natural resources,' he said, adding the investment was good for the city.
Foxconn will cooperate with its local partners, including developer Agung Sedayu Group and cell phone distributor and retailer PT Erajaya Swasembada.