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Govt facilitates Korean firm to build factory in C. Java
The government is working to help a South Korean footwear company accelerate its plan to build a factory here, as the country expects to draw in more foreign investments to boost economic growth
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he government is working to help a South Korean footwear company accelerate its plan to build a factory here, as the country expects to draw in more foreign investments to boost economic growth.
The company, which manufactures sports shoes and apparel, will build a US$120 million factory in Jepara, Central Java and employ 20,000 workers, according to the Investment Coordinating Board (BKPM) head Franky Sibarani.
'The company will also bring in at least six suppliers and we estimate the total direct employment from the project can reach 50,000 workers,' Franky said in a statement on Wednesday.
According to the Industry Ministry's data, the average growth of investment in the footwear industry reached 4.74 percent from 2011 to 2014. Total investment in the industry as of last year stood at Rp 10.7 trillion, an increase of 1.25 percent from a year earlier, and employed 643,000 workers, the data revealed.
Cahyo Purnomo, BKPM's investment marketing officer for Singapore and South Korea, said the company would develop the plant pending the issuance of permits by the Central Java and Jepara administrations.
Cahyo said he had accompanied the investor to a meeting on Tuesday with Jepara Regent Ahmad Marzuki and Central Java Governor Ganjar Pranowo, who ordered his officials to expedite the permit process for the plant's construction and facilitate its road access.
Cahyo said Governor Ganjar had also requested the head of BKPM's regional and regency branches and the one-stop licensing services to talk with relevant officials about the project, including about electricity supplies and bonded zones.
The company is also expecting to coordinate with a local training center and administration regarding the supply of the workforce, Cahyo added.
'The governor is using the project to show the regional administration's commitment to help the company realize the plant,' Cahyo said.
South Korea stood as Indonesia's fourth largest foreign investor in the first half of this year with a total investment of $787.8 million in 1,026 projects. Indonesia's realized investment rose 16.6 percent to Rp 259.7 trillion year-on-year in the first six months of this year, with foreign direct investment accounting for Rp 174.2 trillion, or 67 percent of the total, BKPM data showed.
The BKPM aims for a total of Rp 530 trillion in realized investment by the end of the year, or 14.4 percent more than last year.
Franky, who met the company's delegation on Wednesday, said that the BKPM gave special attention to any investments in labor-intensive sectors, which could absorb a lot of workers at a time when Indonesia has a high unemployment rate.
Indonesia's unemployment rate increased in February to 5.81 percent from 5.7 percent in the same month last year, Central Statistics Agency's (BPS) data showed. The rate means there were 7.45 million unemployed people out of the country's total workforce of 128.3 million.
Aside of absorbing more employees, Franky said the project showed that Indonesia was seen as having the potential to expand its manufacturing sector, which accounted for Rp 112.8 trillion, equal to 43.4 percent of Indonesia's total realized investment as of first half this year.
'The percentage slightly increased from 43 percent or Rp 199.1 trillion by the end of last year,' Franky added.
