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Chinese equipment giant signs $8.5b LOI on Palu SEZ project
The developer of the Palu SEZ and the Chinese equipment manufacturer are to set up an investment management "team" in the next stage of negotiations.
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An artist's rendering shows the Palu Special Economic Zone (SEZ) that is being developed in North Palu, Central Sulawesi. (File/ Courtesy of KEK Palu)
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major Chinese state-owned company has recently invested Rp 120 trillion (US$8.5 billion) in a factory development project in the Palu Special Economic Zone (SEZ).
Metalworking equipment manufacturer China First Heavy Industries (CFHI), the latest in a growing list of foreign companies that have channeled funds for large-scale projects in the country in recent months, is to begin rolling out the fund in installments in the coming year.
“We will begin by investing $3 billion in the first phase, which is in January,” said CFHI chairman Liu Mingzhong after signing the letter of intent (LOI) on Tuesday at the Central Sulawesi Governor’s office.
Liu stated that CFHI was the world’s largest supplier of smelting products and equipment, and claimed that the company’s reactor pressure vessels had a capacity of 3,000 tons, far exceeding the 1,500- and 1,200-ton capacity vessels produced respectively by Japanese and Indian manufacturers.
CFHI was a main supplier for nuclear power plants around the world, Liu added. In addition, the company also produced equipment for the automotive and defense industries.
“After a survey of the Palu SEZ, we are willing to invest in and manage 1,500 hectares of the region,” he said.
The project is good news for the Indonesian government as it strives to net more foreign investment to anchor sluggish growth in the economy.
