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Analysis: Jokowi lures Apple CEO to build first manufacturing facility, invest in IKN
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President Joko “Jokowi“ Widodo talks to journalists from The Jakarta Post during an interview at the Presidential Palace in Jakarta on Nov. 2. (JP/Abdur Rahim)
P
resident Joko “Jokowi” Widodo recently welcomed Apple CEO Tim Cook to the State Palace, as the United States tech giant and the Indonesian government look to expand collaboration with one another. The two discussed multiple matters, including Jokowi’s desire for Apple to build a manufacturing facility in the country and invest in the future capital city, Nusantara (IKN).
Cook’s visit to the State Palace on April 17 aimed at discussing Apple’s investment opportunities in the country. According to Cook, Indonesia is one of the company’s most important target markets with its investment ability deemed “endless” and holding “a lot of great places to invest”.
While specific investment plans in Indonesia have yet to be confirmed, Cook revealed that the meeting discussed the President’s desire for Apple to set up a manufacturing facility, given the absence of such a facility in the country.
With Cook saying that Apple would consider this plan, Industry Minister Agus Gumiwang Kartasasmita, who accompanied Jokowi in his meeting with Cook, said he hoped that if the company decided to build a manufacturing facility in the country, it would have the capacity to meet export demand.
He also suggested that Apple consider partnering with domestic manufacturers to incorporate locally made components, especially since the government mandates that phones sold in the domestic market must have a minimum local content of 35 percent.
According to Communications and Information Minister Budi Arie Setiadi, who was also present at the meeting, Jokowi had made a similar request to the Apple CEO, asking Cook to increase the number of components sourced from Indonesia to increase its products’ local content.
With these requests at hand, Agus explained that Apple had in fact already fulfilled the local content requirement by investing in its developer academies, but the government hoped that Apple’s local content could be pushed higher with a manufacturing facility. These academies were established as part of an agreement allowing the import of finished iPhones into the country. With a total investment of Rp 1.6 trillion (US$98.5 million), Apple has established its Apple Develop Academy in South Tangerang in Banten, Surabaya in East Java, and Batam in Riau Islands.
