Indonesia Rolling Out the Red Carpet for Foxconn
Damiana N. Simanjuntak
The Indonesian government is working hard to accommodate Foxconn, the Taiwanese electronics manufacturing giant that announced its intentions earlier this month to invest here.
Foxconn, also known as Hon Hai Precision Industry, produces electronics components for Apple, Acer, Cisco, Dell, Hewlett-Packard, Intel, Microsoft and others. With production facilities around the world, Foxconn is the largest maker of electronic components in the world.
Its chairman, Terry Gou, visited Jakarta early this month and met with President Susilo Bambang Yudhoyono to present Foxconn’s investment plans.
The company said in a statement on Friday that it was looking forward to establishing a new manufacturing plant in Indonesia, while also stressing that nothing had yet been finalized.
“This will help us in manufacturing good-quality products and making them available in the markets at lower prices,” the statement said.
The investment could total $8 billion to $10 billion, Industry Minister M.S. Hidayat said.
“Foxconn is looking for 1,000 hectares of land,” the minister added. “They are planning to build some sort of Silicon Valley here in Indonesia.”
Sofjan Wanandi, chairman of the Indonesian Employers Association (Apindo), also has high hopes for Foxconn’s possible investment.
“The investment would be huge because the plan is to build an entire industrial city,” said Sofjan, who also met with the Foxconn chairman during his visit. Foxconn would also bring its components division to Indonesia, Sofjan added.
He said Foxconn was still performing a feasibility study as it worked out the specifics of its investment plan. “Foxconn would need at least 1,000 engineers,” he said. “They are also ready to commit for technology transference.”
The government will send officials from the Industry Ministry and the Investment Coordinating Board (BKPM) to Taiwan to take a look at the company’s facilities there. One of the officials expected to make the trip is Budi Darmadi, director of technology-based industries at the Industry Ministry.
Hidayat said Foxconn’s investment would provide a lift for the domestic work force, with more Indonesians recruited to work in the high-tech industry. “That is the most important thing,” he said.
Indonesia is now in the process of readying 1,000 hectares of land outside of Java with infrastructure for the potential Foxconn site, he added.
Rachmat Gobel, the chairman of the Indonesian Electronic Industry Association (Gabel), said the country needed more companies like Foxconn to invest in the high-tech industry here.
“Soaring labor costs in other countries provide Indonesia with an opportunity to lure companies like Foxconn,” he said.
Rachmat, who is also chairman of the Indonesian Renewable Energy Society (METI), said his hope was that Foxconn would not only build a manufacturing facility here, but also research and development facilities.