Taiwan-based audio system manufacturer PT Meiloon Technology Indonesia has officially begun the relocation of its factory from China to Indonesia. It broke ground on the new factory in Subang, West Java, on Tuesday.
The firm is one of seven companies that committed in June to move their factories from China to Indonesia, representing a total investment of US$850 million. As global supply chains are disrupted during the pandemic, many firms have begun to question their heavy reliance on China.
The company, whose factory was previously located in Suzhou, Jiangsu province, China, pledged to invest $90 million and employ more than 8,000 workers in Indonesia, according to the Investment Coordinating Board (BKPM) data.
As a result of special assistance from the BKPM, Meiloon is the first recorded company in Indonesia to begin the construction of its facilities before its business license has been issued.
“This should serve as an example to other regions,” BKPM head Bahlil Lahadalia said in a virtual press event on Tuesday.
“It is no longer the time to deter investors. Now, we have to collaborate with the regency administrations, provincial administrations, the government and investors to grow the economy in the regions.”
President Joko “Jokowi” Widodo previously ordered the BKPM to simplify the process of obtaining business permits to cater to relocating firms. He also asked them to pledge to back up investors if problems with land procurement or other bureaucratic hurdles occurred.
Read also: Seven companies to relocate facilities to Indonesia, invest $850m
Indonesia is seeking to reverse its declining foreign direct investment, which was down by 9.2 percent year-on-year (yoy) to Rp 98 trillion in the January-March period.
Bahlil said Meiloon would give priority to local workers and local suppliers of raw and intermediate goods.
The firm hopes to start production no later than the second half of this year. It plans to sell all of its products overseas, including to its American partner, audio firm JBL.
“For the past two years we have spent our time surveying many countries, and finally, we decided that Indonesia and Subang were the best country and city to grow our business,” said Eva Kuo, the chief financial officer of Meiloon Industrial Co. Ltd.
The government is preparing thousands of hectares of land in Majalengka regency, West Java, to develop an industrial park to attract more investment, according to Bahlil. An industrial park in Batang regency, Central Java, has also been developed and has become a manufacturing hotspot.
West Java Governor Ridwan Kamil said on Tuesday that he planned to travel to China, Taiwan and other countries to promote West Java to foreign investors once pandemic-related travel restrictions eased.
“Those who go to get the ball themselves will win the investment, and those whose politics is ‘wait and see’ will become obsolete,” Ridwan said, adding that he hoped West Java would remain a top destination for foreign capital inflow.
Leopaard Prawira, a shareholder of Meiloon Technology Indonesia, said that he hoped the construction of the firm’s factory would encourage other companies to develop their businesses in Indonesia.
“This groundbreaking ceremony proves that business licensing in Indonesia can be done quickly,” said Leopaard.
There are currently 199 companies considering developing their businesses in Indonesia with a total potential investment of $41.4 billion and the potential addition of 162,000 jobs, according to the BKPM.
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July 21, 2020 at 05:03PM
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