BKPM hopes south Korea increase investment

JAKARTA. The Capital Investment Coordinating Board (BKPM) is optimistic that South Korea would increase its investment in Indonesia's labor-intensive industries, particularly in textile and textile products (PTP) and footwear.

BKPM Chief Franky Sibarani noted in a press statement here on Friday that South Korea was the biggest investor in the two sectors based on the investment realization in the first semester of 2015.

"PTP and footwear are two labor-intensive industries that absorb most of the workers. South Korea is a potential investing nation in the two sectors. Therefore, South Korea will become the focus of BKPM's investment promotion," Sibarani stated while accompanying Vice President Jusuf Kalla during his South Korean visit on Friday.

According to the BKPM, South Korean investment projects absorbed 35 thousand workers, with an investment value worth Rp2.01 trillion during the first semester of 2015.

Of all the projects, there were about 158 South Korean investment projects in the PTP sector and absorbed 27 thousand workers, with an investment value of Rp805.46 billion.

Meanwhile, in the footwear sector, South Korean investment in the first semester of 2015 was in 54 projects, with investment totaling Rp86.48 billion and absorbing five thousand workers.

Sibarani noted that a South Korean investment company was also included in the 54 investment projects whose construction work is on-going and is being monitored by the BKPM.

The company, which is located in Wonogiri, Central Java, is expected to enter the commercial production phase by the end of 2015, with the total workforce to be absorbed reaching 12.6 thousand.

The 100 percent export-oriented company has the potential to contribute to an export performance of US$10.5 million a year.

"South Korea has another garment company, which faces constraints with regard to spatial planning in Batang, Central Java. The fully export-oriented company has the potential to employ four thousand workers," Sibarani noted.

The Central Java BKPM office is now providing facilities in an effort to remove the constraints being faced by the South Korean firm.

Sibarani remarked that several South Korean investors in the labor-intensive sector had also met Vice President Kalla on Wednesday to voice their aspirations on various steps that the Indonesian government had taken in the face of the global economic conditions, which had yet to show signs of recovery.

"In general, they view Indonesia as a positive destination for South Korean investment," he affirmed.

Based on the data issued by the Financial Times, Indonesia is the seventh-biggest investment destination for South Korea, with 2.7 percent of its investment worldwide.

South Korean investment realization in Indonesia during the first semester this year increased 20 percent to US$790 million compared to US$650 million recorded in the corresponding period a year earlier.

The number of principle permits submitted by South Korea to Indonesia in the first semester of 2015 also increased by 39 percent to US$1.48 billion as compared to US$1.06 billion in the same period in 2014.