Jakarta. The government expects foreign direct investment to pick up more than expected to Rp 126 trillion ($14 billion) in 2010, up a third since last year.
Total investment is seen at Rp 180 trillion this year, rising to Rp 200 trillion in 2011, Gita Wirjawan, the chief of the Investment Coordinating Board (BKPM), said on Wednesday.
The government has said it aims to make Indonesia the manufacturing hub of Southeast Asia, including in the auto sector, and it is sending Gita to lead an investment mission to South Korea this month.
Gita said Hyundai, South Korea’s No. 1 carmaker, was interested in investing in Indonesia. He declined to offer a time frame but said he would meet company officials during his visit to Seoul.
“After POSCO invested here, the investment interest of South Korean companies to come here has increased. There are 10 companies including Hankook, showing their interest,” Gita said.
POSCO, the world’s No.3 steelmaker, is setting up a joint venture with Indonesia’s top producer Krakatau Steel, and is also looking at buying coal and iron ore mines in the country.
Indonesia is keen to attract more foreign direct investment to provide more stable capital inflows and improve its chances of obtaining an investment-grade credit rating, and its growing domestic demand is leading to increased investor interest.
Officials said earlier this year that South Korea’s Hankook Tire was considering building a $1 billion factory in Indonesia.
Car sales in Indonesia are expected to hit a record high this year, and shares in top vehicle distributor Astra International hit a record high on Wednesday.
Gita said in July that FDI was forecast to reach Rp 118.4 trillion in 2010, versus last year’s realized investment of Rp 94.5 trillion.
He said total investment was expected to reach Rp 550 trillion in 2014, boosted by infrastructure projects from public-private partnerships. Investors cite inadequate infrastructure, from roads to power, as a key obstacle.
Source : http://www.thejakartaglobe.com/business/fdi-tipped-to-rise-30-this-year-on-back-of-growing-domestic-demand/396315 - Sept 15, 2010
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