Taiwanese companies will establish an industrial zone in Jakarta, Indonesia, which can serve as a base for businesses from Taiwan planning to make inroads into the Indonesian market.
The China Steel Structure Co (中國鋼鐵結構) signed an agreement with Acquire Universal Advantage Land Development (AUA, 寰宇利達) in Greater Kaohsiung on Friday to jointly develop and construct a Taiwanese industrial zone in the Indonesian capital.
The planned industrial zone, to be developed over an area of 216 hectares, is expected to attract 120 businesses, with an annual production value of US$30 billion, the developers said.
They also said that Indonesian authorities have agreed to grant a 10-year tariff waiver to businesses in the sectors of machinery, textile and farming equipment production that build factories in the industrial zone.
AUA chairman Hsu Chuan-jen (徐川人) expressed hope that the planned industrial zone would develop into a cluster of Taiwanese factories, where Taiwanese companies could enjoy services without facing language barriers.
According to the Asian Development Bank’s Asian Development Outlook report for this year, the economic growth of Indonesia, the biggest economy in Southeast Asia, is forecast to increase 0.2 percentage points to 6.4 percent this year, supported by robust domestic consumption, improved investment and a gradual pickup in world trade.
The signing of the bilateral economic cooperation agreement between Taiwan and New Zealand earlier this month has aroused other regional economies’ interests in seeking economic cooperation with Taiwan, Hsu said.
He said that for Taiwanese companies, the investment climate in Indonesia is more favorable than that of China, where foreign investors are faced with rising challenges, including surging labor costs.
In related news, China Steel Corp (中鋼) said on Friday that four major production lines of its cold-rolled steel mill in Vietnam, China Steel Sumikin Vietnam Joint Stock Co, will soon begin operation after its test run period proved successful. The mill is a joint venture with Japan’s Nippon Steel and Sumitomo Metal Corp, with investment also from Formosa Plastics Group’s (FPG, 台塑集團).
Additional reporting by Camaron Kao