Indonesian President Joko Widodo, commonly known as Jokowi, launched the second phase of an industrial complex in Central Java on Friday. The Batang industrial park aims to attract investors seeking to diversify their supply chains away from China.
Expanding Industrial Park
Batang industrial park currently hosts nearly 20 companies within 10% of its total 4,300 hectares. Notable companies include South Korea’s LG Energy Solution and glass maker KCC Glass, both of which have begun construction or pledged to build factories there.
President Jokowi announced that companies have invested 14 trillion rupiah ($860 million) in the park so far. With the launch of the second phase, an additional 400 hectares will be offered to investors to create more manufacturing jobs. “We have to open as many jobs as possible for our people,” Jokowi emphasized.
Incentives for Investors
Companies investing in the Batang park can benefit from tax breaks on machinery imports, according to tax rules governing industrial parks. This incentive aims to attract more investors to the region.
LG Energy Solution’s Investment
LG Energy Solution is set to start producing cathode, a critical component for electric vehicle batteries, in September. The company previously announced plans to build a $2.4 billion factory in Batang to produce 220,000 tonnes of precursor and 42,000 tonnes of cathode annually. This production will supply raw materials for a planned 200 gigawatt-hour battery cell plant in Karawang, West Java, valued at $3.6 billion.
Economic Impact
The development of the Batang industrial park and the investments by companies like LG Energy Solution are expected to significantly boost the local economy and provide numerous job opportunities. Jokowi’s initiative underscores Indonesia’s commitment to becoming a key player in the global supply chain and attracting substantial foreign investment.
($1 = 16,285.00 rupiah)
With Inputs from Reuters
