Foxconn investment in Indonesia win-win: official

Foxconn, which is owned by Taiwan's Hon Hai Precision Industry Co., is still in talks with the Indonesian government over the investment plan, said Muhamad Chatib Basri, chairman of the Indonesia Investment Coordinating Board.

“We are in the process of negotiation” because of some requests made by the Foxconn side, Basri said at the CommonWealth Economic Forum in Taipei.

“We need to find answers and discuss, regarding land issues and local partners,” he said. Once these issues have been resolved, he said, the plan will have great investment potential and will be very useful for the two sides.

From Foxconn's point of view, the company will have a huge market that is expected to have strong consumer spending over the next 15 years, Basri said.

For Indonesia, the investment plan will help create a new phase for the country's innovative and technology products industry, he added.

Basri cited Indonesia's young population as one of its strengths, compared with some countries that are facing rapidly aging populations, such as Japan.

Some 50 percent of the population in Indonesia is in the labor force although this percentage might slightly drop to 45 percent by 2025, he added, pointing out that a country with a young population has strong consumption, strong savings and strong investment.

Basri also touched on issues Indonesia needs to address, including the improvement of its infrastructure, to support its economic growth.

A Hon Hai executive said Jan. 4 that if the company decides to invest in Indonesia, it will consider in the first stage setting up an assembly plant to produce smartphones but said that “there is no timetable at present.”

The executive, who spoke on condition of anonymity, said the investment will depend upon three conditions — finding a suitable partner in Indonesia, strengthened Indonesian government regulations on imported mobile phones, and staying abreast of developments in the Indonesian market and consumer trends there.

To learn about the smartphone situation in the Indonesian market, the executive said, the company could first set up shops or trading footholds there to get to know the conditions for developing the smartphone market.

The Indonesian media recently listed potential partners for Foxconn as PT Hartono Istana Teknologi, a manufacturer of electronic products; PT Industri Telekomunimasi, a state-owned cellular network developer; and PT Telekomunikasi Indonesia, the country's largest telecom company.

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