China to Build Shipyard in Indonesia

China is interested in investing on shipyards in Indonesia. The intention was revealed while 10 Chinese delegations were visiting Industry Minister MS Hidayat at the office of Industrial Department in Jakarta today, November 26. Hidayat explained that the visit aimed to probe into investments on several potential industrial sectors in Indonesia.
“I offered the industries of shipyards, infrastructure and steel,” he said after meeting the Chinese delegations.
For shipyard industry, Hidayat added, a small meeting between the Secretary General of Industrial Department and the Secretary General of Association Federation, which consists of 2.3 million company members, would be conducted to discuss further on the issue.
Head of Delegations Huang Mengfu welcomes the more intense collaboration between Indonesia and China. Besides the shipyard industry, Chinese investors are also interested in machinery and agriculture industries.
“We’ve had one shipyard company in Indonesia and the company would do an expansion. Aside from that, we need to find a partner in Indonesia. If we don’t, it would cause a problem,” Mengfu said.
However, he would not mention the potential investment that will be established in Indonesia after the meeting. “We chose Indonesia because this country has stable political condition, incredible economic development and the biggest population in ASEAN,” Mengfu said.
He even said that by building factories in Indonesia, in addition to taking on Indonesia’s domestic market, they could also aim at ASEAN market.
In order to execute the investment plan, Mengfu has asked the Indonesian government to provide tax incentives.
Industrial Department’s Director General of Transportation and Telecommunication, Budi Darmadi, assumes the investment agreement could boost the productivity of the boats using the smart technology mastered by China.
“China is able to create boats with cheap production process because they’re employing smart technology such as the balloon system,” Darmadi said.
Three to four Indonesian shipyard industries will be brought together with three to four Chinese shipyard industries to follow-up the plan.
“The investment on boat productions will probably be less than 50 thousand tons,” he said.
The investments are also intended to build boat component factories in Indonesia.
“Cooperation in making factories that produce components that haven’t been able to be made in Indonesia will also be held,” Darmadi said.
As for shipyard investments, he said, the government will be giving tax incentives in the form of tax-free privilege.