Jokowi is expected to discuss with the Korean leaders expansion of economic cooperation between the two countries especially in investment in the manufacturing sector, Industry Minister Airlangga Hartarto said here on Saturday.
Airlangga aaid the two countries already have agreement to provide an umbrella for bilateral cooperation to speed up development of industries potential in each country.
Commitment in bilateral cooperation was marked with the signing in Bogor of memorandum of understanding (MoU) by the Indonesian Minister and Korean Trade, Industry and Energy Minister Paik Un-gyu in front the presidents of the two countries on November 9 last year.
The MoU was on industry, investment and transfer of technology, which was expected to contribute to the economic development of the two countries, Airlangga, who will accompany the president in the visit, said.
He said strategic partnership between Indonesia and South Korea would accelerate development of Indonesia`s manufacturing industry and increase the competitiveness of the industry.
Among the potential industries to be included in the cooperation program are metal, automotive, chemical, shipbuilding , electronics and small and medium industries, he said.
He went on to say part of the manufacturing sector are priorities in the road map of Making Indonesia 4.0, which will be the pioneer in the implementation the fourth industrial revolution in Indonesia.
He said he hopes cooperation between the private sector of the two countries would deepen Indonesia`s manufacturing industry.
The minister said he had actively pushed for the implementation of investment commitments by Korean companies in Indonesia.
He cited Lotte Chemical Titan plans to invest US$3.5 billion in Cilegon, Banten, to produce naphtha cracker with a total capacity of 2 million tons a year.
Naphtha is needed as a feedstock in the production of ethylene, propylene and other derivatives to end dependence on import for the basic material, he said.
The project will also be important as it would open 9,000 new jobs, he added.
He said big progress has been made in the cooperation between the two countries in the manufacturing sector such as in the development of steel industry between Pohang Iron Steel Company (Posco) and the state steel maker PT Krakatau Steel Tbk under joint venture PT Krakatau Posco.
Krakatau Posco will cooperate with Nippon Steel to build a new cold rolling mill, of which the end users are mainly Japanese companies in the automotive sector. Implementation of the project is to start in 2019.
In the automotive sector, the Industry Ministry has also asked Hyundai Motor Corporation (HMC) to increase its investment in Indonesia, Airlangga said .
"We have told HMC that if it is interested in doing business in Indonesia, we could recommend strategic partners other than those of its rival car making companies to fill the open market for sedan cars," he said.
He said the Industry Ministry wants an increase in the production of sedan cars for exports to follow the plan to cut the luxury sales tax on sedan cars.
Indonesia and South Korea have also committed to supporting development of small and medium industries, which are highly potential to drive the country`s economic development, he said.
The two countries have sought to expand cooperation in the development of creative industry such as through Korean Creative Content Agency in Jakarta.
President Jokowi said cooperation that still needs to be strengthened is relations the younger generations of the two countries, Airlangga said.
The value of Korean investments in the country have increased from year to year making South Korea the fourth largest foreign investing country in Indonesia. In the first half of 2018. South Korea`s new investments in Indonesia were valued at US$1.15 billion. In the whole of 2017, new Korean investments in the country were valued at US$2.2 billion.
The bilateral trade between the two countries was valued at US$16 billion in 2017 favoring Indonesia with a surplus of US$78 million .
Reporting by Sella Panduarsa Gareta (SYS/AS).
Editing by A Saragih, Eliswan
(T.SYS/B/H-ASG/A/E002) 08-09-2018 11:15:16