"Our main business strategy is to get out of the trap of being a raw material-exporting country at the earliest and to eradicate dependence on imported products by accelerating the revitalization of the processing industry," Jokowi stated at the Karawang New Industrial City, West Java, on Wednesday.
The president delivered the statement during the groundbreaking of the electric vehicle battery plant PT HKML Battery Indonesia through collaboration between Hyundai Consortium and Indonesia Battery Corporation.
"Thus, it can provide greater economic added value," the president stated.
Jokowi noted that the establishment of the factory reflected the government's seriousness to downstream the industry.
"The era of raw material commodities’ success is over. Thus, we must dare to change our commodity-based economic structure to become a strong industrial country based on the development of technological innovation," he emphasized.
Furthermore, President Jokowi remarked that downstreaming of the nickel industry would significantly increase the added value of nickel ore.
"If it is processed to produce battery cells, its added value can increase up to six to seven times. Meanwhile, if it is processed to be an electric car, the value will increase 11 times," he explained.
It means that development of the battery industry will also boost Indonesia's competitiveness as an investment destination for various industries that use batteries, such as electric motors, electric buses, and electric cars.
"We are fully committed to providing support for the development of the battery and electric vehicle industry ecosystem," the head of state remarked.
Furthermore, Jokowi affirmed that the government would also continue to conduct structural reforms to offer legal certainty and to ease the licensing process for business actors and investors to build their businesses in Indonesia.
"Indonesia is also open to various cooperation initiatives with our friendly countries. I hope this collaboration between Indonesian and South Korean companies would be strengthened, including the realization of investment cooperation for the realization of the battery and electric vehicle industry," he stated.
Establishment of the electric battery factory aims to support the supply of battery-based electric vehicle (BEV) batteries.
The electric car battery cell factory in Karawang District, owned by the South Korean company, will be built over an area of 330 thousand square meters.
Once fully operational, the facility is expected to produce a total of 10 GWh of Nickel, Cobalt, Manganese, Aluminum (NCMA) lithium-ion battery cells annually that are sufficient for more than 150 thousand BEVs.
According to the memorandum of understanding (MoU) signed for the project, the South Korean Hyundai Motor Group and LG Energy Solution will invest a total of $1.1 billion, or around Rp15.9 trillion, with a 50-percent stake for each company.
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