Of course, it would be pointless if our natural resources and large market do not contribute to economic growth and job creationJakarta (ANTARA) - The Indonesian government welcomes the interest shown by South Korean steel producer, Posco, to invest US$3.5 billion (Rp52.2 trillion) that is expected to strengthen the integrated national steel ecosystem.
Minister of State-Owned Enterprises (BUMN) Erick Thohir assessed that the investment from Posco will further strengthen the vision of PT Krakatau Posco, a joint venture between PT Krakatau Steel and Posco, to become the largest steel player in Southeast Asia.
"This MoU is a real step for SOEs in supporting the strengthening of the steel and automotive industry ecosystems in Indonesia," he noted in a statement in Jakarta, Friday.
On July 28, 2022, President Joko Widodo and Thohir witnessed the signing of a memorandum of understanding (MoU) involving Investment Minister Bahlil Lahadalia, Krakatau Steel President Director Silmy Karim, and Posco President Director Kim Hag Dong in Seoul, South Korea.
Thohir noted that the investment value would be realized in the form of increasing automotive steel production capacity for the electric vehicle industry to the project of the new capital (IKN) Nusantara.
He affirmed that this cooperation also boosts the integrated national steel ecosystem.
According to Thohir, Posco is aware of Indonesia's abundant natural resources required for the development of the electric vehicle industry and a large market niche that provides an opportunity for Indonesia to become a global player in the steel industry.
In addition, Posco has borne witness to the successful transformation of Krakatau Steel that managed to reverse its condition from loss- to profit-making and from a conventional company to a modern one and was even able to suppress imports as well as strengthen the nation's resilience.
"Posco lauds the transformation of Krakatau Steel through debt restructuring, cash flow improvement, efficiency, and good business processes," Thohir stated.
Increasing investment cooperation will not only strengthen the competitiveness of SOEs but also be able to serve as a catalyst for economic growth, the minister stressed.
The minister hopes that SOEs would be at the forefront in improving the economy and creating job opportunities for the community, considering that they constitute one-third of Indonesia's economic power.
"Of course, it would be pointless if our natural resources and large market do not contribute to economic growth and job creation. This is a joint commitment between Krakatau Steel and Posco," Thohir stated.
Apart from Krakatau Steel, the Indonesian government also opens opportunities for South Korea to invest in the health sector.
Indonesia is serious about building a special health economic zone (SEZ) in Sanur, Bali, with the full support of state-owned enterprises in the hospital and pharmaceutical sectors.
"The Sanur economic zone will become a health and fitness tourism center, with international standard facilities," the minister remarked.
Moreover, the Indonesian government opens up opportunities for cooperation between the Telkom Group and South Korea.
He further said that Indonesia has the largest digital economy potential in Southeast Asia and is forecast to reach Rp4,500 trillion in 2030 or eight folds greater than the gross domestic product.
"Telkom is currently focusing on developing digital infrastructure, and Telkomsel is focusing on being an aggregator for creative content. Of course, South Korea also has the same interest regarding prospects for the digital economy," Thohir said.
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Translator: Sugiharto P, Azis Kurmala
Editor: Sri Haryati
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