"This is the initial stage. The factory will supply 65 percent of Apple's AirTag needs worldwide," he informed in Jakarta on Wednesday.
According to the minister, with an initial investment of US$1 billion, the project is expected to create two thousand jobs.
The investment will continue to be pushed until it reaches US$10 billion, he added.
He informed that the vendor's factory is targeted to be completed by early 2026.
"This is going well. However, we are still negotiating. Investment is a long-term commitment and we do not like surprises. Everything should be measurable, structured, and certain. We will give them assurance," he said.
Although the government has given the green light to the AirTag vendor factory in Batam, Apple's latest product, the iPhone 16, will still not be able to enter the domestic market, Industry Minister Agus Gumiwang Kartasasmita said recently.
He explained that the factory will not be directly involved in the process of making mobile phones, handheld computers, and tablets (HKT), which is a requirement for obtaining domestic component level (TKDN) certification.
This provision is regulated in the Regulation of the Minister of Industry Number 29 of 2017 concerning Provisions and Procedures for Calculating TKDN Values.
According to Kartasasmita, during negotiations between his party and Apple on August 7, 2024, the US technology giant submitted a proposal to fulfill TKDN certification through the third investment scheme, namely innovation.
The first scheme involves the construction of production or manufacturing facilities directly related to HKT components, while the second scheme involves the creation of applications or software domestically.
However, the investment offered by Apple for the third scheme was not in line with the four principles of justice determined by the government.
The four principles include a comparison of Apple's investment in other countries; investment by other manufacturers of mobile phones, handheld computers, and tablets (HKT) in Indonesia; added value and income for Indonesia; and absorption of labor in the ecosystem.
"We told them that the value proposed by Apple in the third scheme is still below our technocratic consideration," the minister said.
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Related news: Apple's AirTag investment will not secure iPhone 16 entry: RI Govt
Translator: Imamatul Silfia, Resinta Sulistiyandari
Editor: Arie Novarina
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