DK-Batam-Pegatron Corporation, the maker of Apple’s iPhones, is scheduled to start operating in Batam, Riau Islands, in April this year after the Taipei-based manufacturer agreed to rent a factory in a specially designated economic zone.
The company is planning to invest up to US$300 million in the long run.
The general manager of Batam’s Batamindo Industrial Park, Mook Sooi Wah, confirmed the company would rent a 2-hectare manufacturing plant in the park.
“The company will officially start operations in April,” Mook told The Jakarta Post recently.
Batam Development Industrial Authority (BP Batam) chief Edy Putra Irawadi said Pegatron’s total investment could reach $300 million with an initial investment of $40 million. However, he said his side had not heard of confirmation from the company regarding its plan to build a manufacturing plant in Batamindo.
“The company wants to build a large manufacturing plant in Batam as the city has the spare land it needs,” Edy said.
A trade war between the United States and China prompted the company to leave the latter and enter ASEAN countries, including Indonesia. In December, it announced its partnership contract with Batam-based listed electronics manufacturer PT Sat Nusapersada for the purpose of assembling various electronic products to be exported to the US.
Pegatron’s plan to build a manufacturing plant in April coincides with the government’s deadline for the settlement of dual leadership in Batam. Previously, both the Batam Development Industrial Authority (BP Batam) and the Batam administration had the authority to issue business licenses, creating confusion among investors because of frequent policy changes.
There are doubts over the merger plan with the presidential election just around the corner.
Riau Islands’ Chamber of Commerce and Industry (Kadin) chairman Makruf Maulana said the government’s decision to merge the two bodies was not fully supported by its coalition parties.
“Let’s wait until the presidential election ends and see whether the policy will be implemented. Some politicians in Jakarta still want the central government to meddle in Batam’s affairs due to the region’s proximity to a number of countries. The central government’s role is channeled through BP Batam,” he said.
Office of the Coordinating Economic Minister secretary Susiwijono assured that the presidential election in April would not affect the merging process of the two bodies. He said his side would accelerate the transition process, which is currently being led by recently inaugurated BP Batam chief Edy.
The government assigned the Batam mayor as the BP Batam ex-officio chief, although a government regulation for the appointment has yet to be amended. Coordinating Economic Minister Darmin Nasution previously said the deadline for the amendment was April 30.
“What we are working on right now are the problems lying right before us, which are the investments and the work plans. We are also reviewing the deputy chief post as the Batam mayor will be busy with his administrative work,” Susiwijono said, adding that his side would accelerate the revision of government regulation PP 46/2007 on Batam’s free trade zone.
Vice President Jusuf Kalla said the policy to designate the Batam mayor as the BP Batam ex-officio chief would be implemented soon to put an end to the dual leadership.
“There must be one coalition and one policy, instead of two policies. Both bodies surely need to adjust, so the city administration and BP Batam will be represented by one person and will implement one policy,” Jusuf Kalla said during his recent visit to PT Satnusa Persada Tbk in Batam, Riau Islands.
Edy said Batam’s status would also be changed to special economic zone (KEK) from free trade zone (FTZ).
“The change of Batam’s status from FTZ to KEK does not mean that there will be borders installed in the region. What will be built are virtual borders, meaning there will be documents required for the movement of goods,” he said.
Batam Mayor Muhammad Rudi refused to comment as he was still waiting for the policy to be implemented so he could be named ex-officio chief.
However, he promised that the business license would be issued in mere hours under his leadership as opposed to days. (ars/Hs)