Jakarta: South Korea’s Hankook Tire and steel giant Arcelor Mittal are considering investments in Indonesia, of $1 billion and $5 billion respectively, officials said on Wednesday.
Indonesia, Southeast Asia’s biggest economy, is keen to attract more foreign direct investment as this would provide more stable capital inflows and improve its chances of obtaining an investment grade credit rating.
“Arcelor Mittal has stated their intention to invest with us and has already met with the government of Banten but there’s no definite value yet,” said Gita Wirjawan, the head of the investment board, referring to an area in western Java.
“We hope to secure commitment in the second half from South Korea’s Hankook, about $1 billion for a new tyre factory. They told us Indonesia is on the shortlist for their investment,” Wirjawan added.
Industry minister MS Hidayat said that Arcelor Mittal will invest in Banten and that the value of the investment was around $5 billion.
Earlier this week, the state-owned enterprises minister said that China Investment Corp (CIC) may invest up to $25 billion in Indonesia.
China’s $300 billion sovereign fund is initially ploughing $2 billion into coal, electricity and port projects in Indonesia, the world’s largest exporter of coal for power plants, although there was no timeframe for investments that could overhaul the country’s infrastructure.
Indonesia, Southeast Asia’s biggest economy, also has abundant palm oil, copper and timber — resources in strong demand in China, which has stepped up investments in resource assets from Australia to Canada to fuel its growth.