Taiwanese electronics contract manufacturing giant Foxconn is reportedly interested and planning to build a factory in Indonesia.
The Jakarta Globe reported Thursday that Indonesia Industry Minister M.S. Hidayat spoke about Foxconn's intentions to enter Indonesia and it will be "bringing along technology, and [needing] some 1 million workers". The investment is estimated to be worth more than US$1 billion, the minister added.
Hidayat revealed Foxconn had requested to build the factory in central or east Java, although he preferred the company set up its operations outside Java island. "If they do so, I will give them incentives of tax holiday, tax allowance and other facilities," he said.
Indonesian Employers Association (Apindo) Chairman Sofjan Wanandi added in the report that Foxconn was conducting a feasibility study in preparation to enter the Indonesian market. The process could take up to a year to complete, since the Taiwanese manufacturer "will enter in a very large size, so they need a place that can actually meet their needs", he said.
Apindo will help find "a good Indonesian company as a partner to settle the infrastructure and space issues", Wanadi added.
The news agency also cited Indonesian Trade Minister Gita Wirjawan as saying Foxconn was interested in Indonesia because of its huge market potential, and it has yet to decide whether the planned Indonesian factory will supply only the Indonesian market or would include exports as well.
A separate report by The Jakarta Post on Thursday said Wirjawan's ministry was reviewing the prerequisites for Foxconn's entry, including the site, electricity and gas supply, and workforce needs.
Andrew Hsia, head of the Taipei Economic and Trade Office in Jakarta, also told the newspaper that Taiwanese firms were looking to relocate to Indonesia, as the country offered reduced labor and operating costs compared to other nations.
Foxconn, which assembles several popular tech devices including Apple's iPhone and iPad, has been in the spotlight for poor labor conditions and low wages paid to its factory staff. Both Foxconn and Apple have since pledged to improve working conditions at the factories.