South Korean shoemaker plans $150m investment in Central Java: BKPM

A South Korean shoe producer will invest US$150 million to develop a shoemaking factory Jepara, Central Java. The South Korean firm is likely to employ thousands of local workers, the Investment Coordinating Board (BKPM) chairman said on Sunday.(TheJakartaPost)

The development will help boost the local economy, BKPM chairman Franky Sibarani said, adding that the factory was likely to employ as many as 15,000 local laborers. He declined to name the investor.

“Production is 100 percent export,” he said as quoted by Antara news agency. The investor reportedly targeted Central Java as the location of their plant due to sufficient infrastructure and the competitive cost of local labor for labor-intensive industry. The South Korean company have acquired a principle permit from BKPM and are expected to start factory construction and machine installation soon, Franky said.

BKPM have welcomed the investment plan. The agency is pushing to boost investment in Indonesia amid a challenging global economic situation, he added. As added value for the local administration, BKPM have encouraged the firm to use local raw materials, he said.

With a total investment of US$188 million with 435 projects in the first quarter of 2016, South Korea is the sixth biggest source of foreign investment in Indonesia, according to BKPM data. The investment provides employment for more than 28,000 workers. In 2015, South Korea reported a total investment of US$ 1.2 billion in Indonesia, a 7.6 percent from the same period the previous year. (rin)