INDONESIA: Chinese firms eye major plant investments
Up to nine Chinese garment manufacturers are mulling whether to relocate to Indonesia with the possibility of creating up to 200,000 jobs.
The archipelago state has long been a thriving garment production centre in South East Asia, given its competitive labour force and relativity advanced infrastructure.
Any move by the Chinese would mark the first foray from the giant country into Indonesia, although one Taiwanese garment maker does already operate there.
A high-level delegation headed by Chinese prime minister Wen Jiabao was due to travel to Indonesia later this month to discuss the deal, although this has now been postponed due to the recent devastating earthquake in the country.
"They [Chinese companies] have terms and conditions such as location, facilities and infrastructure that have to be agreed," Indonesian Textile Association (API) vice chairman Ade Sudrajat told just-style from the capital of Jakarta.
"Indonesia has a large population, Indonesian people work hard and are honest. Also electricity is much more available then in the last three years and toll roads are progressing."
Sudrajat estimates that "between 150,000 and 200,000 jobs could be created if the Chinese companies relocate with an investment of around US$100m.
Although those numbers are vast, they would be in keeping with the scale of the garment industry in Indonesia, which already has one local operator employing 45,000 workers and a Korean firm with more than 65,000 people on its payroll.
There is no specific timetable for the proposed relocation, although the slated visit by the prime minister indicates the level of seriousness with which the Chinese regard the possibility.
No specific locations have yet been earmarked in Indonesia, but Sudrajat noted: "This is good news for jobs."
The API chairman added the Chinese companies had "good relations" with buyers in Europe, the US and Japan and were looking not to expand their operations on mainland China, but to relocate to Indonesia.
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