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Friday, 28 June 2019 10:47

Indonesia - Japan Synergize to Build Manufacturing Sector Capacity

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MOU between Indonesia and Japan MOU between Indonesia and Japan kemenperin

The Indonesian and Japanese governments agreed to continue to enhance comprehensive cooperation in developing efforts in the manufacturing industry sector. This strategic step is considered to be able to accelerate the economic growth of the two countries.

This bilateral collaboration was poured through the signing of a framework document between the Indonesian Minister of Industry Airlangga Hartarto and Japan's Ministry of Economy, Trade, and Investment (METI), Hiroshige Seko in Osaka, Japan, Thursday (6/27) local time. This synergy is an implementation of the New Manufacturing Industry Development Center (New MIDEC) project under the cooperation framework of the Indonesia-Japan Economic Partnership Agreement (IJEPA)

"With the cooperation of New MIDEC, it can compensate for the trade deficit between Indonesia and Japan in the form of basic capacity building for the manufacturing sector. For example, the capacity for welding techniques or other skills related to the automotive industry, "said the Minister of Industry.

New MIDEC activities include six sectors, namely the automotive, electronic, textile, food, beverage and chemical and metal industries. In addition there are also seven cross sectors, namely metal working, mold & dies (tooling), welding, SME development, export and investment promotion, green industry (energy, waste, emission), and industry 4.0 (digitalization, automation, policy reforms) .

The implementation of the New MIDEC program that can be implemented immediately after the signing is in the automotive sector by involving two cross sectors, including mold & dies (tooling) and SME development. Meanwhile, activities in other sectors will be carried out after both parties have prepared a Technical Arrangement and input from relevant stakeholders.

Through this collaboration, Airlangga is optimistic that there will be an increase in investment by Japanese investors embedded in Indonesia. For example, when the Minister of Industry met with the President of Toyota Motor Corp. Akio Toyoda in the One on One Meeting session, Toyota will develop electric-based vehicles especially hybrids in Indonesia. The plan, Toyota is ready to pour funds amounting to Rp28.3 trillion over the next four years.

"The next Toyota investment plan is related to new government policies, which are driving the development of electric vehicles. Well, that will be listed in two PPs. First, regarding the acceleration of electric-based vehicles, and the second is activities related to PPnBM for electric-based industries, which include hybrids. The PPnBM will become zero if it is based on electricity and the emission is the lowest, "he said.

The Minister of Industry said, the Ministry of Industry together with one of the Japanese automotive manufacturers, had conducted a study of the development and use of electric vehicles. This activity also involved six universities in Indonesia.

"From the results of the study, hybrids are seen as an alternative because of the well to wheel, where the ecosystem generation of energy is also seen, starting from primary energy to the automotive drivers," he explained. The Ministry of Industry itself has encouraged the development of domestic electric vehicle technology, including the making of fuel cells.

The Minister of Industry added, in attending the State-Group Summit 20 (G-20) in Osaka, it met with a number of CEOs from well-known companies in Japan. They hope that the investment climate in Indonesia will improve, which includes the guarantee of the availability of raw materials and the support of adequate infrastructure such as electricity and ports to become a force to improve the competitiveness of an industry.

"In a forum business consisting of various industries, the average large Japanese company has operated for more than 30 years in Indonesia. The sectors range from energy, electricity, pulp and paper, chemical, automotive and banking, "he said.

The Minister of Industry affirmed, the Indonesian Government will soon issue a new policy package to support the business world, by providing fiscal incentive facilities in the form of tax holidays, tax allowances, and super deduction tax for vocational and innovation.

"Besides that there are also discussed related to the banking industry. One of the topics of discussion is the existence of data centers and digital financial inclusive, which uses artificial intelligence technology. Then it was also discussed for the project prototype for smart cities, "he added.

On that occasion, Minister of Seko conveyed, one of the important automotive policies going forward was the development of battery or electric-based vehicles. So far, Japan has implemented a parallel policy for electric (EV) and hybrid bases. (kemenperin) 

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