ASIATODAY.ID, JAKARTA – The Ministry of Industry of the Republic of Indonesia has received a proposal for Apple’s investment plan of US$100 million in Indonesia over two years. This amount is a 10-fold increase from Apple’s initial plan, which wanted to invest US$ 10 million to build an accessories and components factory in Bandung, West Java.
The Ministry of Industry then discussed the proposal received on November 19 2024.
“There are several things that are being taken into consideration by the Ministry of Industry in reviewing the contents of the proposal submitted by Apple,” said Ministry of Industry spokesperson Febri Hendri Antoni Arif, Thursday, November 21 2024.
Febri explained that the contents of the proposal submitted by Apple included a two-year investment plan with a value of US$100 million, including the construction of a development center, the construction of an Apple Academy in Bali and Jakarta, as well as the construction of an Airpod Max mesh component factory.
Febri explained that the Ministry of Industry is considering whether Apple’s investment value of US$100 million is fair for Indonesia when compared to the value of Apple’s investment in other countries such as Vietnam and Thailand.
“We are of the opinion that it is unfair to say that it is also unfair to increase investment by 10 times. “We should see whether the value of US$ 100 million is fair or not for Indonesia, compared to other Apple investment destination countries such as India, Vietnam and Thailand,” he stressed.
The Ministry of Industry is also considering whether the nominal investment plan is fair to the investment of manufacturers of mobile phone, computer and other tablet products in Indonesia.
“As we know, Apple is not the only one investing in the domestic market. We are assessing whether this value is fair and in line with the Prabowo-Gibran government’s target of achieving 8% economic growth by absorbing a large number of workers. “The Ministry of Industry’s hopes for this investment are the same,” he explained.
He added that the Minister of Industry, Agus Gumiwang Kartasasmita, wants Apple to start collaborating with domestic industry to integrate it with Apple’s Global Value Chain (GVC). This will also have a positive impact on the manufacturing industrial sector in the country, including absorbing workers in industries that are included in Apple’s GVC.
Febri emphasized that the Ministry of Industry noted that there was still Apple’s investment commitment in the 2020-2023 period proposal amounting to IDR 271 billion which had not been realized. This is why the Ministry of Industry has not issued Domestic Component Level (TKDN) certification and import permits for the iPhone 16 series.
“So we hope that Apple will comply with regulations in Indonesia and continue to realize the remaining investment,” he said.
Previously, Apple chose an innovation development scheme by building the Apple Academy. This iPhone manufacturer has built three Apple Academies, located in BSD Tangerang, Batam and Surabaya.
Minister of Industry Agus Gumiwang Kartasasmita previously said that the iPhone 16 from Apple cannot yet be sold in Indonesia because it is still in the process of processing TKDN, which is one of the conditions for importing these cellphones.
“So there is still a gap of around IDR 240 billion. “If they can realize this, then Apple will get a TKDN value of 40% (and Apple can enter Indonesia),” he added.
Febri emphasized that TKDN will create justice for all investors who invest in Indonesia, and to create added value and deepen the domestic industrial structure. Apart from that, it is also fair with other countries where Apple invests and sells its products. So, what is at issue is not only the number or value of the investment, but is related to justice for all investors in Indonesia as well as Indonesia and other countries. “This will have an impact on creating a conducive business climate for Indonesia,” he said.
Febri noted that sales of Apple cellphones in Indonesia were the largest in Southeast Asia, reaching 2.61 million units last year. In comparison, Apple cellphone sales in Vietnam were only 1.43 million units.
“The value of Apple’s sales revenue in Indonesia is estimated at IDR 30 trillion. “This figure is still far from the planned investment value to support national economic development and the development of a digital technology ecosystem in Indonesia,” he explained.
Therefore, the Ministry of Industry has given three conditions to the iPhone manufacturer, including requiring Apple to establish a research and development (R&D) division in Indonesia. The scale of establishing this R&D division will be much different from the Apple Academy. Apart from that, Apple must start seriously involving Indonesian companies in Apple’s global supply chain (GVC).
The Ministry of Industry also applies the same TKDN rules to Alphabet, Google’s parent, which owns the Google Pixel 9. This device is prohibited from being bought and sold in the domestic market due to minimal company investment. (AT Network)
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