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Chairman Chung Eui-sun of Hyundai Motor Group, Chairman Koo Kwang-mo of LG Corporation, Chairman Shin Dong-bin of Lotte Corporation, Chairman Koo Ja-eun of LS Corporation, Chairman Choi Yun-beom of Korea Zinc, and President Park Sang-gyu of SK Enmove are among the more than 20 CEOs and representatives of various companies visiting Indonesia on the 7th. They are doing so to explore business opportunities in line with President Yoon Suk-yeol’s visit to Indonesia. With a population of 277 million, Indonesia ranks as the world’s fourth most populous country, following India, China, and the United States. The country has a relatively young population, with an average age of 29.9. Additionally, Indonesia is a major global producer of nickel, ranking first, and cobalt, ranking second. With the accelerating shift away from China in global supply chains, Indonesia’s importance has increased further. Notably, Jakarta is planning to relocate its capital to Nusantara, which is expected to open up significant opportunities in the infrastructure market. A business insider stated, “The government and businesses are working together under the notion of ‘One Team Korea’ to seize the Indonesian market and once again engage in economic diplomacy.”
◇Three of Top Five Conglomerates Visit Indonesia
Among the heads of the top five conglomerates, three are heading to Indonesia. Chairman Chung Eui-sun, who holds a prominent position, has a strong connection with Indonesia. Chairman Chung has been dedicated to Indonesia since his tenure as Vice Chairman, aiming to break into the Southeast Asian market, which was once a challenging area for Korean automakers. Since becoming chairman in October 2020, he has visited Indonesia three times, each time meeting with President Joko Widodo. President Widodo, who sought to diversify the market that had been dominated by Japanese cars, even had one-on-one meetings with Chairman Chung when visiting Korea. One notable outcome of this is the Hyundai Motor factory near Jakarta, Southeast Asia’s first Hyundai factory. It currently has a production capacity of 150,000 units and is planned to expand to 250,000 units in the future. Additionally, a battery factory, established through a joint venture with LG, was recently completed, aiming to make Indonesia a hub for electric vehicles in Southeast Asia.
From home appliances to batteries, LG Chairman Koo Kwang-mo is overseeing various businesses himself. LG Electronics established its first joint factory in Indonesia in 1990, manufacturing TVs, refrigerators, washing machines, and air conditioners. Currently, LG Innotek, LG CNS, LG Chem, and LG Energy Solution all have production facilities in Indonesia, totaling four factories. LG Energy Solution, in partnership with Hyundai Motor Group, recently completed a battery factory and is set to begin full-scale production next year. An industry insider stated, “With the global focus on attracting electric vehicle and battery factories, from our perspective, South Korea and Indonesia have a mutually beneficial relationship because we need to establish a supply network outside China.”
Lotte Chairman Shin Dong-bin is also joining this visit to Indonesia. Lotte is strengthening investments in Southeast Asia as an alternative to China, where it has successively withdrawn from distribution and chemical businesses. Lotte Chemical is currently conducting the “Line Project,” in which it plans to invest a total of ￦5 trillion in Indonesia to build a comprehensive petrochemical complex by 2025 (US$1=￦1336). When the factory is completed, it is expected to supply 50 percent of Indonesia’s demand for petrochemical products. In particular, the plant was granted a 20-year corporate tax exemption through Shin’s repeated meetings with President Joko Widodo. Lotte Mart has been operating 50 retail stores in Indonesia since 2008, and in 2013, it opened Lotte shopping complexes in Jakarta. A Lotte official said, “Unlike China, we are showing steady growth in Indonesia.”
◇Over 20 CEOs and Representatives, Collaborating with Indonesian Companies
Over 20 CEOs and representatives are scheduled to participate in a South Korea-Indonesia business roundtable on the 7th. On this day, it is known that they will also sign MOUs with major companies.
LS Group has recently turned its attention to Indonesia after successfully completing a power infrastructure project in Vietnam. In 2018, LS Cable & System completed a power cable factory in collaboration with a local AG group. Chairman Gu Ja-eun recently stated his determination to develop the company into a comprehensive cable company that manufactures not only low-pressure cables but also medium and high-pressure cables. LS Mtron, a subsidiary manufacturing company, imports a significant amount of copper ore from Indonesia, second only to Chile.
Chairman Choi Yoon-beom of Korea Zinc is attempting to make his first entry into Indonesia. Pursuing a nickel refining business with its battery materials business as a growth engine, the company aims to secure a stable supply of nickel ore, which is essential for their operations. Indonesia restricts the export of nickel ore for resource security reasons, prompting Korea Zinc to consider processing locally-mined nickel ore into intermediate forms for import to Korea. Samsung and SK Group will not have their Chairmen present this time, but they are sending their CEOs to strengthen cooperation with Indonesia.
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