Apple Commits $1 Billion to Production Facility for Market Booster
Businessicy – Indonesian Minister of Industry, Agus Gumiwang Kartasasmita, has called on Apple to commit $1 billion (Rp 15.9 trillion) to develop a production facility in Indonesia. The move aims to lift restrictions on the sales of Apple’s iPhone 16, which currently faces hurdles in the Indonesian market.
Agus confirmed during the Industrial Fest 2024 opening in Surabaya on December 4, 2024, that Apple has significantly raised its investment offer from $100 million to $1 billion. “In shaa Allah (God willing), Apple will choose the first option, which is to invest in a production facility,” he stated.
Agus revealed ongoing intensive discussions with Minister of Investment and Downstream Industry, Rosan Perkasa Roeslani, to finalize the investment scheme and identify the industrial zone for Apple’s factory. He reassured that the government would fully support the investment process to ensure a smooth transition for Apple’s operations in Indonesia.
This $1 billion commitment underscores Indonesia’s demand for equitable investment practices. Agus highlighted the stark contrast between Apple’s initial $100 million offer and its $140 trillion (Rp) investment in Vietnam, a country with a smaller market of 1.5 million units compared to Indonesia’s 2.5 million units sold in 2023. The government deemed the initial proposal insufficient given Apple’s market presence in Indonesia.
“We will do everything possible to ensure Apple’s investment proceeds smoothly and aligns with the agreed plans. Establishing a production facility will enable Apple to flourish in Indonesia,” Agus affirmed.
Details on the investment scheme and exact location are still under review, but the commitment marks a major step toward strengthening Apple’s market presence in the region while reflecting the Indonesian government’s dedication to fostering fair investment policies.
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The Indonesian government has highlighted the substantial investments made by other tech giants, such as Samsung and Xiaomi, in the country. Samsung has invested Rp8 trillion, while Xiaomi has committed Rp5 trillion, both establishing production facilities that contribute significantly to Indonesia’s economy.
Minister of Industry Agus Gumiwang Kartasasmita emphasized the broader impact of these investments, particularly in generating employment. “We are closely evaluating the contributions to job creation made by producers of smartphones, tablets, and handheld computers,” Agus stated.
He underscored the importance of Apple’s proposed $1 billion investment, noting its critical role in safeguarding the company’s substantial market share in Indonesia. Agus issued a stark warning, explaining that Apple’s market access could be jeopardized if the investment does not materialize due to unresolved licensing issues.
“Without this investment, Apple risks losing the Indonesian market because they will not be able to sell their products here,” Agus firmly concluded, emphasizing the high stakes involved.
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