[UPDATE on July 16th: In response to the numerous reports citing that Foxconn’s going to invest in Indonesia, the manufacturing company has responded by saying that it has yet to reach any decision regarding it, and that the visitation made by the group chairman Terry Gou from 6th to 10th of July was only to survey the market at the invitation of the Indonesian government].
Taiwanese electronics manufacturing giant Foxconn (LSE:HHPD; HKEX:2038; TPE:2354) has disclosed its intention to open a massive factory in Indonesia that is expected to create up to one million new jobs in the country.
The plan has been confirmed by Indonesia’s Industry Minister M.S. Hidayat after he witnessed the signing of a partnership agreement between the Indonesian Employers Association (Apindo) and the Taiwan-based Chinese National Federation of Industries, in Jakarta on Wednesday. Hidayat said:
They [Foxconn] will enter Indonesia, bringing along technology, and will need about one million workers. The investment is estimated to be worth more than $1 billion.
Sofjan Wanandi, the Apindo chairman, said that Foxconn was in the process of conducting a feasibility study in Indonesia, an effort which could take up to one year to be completed. Foxconn had also requested to build its factory in Indonesia’s most populated and modernized island, Java, preferably in Central or East Java, just outside of the capital, Jakarta. Hidayat later adds:
But I prefer that they build the factory outside Java island. If they do so, I will give them incentives of a tax holiday, tax allowance, and other facilities.
This investment could well cement Indonesia’s reputation as the top investment destination in ASEAN. Though investment is all well and good, but one big question still looms in my mind; can Indonesia’s workforce handle the excessive non-stop working frenzy just like in Foxconn’s mainland China plants? I believe the working culture is quite different between those two countries, and if Foxconn cannot cater to the differences very well, I’m afraid that Indonesia might encounter strikes or protests like we saw in some parts of China and Brazil.