Taiwanese electronics producer Foxconn has abandoned its plan to build a mobile phone factory in Indonesia due to land acquisition problems, says the Indonesian Chamber of Commerce and Industry.
Chamber head Suryo Bambang Sulistyo today said the Taiwanese tech giant asked for free land in exchange for a US$1 billion investment in Indonesia, reports Kontan. The government did not reply to Foxconn’s proposal in time. Suryo said he regrets the government’s indecision.
“We have plenty of land, we should have been able to give them some,” he told the media.
Foxconn will reportedly consider building a factory in Malaysia instead.
See: Ahead of new law on smartphones, a rush towards ‘made in Indonesia’In March, Foxconn’s parent company, Hon Hai Precision, conveyed to the Indonesian government its plan to invest US$1 billion in the country, which included a factory.
Sources say the plan was cancelled because the company considered the price of land in Cakung, East Jakarta, too expensive. According to Suryo, due to the failure to acquire the key piece of land, Foxconn is now looking toward Malaysia as its new investment target in Southeast Asia.
The Foxconn investment saga in Indonesia has gone on for more than two years, with many twists and turns. Foxconn’s original letter of intent was not a full legal commitment to invest; instead, it set out a general agreement between the Taiwanese company and the Jakarta government to cooperate on land allocation, pricing, permit facilitation, and other points.
Nightmarish land acquisition processes remain at the top of the list of bottlenecks for public and private construction projects in Indonesia.
(Source: Kontan)
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