Taiwanese electronics manufacturing giant Hon Hai Precision Industry, known widely as Foxconn, has disclosed its intention to build a factory in Indonesia that is expected to create up to 1 million new jobs here.
Indonesia’s Industry Minister M.S. Hidayat told journalists of the plan after witnessing 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.
“They [Foxconn] will enter Indonesia, bringing along technology, and will need some 1 million workers. The investment is estimated to be worth more than $1 billion,” Hidayat said.
Hidayat said Foxconn, a manufacturer of electronics hardware components, had requested to build the factory on Java, preferably in Central or East Java.
“But I would prefer that they build the factory outside Java island,” the minister said. “If they do so, I will give them incentives of tax holiday, tax allowance and other facilities.”
Apindo chairman Sofjan Wanandi said that in preparation for its entrance to Indonesia, Foxconn was in the process of conducting a feasibility study, an effort that might take a year to complete.
“They will enter in a very large size, so they need a place that can actually meet their needs,” Sofjan said.
He added that he hoped the government would respond to those needs by providing a large enough space in an industrial zone with good infrastructure and easy access to a seaport and/or airport.
“Apindo’s role will be to facilitate their need to find a good Indonesian company as a partner and to settle the infrastructure and space issues,” Sofjan said.
Separately, Indonesian Trade Minister Gita Wirjawan said Foxconn was interested in Indonesia because of its huge market potential, and that the company had yet to decide whether the planned Indonesian factory would supply the Indonesian market only or would export products as well.
Foxconn reportedly produces electronics components for Apple, Acer, Cisco, Dell, Hewlett-Packard, Intel and Microsoft, among others.
In China, its operations came under scrutiny after a rash of worker suicides in 2010 and subsequent revelations of poor working conditions at the company’s manufacturing hub in Shenzhen.