September 06, 2023 12:56
Most of Korea's biggest tycoons are heading to Indonesia with President Yoon Suk-yeol to attend the ASEAN Summit.
With a population of 277 million, Indonesia is the world's fourth most-populous country after India, China and the U.S. and holds the world's largest reserves of nickel and second-largest reserves of cobalt.
As a result, the Southeast Asian country is growing increasingly important for its strategic resources that conglomerate chiefs like Hyundai chairman Chung Eui-sun, LG chairman Koo Kwang-mo and Lotte chairman Shin Dong-bin want a part of.
The Indonesian government's plan to relocate the capital to the greenfield site of Nusantara on Borneo also offers huge infrastructure construction opportunities.
"The government and businesses are on another economic diplomacy tour as a single team to gain a foothold in the Indonesian market," one business insider said.
Hyundai completed its first Southeast Asian factory near Jakarta last year. The plant is capable of manufacturing 150,000 cars a year, rising to 250,000 eventually. The automaker also built a joint-venture battery plant with LG to turn Indonesia into the Southeast Asian hub for electric vehicles.
LG has had a home appliance factory in Indonesia since 1990. Now it operates four plants in Indonesia run by subsidiaries LG Innotek, LG CNS, LG Chem and LG Energy Solution. LG Energy Solution has completed the joint-venture plant with Hyundai and production will start in April of next year.
Lotte is strengthening investments in Southeast Asia after pulling its retail and chemical businesses out of China. Lotte Chemical invested W5 trillion in a petrochemical plant in Indonesia that is still under construction (US$1=W1,331). Lotte Mart has been running 50 stores in Indonesia since 2008 and built a shopping mall in Jakarta in 2013.
The Korean tycoons will attend a roundtable meeting with Indonesian business representatives on Thursday. Although the chairmen of Samsung and SK groups are not going to Jakarta, other senior executives will be there.
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