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Korea-Indonesia Industry & Tech Cooperation. Dynamic Partner, Dramatic Prosperity. CONTENTS o Introduction o Trade o Investment o Current Focus Toward New o Industrial Tech Tie-Ups by Sector - Manufacturing - Energy & Resource Development - SOC - Others

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slide1

Korea-Indonesia

Industry & Tech

Cooperation

Dynamic Partner, Dramatic Prosperity

slide2

CONTENTS

o Introduction

o Trade

o Investment

o Current Focus Toward New

o Industrial Tech Tie-Ups by Sector

- Manufacturing

- Energy & Resource Development

- SOC

- Others

o Social Contribution

o Conclusion

slide3

Introduction

□ Showcasing Robust Growth in Economic Exchanges

Two-Way Trade

Two-Way Investment

Visit or Exchange

US$29.6 Bil.

US$1.1 Tril.

100 Firms

3.9-Fold

66.6-Fold

5-Fold

US$7.7 Bil.

US$16.1 Bil.

20

2005 2012

2001 2012

2001 2012

□ Maximizing the Benefits of Complementarity

  • Indonesia..
  • After China, the 2nd fastest
  • growing economy in G20
  • -Growing purchasing power with rapid
  • increase of middle-class-income
  • population

Korea..

Expertise in transforming from

absolute poverty into world\'s 8th

largest trading nation

slide4

Introduction

□ Tremendous Synergy in Industrial Competitiveness

o Beyond bilateral, emerging new horizon partner, evolving G20, ASEAN+3, APEC, etc.

  • Korea..
  • High-quality pool of human resources
  • embracing policymakers, business
  • executives, engineers, researchers,
  • skilled workers, etc.
  • Powerhouse industries, having
  • a number of major global names such as
  • Samsung, Hyundai, LG, SK, etc.
  • Global positions: Automobile No. 5,
  • Shipbuilding No. 1, Displays: No. 1,
  • DRAM (Semiconductors) No. 1, etc.
  • Indonesia..
  • Endowed with abundant natural resources
  • such as crude oil, coal, steel,
  • forests etc.
  • Emerging Asian production hub with
  • quick adaption to technology
  • competence; globally-recognized
  • aerospace competitiveness, etc.
slide5

Trade

□ Tremendous Synergy in Industrial Competitiveness

o Bilateral Trade Volume Exceeded US$38 Billion in 2012

- Partners aim to increase total trade to US$50 billion by 2015 & US$100 billion by 2020

- Korea is fourth largest trading partner for Indonesia, surpassing the U.S., India, Australia and others

Key Facts & Statistics

Two-Way Trade Trend

Indonesia\'s Top Export Destinations in 2012

(Unit: US$ Mil.)

Korean Exports to Indonesia

Korean Imports From Indonesia

Trade Volume

Source : Indonesia Investment Coordinating Board

Source : KOTRA

slide6

Key Facts & Statistics

□ Showcasing Golden Complementarity in Economic Structure

o Indonesia.. Major source of energy & raw material resources for Korea

o Korea.. Reliable supplier of intermediary industrial goods to Indonesia

Top 10 Trade Items Between Korea & Indonesia

Source : KOTRA

slide7

Investment

o Korea: Indonesia’s Third Largest Investor (2012)

- US$1.94 billion, ahead of the U.S., China, others

- Number of Korean companies having advanced into Indonesia has reached about 1,300

Key Facts & Statistics

Two-Way Investment Trends in Indonesia

(Unit: US$ Million)

Amount

Cases

Source: KOTRA Data

Source: Indonesia Investment Coordinating Board

slide8

Key Facts & Statistics

Korean Investment Trends in Indonesia by Sector

Primary Industries

(Unit: US$1,000)

Secondary Industries

(Unit: US$1,000)

Tertiary Industries

(Unit: US$1,000)

Total

100%

Total

100%

Agriculture 1,232

Construction2,225

Livestock 649

Processed Food 50,616

Nonferrous Metals13,000

Trade/Repair13,427

Forestry 0

Textiles164,577

Metals, Machinery

& Electronics 626,843

Hotels & Restaurants750

Fisheries 0

Leather Goods &

Footwear88,316

Medical & Precision

Optical Machinery 0

Mining 6,500

Transport, Warehousing &

Communication32,328

Timber7,384

Automobiles & Transportation

Equipment5,920

Sub-Total 14,381

Paper & Printing1,610

Real Estate & Industrial

Complexes500

Other Manufacturing

Industries20,381

Chemicals & Pharmaceuticals117,023

Electricity, Gas,

& Piped Water 0

Other Services609

Sub-Total1,154,507

Rubber & Plastics58,837

Sub-Total49,839

Source : KOTRA

slide9

Moving Toward New Horizon

Promotion Status of Korea-Indonesia Economic Cooperation

slide10

Moving Toward New Horizon

  • Korea\'s Participation in MP3EI as Major Partner
  • ● Master Plan for Acceleration and Expansion of Indonesian Economic Development (MP3EI)
  • Indonesia\'s medium- and long-term plan (2011-2025) to become world’s 9th largest economy
  • ● Minister-Level Indonesia-Korea and Korea-Indonesia Joint Economic Cooperation Committee
  • Established in February 2012
  • ● Ten Subcommittees Actively Advancing Joint Economic Cooperation
  • - Trade & Investment - Industries - Energy-Resources - Environment
  • - Construction/Infrastructure - Agriculture/Fisheries - Defense Industries
  • - Policy Development & Finance - Eco-Friendly Cars - Culture & Creativity
  • ● Joint Secretariat Established in Jakarta on February 28, 2012
  • Korean officials dispatched from the Ministry of Trade, Industry & Energy,
  • Ministry of Strategy & Finance, Ministry of Environment, etc
slide11

Moving Toward New Horizon

  • Comprehensive Economic Partnership Agreement
  • ● CEPA Expected to Blossom into 1-Trillion-Rupiah Trade Era by 2020
  • - Indonesia-Korea Summit Agreement to conclude CEPA by end 2013
  • Goal: Enhance strategic partnership to expand the scope and depth in trade and other areas
  • ● Lower Tariffs on Korean Automobiles, Petrochemical Products, Ships, Steel and
  • Other Goods
  • ● New Investment and Greater Technological Cooperation for Indonesia from Korea

Estimated Effects of CEPA (Joint Study Group)

  • ● Indonesia
  • - 0.03% increase in GDP
  • - US$800 million increase in welfare
  • Taking into consideration potential productivity increase in major
  • industries: 4.37% increase in GDP and US$1.6 billion
  • increase in welfare
  • ● Korea
  • - 0.13% increase in GDP
  • - US$1.5 billion increase in welfare
slide12

Moving Toward New Horizon

Bilateral Currency Swap Arrangement

  • ●Practical Drive to Bolster & Accelerate Indonesia-Korea Economic Cooperation
  • ●Date/Venue: October 12, 2013, on the Sidelines of the IMF/World Bank General Assembly
  • ●Attendees: Finance Ministers and Governors of Central Banks of the Two Countries
  • ●Scale: Up to 115 Trillion IDR/10.7 Trillion KRW (equivalent to US$10 billion)
  • ●Period of facility: 3 Years
  • ●Expected Outcomes
  • - Boost trade and increase economic & financial cooperation
  • Strengthen regional financial safety net complementing
  • the Chiang Mai Initiative Multilateralization (CMIM)
slide13

Landscape of Cooperation by sector

Manufacturing

Textiles

■ Active Korean Textile Companies in Indonesia Reached About 400 in 2012

●Cumulative Investment: US$5 Billion

●Employment: 450,000

●Exports: US$7 Billion

●Indonesian Skilled Manpower Combined with Korean Expertise

Maximizes Mutual Benefits

Eco-Friendly Cars

■ MOU for Cooperation in Eco-Friendly Cars Signed

at Indonesia-Korea Summit November 9, 2012

● Prized cooperation and partnership in eco-friendly automotive

sector expected to spread cooperation in entire

automotive sector

- Indonesian auto market scale exceeded 1 million vehicles in 2012

- Korean share of market stands at just 1.2%, dwarfed by Japan’s 90%

slide14

Landscape of Cooperation by sector

  • Steel
  • ■ POSCO Integrated Steelworks in Indonesia
  • ● Joint venture with PT Krakatau Steel
  • ● 3-million-ton annual capacity
  • ● Construction began in October 2010 with completion
  • targeted for December 2013
  • ● Plant confirms POSCO’s position as major global steel maker and sets stepping stone
  • for the joint venture’s advance into Southeast Asian market with high growth potential
  • Aerospace & Defense
  • ■ Partners in Peace-Keeping and Disaster-Relief Operations
  • ●Defense Industry Cooperation
  • Indonesia acquired 17 KT-1 single-turboprop basic trainers
  • worth US$91 million from KAI (Korea Aerospace Industries)
  • ● Indonesia awarded DSME (Daewoo Shipbuilding & Marine Engineering Co., Ltd.)
  • a US$1.1 billion contract to build three 1,400-ton U-209 diesel-electric submarines
  • ● Indonesia, Korea signed letter of intent in 2009 concerning joint
  • development of KFX/IFX jet fighter program
  • ● Korea purchased four Indonesian CN 235 patrol planes for 120 billion won in 2008
slide15

Landscape of Cooperation by sector

  • Petrochemicals
  • ● Collaboration of Korea’s Expertise & Indonesia’s Resource-Based
  • Industry Advancement Drive
  • - Indonesia’s petrochemical imports: US$8 billion in 2012
  • ●Lotte Chemical Launched US$5 Billion Investment Program
  • - Targeting new petrochemical complex in Banten Province
  • Currently awaiting assurances over additional land availability
  • ICT
  • ●Indonesia-Korea -- Emerging Potential as Frontier for ICT-Based Global Technology
  • - Indonesia -- Facebook’s fourth largest market & Twitter\'s third largest market
  • Korea is recognized worldwide as IT powerhouse, realizing US$81
  • billion in IT exports in first half of 2013
  • ● PT Samsung Electronics Cited as Success Story by BKPM
  • - Market leadership in TVs, smartphones, other segments
  • ● Indonesia-Korea MOUs for e-Government Partnership
  • - Realizing forward-looking vision for more innovative & transparent government
slide16

Machine Tools

  • ● Machine Tools, called Mother of Machines, to Fuel Indonesia’s
  • Drive to Advance its Manufacturing Sector
  • Facilitate automotive industry transition from assembly production
  • stage to processing stage
  • ● Korea Looking to Advance into Indonesia as the Emerging Manufacturing
  • Hub of Southeast Asia
  • Korea stands out as world’s 4th largest machine tool producer
  • at US$5.7 billion in 2012
  • ● Bilateral Exchange Visits in Pursuit of Win - Win Cooperation Programs
  • - Designing roadmap for development of Indonesia’s machine tool industry
  • - Procuring Korean machine tools to support education & training programs
  • Shipbuilding & Offshore
  • ● Korea: Home to World\'s Top 6 Shipyards
  • ● Indonesia Targets Construction of Larger Vessels by 2015
  • Up to 75,000dwt, with oil tankers as a priority as well as
  • CNG & LNG carriers
  • - Critical task is to enhance capacity & capabilities at 200 shipyards
  • ● Joint Government-Private Sector Efforts Underway Based on Win - Win Approach
  • ● Marine Equipment Sector Evolving Under Indonesia-Korea Shipbuilding & Offshore Cooperation

Landscape of Cooperation by sector

slide17

Landscape of Cooperation by sector

Energy & Resource Development

■ Representative Case of Combining Bilateral Complementarity

●Indonesia is Korea’s 7th Largest Mineral Product Import Source

Korean Imports of Mineral & Mining Goods in 2012

Indonesia

US$11.5 Billion (5.5%)

Korea\'s On-Going Overseas Resource Projects

Indonesia

61 Cases, 12%

Total

US$208.7

Billion

(100%)

Total

508 Cases

(100%)

● Time-Honored Government Level Energy-Resource Cooperation Committee

- The first country with which korea established a bilateral committee in 1979

- Converted into Bilateral Energy Forum with the dynamic participation of the private sectors.

slide18

Landscape of Cooperation by sector

Major Korean Players in Indonesian Energy World

  • ● KIDECO
  • Established by Samtan of Korea
  • in 1982, focused only on resource development
  • Now, third largest bituminous coal
  • mine in Indonesia
  • Production volume reached over 200 million.
  • tons in 2010, supplying bituminous coal
  • to over 40 customers in 12 countries including
  • China, Japan & Hong-kong

●KOMIPO

- Cirebon Thermal Power Plant

- TanjungJati Thermal Power Plant

(600MW x 2 Units)

ㆍSupplying 9% of Java Island’s electric power

- Wampu Hydropower

ㆍIndonesian - Gov’t-guaranteed

hydropower project

  • ● KOGAS
  • Starting with the first import of LNG from
  • Indonesia in 1986, KOGAS has become
  • the world\'s biggest buyer of LNG
  • Importing about 5 million tons of LNG
  • annually from Indonesia
  • CBM (Coal Bed Methane) Development
  • Tech Cooperation MOU signed with
  • SUGICO of Indonesia
  • ●KGS
  • MOU with MIGAS, Indonesia on
  • Gas Safety Management
  • ㆍGas safety technology standards,
  • consulting on gas refueling stations, etc.
  • Expanding tie-ups into service field besides
  • investment in oil & gas facilities
slide19

Landscape of Cooperation by sector

Construction & Infrastructure

● Indonesia Focused on Quality Infrastructure to Support Dynamic & Sustainable Growth

- Roads, Rail, Air, Maritime, Power Plants, etc.

●Indonesia’s 2011-2025 Development Plan Comprises Investment Reaching US$440 Billion

●Korea Ideally Positioned to Support Indonesian Infrastructure Development

- As a main partner for Indonesia’s MP3EI

- Accumulated experience & expertise in rags-to-riches legend based on SOC development

A

●Rallying Behind Indonesian President SusiloBambangYudhoyono’s Initiatives

- Strengthen Asia-Pacific connectivity through infrastructure development & promotion of

infrastructure investment

Indonesia-Korea Co-Authored JejuInitiative

● Identified 8 Large-Scale Cooperation Projects

● Combined Value of US$50 Billion

● Established Joint Commission & Working Groups

slide20

Landscape of Cooperation by sector

Highlights of Jeju Initiative

slide21

Landscape of Cooperation by sector

  • Agro-Forestry, Distribution, & Creative Industries
  • Agro-Forestry
  • ● Bilateral MOU on Reforestation & Eco-Tourism
  • - Expanding scope of forest industry cooperation from plantations, forest biomass
  • - Natural recreation forests and healing forests
  • Culture
  • ●Bilateral MOU in Creative, Culture Industries
  • - Fueled by growing popularity of Korean pop music and films
  • Bolstering cooperation in movies, music, games, animation & digital content
  • development
  • Distribution
  • ●Greater Distribution Sector Opportunities in Snowballing Indonesian Consumer Markets
  • - Lotte Mart’s success story, operating 34 stores in Indonesia
  • Environment
  • ● Environmental Market Expanding in Line with Industrialization
  • - Indonesia-Korea Environmental Cooperation Center Opens in Jakarta
slide22

Social Contribution

KOMIPO

● Establishment & Support of Three Elementary Schools in Remote Areas

of Indonesia

● Establishment & Donation of Small Hydro-Electric Power Plants

in Remote Area of Indonesia

KIDECO

● Improving Local Infrastructure (Roads, Drinking Water, etc.)

● Health Care for Local Residents, Support for Various Leisure & Sports Activities, etc.

KORINDO

● Scholarship Fund for Human Resource Development and Science & Technology Advancement

● Various Education & Welfare Support Programs Under the Motto

“The World Along With Our Families & Neighbors”

slide23

Social Contribution

Lotte Mart

● Facility Improvement Support for Two Elementary Schools Every Quarter

● Establishment of CSR Fraternity at Every Store to Provide Services for Regional Community

Miwon

● Conducting “Help Regional Community” Drive with Variety of CSR Programs Including Blood Donation, River Restoration Projects, etc.

KOTRA

● Opened Korea Win - Win Innotech Plaza in Jakarta in June 2013 to Combine the Excellence of Korean

Enterprises’ CSR Activities and Indonesia’s “One Village, One Product” Program

slide24

Conclusion

Thank You!

Korea-Indonesia Jointly Developing a New Blue Ocean for mutual Prosperity & Beyond

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