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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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Korea indonesia industry tech cooperation


Industry & Tech


Dynamic Partner, Dramatic Prosperity

Korea indonesia industry tech cooperation


o Introduction

o Trade

o Investment

o Current Focus Toward New

o Industrial Tech Tie-Ups by Sector

- Manufacturing

- Energy & Resource Development


- Others

o Social Contribution

o Conclusion

Korea indonesia industry tech cooperation


□ 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




US$7.7 Bil.

US$16.1 Bil.


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


Expertise in transforming from

absolute poverty into world's 8th

largest trading nation

Korea indonesia industry tech cooperation


□ 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.

Korea indonesia industry tech cooperation


□ 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

Korea indonesia industry tech cooperation

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

Korea indonesia industry tech cooperation


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)



Source: KOTRA Data

Source: Indonesia Investment Coordinating Board

Korea indonesia industry tech cooperation

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)





Agriculture 1,232


Livestock 649

Processed Food 50,616

Nonferrous Metals13,000


Forestry 0


Metals, Machinery

& Electronics 626,843

Hotels & Restaurants750

Fisheries 0

Leather Goods &


Medical & Precision

Optical Machinery 0

Mining 6,500

Transport, Warehousing &



Automobiles & Transportation


Sub-Total 14,381

Paper & Printing1,610

Real Estate & Industrial


Other Manufacturing


Chemicals & Pharmaceuticals117,023

Electricity, Gas,

& Piped Water 0

Other Services609


Rubber & Plastics58,837


Source : KOTRA

Korea indonesia industry tech cooperation

Moving Toward New Horizon

Promotion Status of Korea-Indonesia Economic Cooperation

Korea indonesia industry tech cooperation

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

Korea indonesia industry tech cooperation

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

Korea indonesia industry tech cooperation

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)

Korea indonesia industry tech cooperation

Landscape of Cooperation by sector



■ 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%

Korea indonesia industry tech cooperation

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

Korea indonesia industry tech cooperation

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

Korea indonesia industry tech cooperation

  • 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

Korea indonesia industry tech cooperation

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


US$11.5 Billion (5.5%)

Korea's On-Going Overseas Resource Projects


61 Cases, 12%






508 Cases


● 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.

Korea indonesia industry tech cooperation

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


- 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

Korea indonesia industry tech cooperation

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


●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

Korea indonesia industry tech cooperation

Landscape of Cooperation by sector

Highlights of Jeju Initiative

Korea indonesia industry tech cooperation

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

Korea indonesia industry tech cooperation

Social Contribution


● Establishment & Support of Three Elementary Schools in Remote Areas

of Indonesia

● Establishment & Donation of Small Hydro-Electric Power Plants

in Remote Area of Indonesia


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

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


● 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”

Korea indonesia industry tech cooperation

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


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


● 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

Korea indonesia industry tech cooperation


Thank You!

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

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