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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

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

o Social Contribution

o Conclusion


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


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.


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


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


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


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


Moving Toward New Horizon

Promotion Status of Korea-Indonesia Economic 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


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


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)


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%


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


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


  • 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


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.


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


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


Landscape of Cooperation by sector

Highlights of Jeju Initiative


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


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”


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


Conclusion

Thank You!

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


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