economy

Investment Proposal Of USD 100 Million From Apple, Kemenperin Acts Quickly

The Ministry of Industry has confirmed that it has received a proposal from Apple for an investment plan of USD 100 million, or about IDR 1.58 trillion (at an exchange rate of IDR 15,800), in Indonesia over the next two years. This amount is ten times higher than Apple's initial plan to invest USD 10 million, or IDR 158 billion, to build a factory for accessories and components in Bandung, West Java.

"The Ministry received Apple's proposal dated November 18, 2024, regarding the USD 100 million investment on November 19, 2024. We appreciate Apple's intention in this proposal," said the Ministry's spokesperson, Febri Hendri Antoni Arif, after being asked by reporters in Jakarta on Wednesday (November 20).

Febri emphasized that the Ministry will act quickly and hold a leadership meeting on Thursday morning (November 21) to discuss the proposal. "This shows that the Minister of Industry is responding positively to Apple's investment commitment by holding a meeting tomorrow morning," he stated.

However, the Ministry is still holding Apple accountable for its promise to invest IDR 300 billion to meet the Domestic Component Level (TKDN) regulations. The TKDN requirements are outlined in the Minister of Industry Regulation (Permenperin) Number 29 of 2017 regarding the Provisions and Procedures for Calculating the Domestic Component Value of Mobile Phones, Handheld Computers, and Tablet Computers. According to Permenperin 29/2017, the TKDN calculation can be done using three schemes: manufacturing products domestically or building a factory, developing applications domestically, and/or fostering innovation domestically.

Previously, Apple chose the innovation development scheme by establishing the Apple Academy. The iPhone manufacturer has already set up three Apple Academies located in BSD Tangerang, Batam, and Surabaya. The Minister of Industry, Agus Gumiwang Kartasasmita, stated that the iPhone 16 from Apple cannot be sold in Indonesia yet because it is still undergoing the TKDN process, which is a requirement for importing mobile phones. "There is still a gap of about Rp240 billion. If they can address this, Apple will achieve a TKDN value of 40% (and can enter Indonesia)," he added.

Febri emphasized that TKDN will ensure fairness for all investors in Indonesia and help create added value while strengthening the domestic industry. It also promotes fairness with other countries where Apple invests and sells its products. Therefore, the issue is not just about the investment amount but also about fairness for all investors in Indonesia and between Indonesia and other nations. This will positively impact the business climate in Indonesia, he said.

Febri noted that Apple’s phone sales in Indonesia were the highest in Southeast Asia, reaching 2.61 million units last year. In comparison, Apple sold only 1.43 million units in Vietnam. "The estimated revenue from Apple’s sales in Indonesia is around Rp30 trillion. This figure is still far from the planned investment needed to support national economic growth and the development of the digital technology ecosystem in Indonesia," he explained.

As a result, the Ministry of Industry has set three conditions for Apple, including the requirement to establish a research and development (R&D) division in Indonesia. This R&D division will be significantly different from the Apple Academy. Additionally, Apple must seriously involve Indonesian companies in its global supply chain.

The Ministry of Industry is applying the same TKDN rules to Alphabet, Google's parent company, which has the Google Pixel 9. This device is also banned from being sold in the domestic market due to the company's minimal investment.

Tag: Agus Gumiwang Kartasasmita Apple Kemenperin TKDN