RI cashes in on South Korean president's visit

Andi Haswidi, The Jakarta Post - 2006-12-06 09:29

Jakarta, December 5, 2006 (JP) - A number of trade and investment agreements were signed Monday by Indonesia and South Korea aimed at promoting and strengthening bilateral relations between the two Asian nations.

On the trade promotion front, the Investment Coordinating Board (BKPM) and the Korean Trade-Investment and Promotion Agency (KOTRA) agreed to facilitate what BKPM chairman Muhammad Lutfi said was a growing interest among Korean businesses in investing here.

"I hope that next year, the BKPM, with the support of KOTRA, can come up with various ways of attracting investment," KOTRA director general Min Kyung Sun said.

The memorandum of understanding (MoU) was signed by Lutfi and KOTRA president Ki-Hwa Hong.

The MOU signing was part of the 13th joint meeting of the Indonesia-Korea Economic Cooperation Committee (ECC) in Sultan Hotel in Jakarta, held in tandem with the visit of South Korea President Roh Moo-hyun to Indonesia.

At the same venue, an agreement on the development of small and medium enterprises (SMEs) was signed by PT Permodalan Nasional Madani (PMN) and the South Korea Small Business Corporation (SBC), which will allow greater exchanges of information and experts on SMEs between the two countries.

To date, one expert from the SBC, Kwan Woong Lee, has been stationed in Indonesia to help the PMN strengthen its programs in support of local SMEs.

Another agreement signed was a mid-term financing contract between the Korea Export Insurance Corporation (KEIC) and state-owned steel producer PT Krakatau Steel.

Signed by KEIC director Kim Song Woong and Krakatau director Dainulhay, the contract is for Krakatau Steel to partly supply a steel construction project in Korea that is estimated to be worth US$500 billion.

Joint Korean-Indonesian company, PT Korindo, also announced its plan to expand its pulp, paper and biodiesel businesses next year by acquiring 400,000 hectares of plantation land.

"We need an extra 200,000 hectare for our biodiesel business and another 200,000 hectare for our pulp and paper business," Korindo vice president Lee Byung Ki said.

Since 1998, the company has invested in 34,000 hectares of oil-palm plantations, producing 45,000 tons of crude palm oil per year. "We are also planning to establish cassava farms for the production of raw materials for bioethanol. For that, we will need 40,000 hectares," he said, without mentioning locations.

Korean business group SK Corporation will also invest in Indonesia, Lutfi said.

"This company will build a factory either in Tangerang or Bekasi," he revealed without elaborating, except to say that the project would be worth some $400 million.

According to Trade Ministry figures, total trade between the two countries in 2005 reached $9.95 billion, with Indonesia enjoying a surplus of $4.44 billion, an increase of 46.02 percent compared to the 2004 surplus of $2.98.