Industries

We can safely say that South Korea is right behind China in terms of scale of investment in the development of nickel-to-EV ecosystem in Indonesia. Started out by assembling plant of Hyundai and EV battery joint venture between Hyundai and LG Energy Solution, we have seen growing investments from South Korean companies in nickel processing.

In Southeast Asia, consumer enthusiasm for electric vehicles is rising, attracting established Chinese giants such BYD and SAIC, as well as startups like Neta, as quoted on chinadaily.com. Chinese carmakers, in addition, have chosen to partner with local companies as they explore opportunities in overseas markets.

Nickel firm Merdeka Battery Materials (MBMA), subsidiary of gold producer Merdeka Copper Gold (MDKA), is collaborating with a subsidiary of the Chinese company GEM Co Ltd (GEM) in building an HPAL smelter with a capacity of 30,000 tons of nickel in the form of Mixed Hydroxide Precipitate (MHP) per year. MHP is precursor for the production of electric vehicle (EV) battery. 

East Kalimantan is the second largest exporter in the country, mainly because of its natural gas, thermal coal, and palm oil. In the past few years, however, some have developed nickel smelters in the energy-rich province. Relatively quiet in the national media, PT Kalimantan Ferro Industry (KFI) has just inaugurated the first phase of its nickel smelter in Sanga-Sanga, Kutai Kartanegara, East Kalimantan province with estimated investment of Rp30 trillion.

Early last month, Infineon Technologies AG, market leader for power semiconductors, announced expansion of its facilities in Kulim, Malaysia with the construction of the world’s largest 200-milimeter SiC (silicon carbide) Power Fab to anticipate the growing trend of decarbonization worldwide.

Many countries are looking at Batam, Riau Islands province as an investment destination due to its strategic geographical location. Batam Free Zone Authority (BP Batam) recorded that 83.6% of foreign investment in the Riau Islands in the H1 of 2023 entered Batam with US$348.09 million or Rp5.15 trillion of the province’s total investment of US$416.4 million.

Global efforts to combat climate change, combined with geopolitical tension leading to high price of conventional fuels, has led to annual double digit growth of photovoltaic (PV) installations in the past few years. Few weeks ago, Vantage Market Research estimated the global solar PV glass market alone to have US$37.6 billion value by 2030, surged from US$6.5 billion last year.

Indonesia recorded trade surplus of US$187 million in August for non oil and gas trade with China. If combined with oil and gas, the surplus should be substantially bigger because China is among main export destination of Indonesian LNG from Tangguh, West Papua province.

Indonesian heavy equipment market has long been dominated by America’s Caterpillar and Japan’s Komatsu and Kobelco. Growing investments and involvement of China, however, has led to faster growth of Chinese brands, particularly Sany.