Mitsui & Co, one of the largest trading companies in Japan, believes that Indonesia is one of the most prospective investment destinations for the middle and longer term. After Brasil and Chile, Indonesia is currently the third-largest investment market for Mitsui & Co, which is part of the Mitsui Group. The latter has stakes in various sectors including energy, food, logistics and finance. The CEO of Mitsui & Co, Masami Iijima, stated that Indonesia is lucrative due to its large and young population as well as its rapidly expanding middle class.
In 1990, Mitsui first entered Indonesia as an independent power producer by establishing Paiton I, an electric steam power plant, followed by Paiton II in 2012 (in East Java). The company also established an ammonia plant (Kaltim Pacifik Ammoniak) that has been in operation since 2000, producing around 660 thousand ton of ammonia per year.
After China and Thailand, Indonesia is the third-largest investment destination for Japanese companies. The total value of investments and the number of projects have increased significantly in recent years. In 2010, Japanese companies invested a total of USD $712.5 million in Indonesia through 321 projects. Three years later (2013), the total value of investments had accelerated to USD $4.7 billion through a total of 950 projects, thus replacing Singapore as the largest foreign investor in Indonesia.
Iijima stated that some issues that should be dealt with by the Indonesian government include bureaucratic reforms, improving the country's infrastructure as well as curtailing corruption. If these issues are improved it will translate into rising investor confidence and more investments.
Japan's Investments in Indonesia:
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Source: Indonesia Investment Coordinating Board