A survey conducted by the Japan Bank for International Cooperation (JBIC) revealed that 56% of the companies prefer investing in Thailand, Singapore, Malaysia, Indonesia, and in the Philippines than in China. This shows a positive sentiment to the four sectors of the Indonesia Stock Exchange (IDX).
The four sectors included are construction, consumer, retail, and manufacturing. These sectors are the sectors that absorb labor. According to Japanese companies, Indonesia is among the countries that have a competitive labor costs compared to China.
The Indonesian government signaled the entry of Japanese investors to the infrastructure sector in the development of the port and rail Trans-Java. In the construction of infrastructure projects, they have created joint ventures with local construction companies such as PT Wijaya Karya Tbk (WIKA), PT Adhi Karya Tbk (ADHI), PT PP Tbk (PTPP), and PT Total Bangun Persada Tbk (TOTL). In the consumer sector, there have already been several companies that embraced Japanese companies, including PT Ultrajaya Milk Industry & Trading Company Tbk (ULTJ) that is forming a joint venture with tea producer, Ito En Asia Pacific Holdings Ltd and PT Indofood CBP Tbk (ICBP), which in turn formed a joint venture with Asahi Groups Holdings Southeast Asia. In the retail sector, PT Sumber Alfaria Trijaya Tbk (AMRT) works with Mitsubishi to sell bread at the supermarket network.
Bank of Japan’s data showed that Japan’s investment to ASEAN countries have jumped three-fold by the end of 2015 amounting to 20.1 trillion yen compared to the value of its investments back in 2010. Based on the data provided by the Investment Coordinating Board (BKPM), Foreign Direct Investments (FDI) from Japan to Indonesia rose up from $ 2.7 billion investment back in 2014 to US$ 2.88 billion by the end of 2015.
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