Epson to Relocate Factory to Indonesia

JAKARTA, KOMPAS.com - Indonesia’s industry minister said Thursday that Japanese electronics maker Epson plans to relocate a factory from China to Indonesia this year, according to a report.

“This year Epson will relocate its factory to Jakarta and double its investment,” M.S. Hidayat was quoted as saying by Antara state news agency. “Their reason was that labour costs in China are already expensive. They have made a commitment and I told them that I would facilitate them because this could generate up to 1,500 jobs,” he said.

Hidayat, who gave no further details about Epson’s plans, added that several other Japanese companies such as Toyota, Hitachi and Panasonic aimed to expand their business in Indonesia. Indonesia, Southeast Asia’s largest economy, is trying to attract foreign direct investment to help it achieve growth targets of 5.5 percent this year.

The country posted 4.5 percent growth last year. But investors say they are put off by overlapping regulations, legal uncertainty, creaking infrastructure and widespread corruption.

The annual corruption poll by the Political and Economic Risk Consultancy this month judged Indonesia to be the most corrupt country in a table of regional economies, with a score of 9.27 out of the worst possible 10. Indonesia also came last in 2009 but with a marginally better score of 8.32.