Lured by Indonesia’s remarkable economic growth over recent years, many
Russian companies have been looking into expanding their businesses into the
largest economy in Southeast Asia. Realization, however, remains minimal, a
business envoy says.
Victor I Tarusin, the executive
director of the Russia-ASEAN Business Council, told The Jakarta Post in an
interview on Tuesday that finding business partners, especially with firm
financial commitments, was still a problem for Russian firms looking to invest
in Indonesia.
“We need serious, solid partners
that will co-invest in the project, to be implemented here in Indonesia. Not
only [in terms of providing land assets], but also by making solid financial
commitments,” he said.
Tarusin added that better
administrative support from the government could greatly improve the situation.
He did not elaborate further.
Russia’s major alumina producer,
Russky Aluminiy, announced a plan last month to cooperate with state-owned
diversified mining company PT Aneka Tambang to construct a bauxite refinery in
West Kalimantan with an estimated investment of US$1 billion.
The partnership plan, however,
did not work out, according to Industry Minister MS Hidayat recently. Hidayat
said Russky was looking into partnerships with other local companies.
Russia’s Norilsk Nickel is also
assessing possibilities to build a copper smelter and a non-ferrous metal
smelter in Indonesia, with investment of up to $2 billion. There have been no
updates on its plan so far.
Tarusin said that the problem of
finding a partner was very unfortunate, considering Indonesia and Russia could
complement each other in terms of their economic characteristics.
He held up the example of the oil
and gas industry, in which Russia had plenty of experience.
“So far, there is only one
Russian oil and gas company that has managed to operate in Indonesia — the
Syntes Group,” he said.
The field of aircraft and
satellite manufacturing was another example of undeveloped potential that could
benefit Indonesia-Russia economic ties, he said.
“Russia has a number of
technologies that could be well-transferred here to complement industrial
development in Indonesia,” he said.
Regardless of the failures to
find business partners in the past, interest to invest in Indonesia remained
strong, Tarusin said. He added that several representatives of a number of
Russian firms were currently looking for partners in Jakarta, with the construction
sector becoming the new point of focus.
Also speaking to the Post on
Wednesday, Andrey Karev, the vice president of Russia’s giant construction
company Morton said he had met with several local players to discuss possible
partnerships.
“Indonesia is interesting for
Morton because it’s the biggest country in ASEAN with the largest population,”
he said at the Russian Embassy in Jakarta.
Morton is known in Russia for its
expertise in building towns with supporting infrastructure, including power plants,
roads and hospitals. This year, the firm expects to generate $2 billion in
revenues from a variety of private construction projects.
Linda Yulisman and Novan Iman
Santosa
Business & Investment Opportunities
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