[Asia Economy Reporter Suyeon Woo] KOTRA held a webinar on Indonesia market entry strategies utilizing the Korea-Indonesia Comprehensive Economic Partnership Agreement (CEPA) on the 24th.
This webinar was held to review the key contents of the Korea-Indonesia CEPA, which is only awaiting ratification procedures by both countries after its formal signing last December, and to discuss utilization strategies for Korean companies by previewing the Indonesian market trends.
Yang Ki-wook, FTA Policy Officer at the Ministry of Trade, Industry and Energy, said in his opening remarks, "Through the Korea-Indonesia CEPA, Indonesia's level of market openness has increased compared to the Korea-ASEAN FTA, and new service markets of interest to our companies, such as cultural content and distribution including online games, have been newly opened," adding, "The CEPA will strengthen the value chain of our companies in the New Southern region and provide new growth opportunities."
Steel, Petrochemicals, Auto Parts, and Textile Products Export Promising
Among the export promising items under the Korea-Indonesia CEPA that attract high interest from domestic companies are steel, petrochemicals, auto parts, and textile products. Jeong Se-ho, Head of KOTRA Jakarta Trade Center, evaluated, "These items rely heavily on imports as local production capacity in Indonesia cannot keep up with demand," and forecasted, "Once the existing tariffs applied under the Korea-ASEAN FTA are eliminated, the cost competitiveness of Korean products will further improve, boosting exports."
He emphasized, "Especially, due to government-led infrastructure development projects such as the capital relocation project, steel demand is expected to grow at an average annual rate of 8%," and urged, "Since many construction projects by Korean companies are also underway, the Korea-Indonesia CEPA should be actively utilized to expand local supply chains."
Expanding Win-Win Cooperation Opportunities Between the Two Countries in Electric Vehicles, Batteries, and Renewable Energy Industries
Meanwhile, Sri Endang Novitasari, Director of the Investment Coordination Board of Indonesia, expressed expectations, saying, "The economic cooperation chapter within the CEPA will serve as a platform to expand win-win cooperation between the two countries." She emphasized, "There are many investment opportunities in the electric vehicle, battery, and renewable energy sectors, where the Indonesian government provides various tax benefits and incentives to foster industries," and requested, "We ask Korean companies to take special interest."
She added, "Indonesia has the largest nickel reserves in the world (about 24%), a key material for electric vehicle batteries," and noted, "Since Indonesia has an environment optimized for electric vehicle and battery production, it seeks cooperation with technologically advanced Korean companies."
Son Su-deuk, Head of KOTRA's Economic and Trade Cooperation Division, said, "Through the Korea-Indonesia CEPA, market openness in Indonesia has expanded, and a foundation for win-win cooperation between the two countries has been established based on complementary industrial structures," adding, "To capitalize on new business opportunities, the Korea-Indonesia CEPA must be strategically utilized."
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