PAN China pours $105m in Indonesia

Tom McGregor

China has enjoyed remarkable growth over the past few decades. Yet the era of double-digit GDP growth rates appears to have ended. So, what will be the next land of golden opportunity? Will it be in Africa, South America or Southeast Asia?

Some economists have set their eyes on Southeast Asia. The countries in the region are young with growing populations, along with low living and labor costs. Construction companies can transform primitive jungle villages into more modernized cities. Many factories are flooding into these countries as well.

In Indonesia, the nation is rich in natural resources such as oil, gas and minerals. PAN China International, mining resources, metallurgy industry, logistics & trading and media conglomerate, will invest $105 million in Indonesia to construct a special economic zone in the regency of Seram in Maluku, Indonesia.

The regent of Seram, Jakobus Puttlethalat, disclosed to ANTARA news agency that the investment has been submitted to the Maluku provincial government. "We have prepared 5,000 hectares of land for the KEK (special economic zone) project after Governor Karel Albert Kalahalu gave his approval," he said.

PAN China will open the zone in a region that is seeking to upgrade its developments in the processing and the exploration of its minerals wealth that include oil and gas.

Indonesia offers abundant reliable energy resources and minerals, however the country struggles with widespread corruption, lack of infrastructure and equipment technologies failing to meet world-class standards.

It's the right moment for the nation to change into a more advanced society by utilizing upgraded technology to extract its natural resources. PAN China's economic zone could bring in numerous large-scale factories, warehouses, plants and refineries to store and transfer huge reserves of oil, gas and minerals. The facilities could serve other functions too.

"The first phase will soon start with heavy equipment already moved to Gunung Tinggi for nickel explorations," Jakobus said. "According to the plan, nickel processing, aluminum, ferro-nickel, coal, steel and stainless steel factories would be built in the KEK."

The KEK can play a crucial role to improve the lives of Indonesian by creating more jobs, bringing in much-needed cash flow into the region, and providing Chinese expertise for the exploration and processing of its natural resources.

Indonesians could gain more knowledge to work in such highly technical fields. They must receive proper training as equipment engineers. PAN China should educate them since migrating thousands of experts from China would be much too costly. The project can only succeed with a good training program for the locals.

Jakobus explained the economic zone could be an economic stimulus for the region. He estimated that it could provide jobs for tens of thousands of his fellow Indonesians. But the jobs being offered require competent workers with high-tech skills. Laborers are expected to know how to operate a complex pipeline system efficiently.

Nonetheless, PAN China believes they made the correct decision to invest over $100 million into the zone.

"The KEK development project is a follow-up of a memorandum of understanding signed between the Maluku provincial administration and the Chinese province Henan when Governor Karel visited China as a member of the entourage of President Susilo Bambang Yudohoyona in March 2012," as reported by Bernama News.

Indonesian officials may have struck gold in reaching a deal with the Chinese conglomerate.

PAN-China's website says it's making "significant achievements, owned many mining rights for nickel ore, coal mines, chrome ore, cobalt ore, manganese ore and iron ore. In the year 2010, the company restructured and transferred its main investments to mining and metallurgy industry, while expanding the former trades. In the near future, PAN China will focus on global mining trades and investments."

The company has engaged in numerous projects and is gearing up for a more "integrated system of mining" in Indonesia. PAN China has pledged a commitment to "environmental protection and public welfare of the locals, improving their living conditions, creating job opportunities and bringing tax inflow," according to its website.

The special economic zone for the regent of Seram in Maluku could establish Indonesia as the next land of opportunity for global investors.

The views do not necessarily reflect those of China Daily.

McGregor@chinadaily.com.cn

Tom McGregor's previous articles:

China's business taste for wine

HSBC gives thumbs up to Zoomlion

Singapore captivates Chinese investors

China's aviation industry ready for lift off